This is a response to a question from a visitor to the site about increasing profit in their snack machines:
I have a question about menu mix and product selection. Is there a guideline number for sales per spiral? How do you make a determination about discontinuing a slow moving product. Is there a percentage of sales, etc? Finally how do you track inventory, category, individual items, other?
This is actually two separate but related subjects. This article is about increasing profits in vending machines. The article about good product selection in a snack machine can be found here.
Your company's overall cost of goods(including expired and damaged product), sales tax, and commissions should not exceed 55% of overall sales. Most vendors try to get to 50%.
Every time you service a machine, it should have sales over $100. The exception would be a slow machine at an account that has other profit potential for you. This other profit could be more machines at the location, office coffee service or equipment rentals. Another reason would be if that location is one of a multi-location client and the rest of the locations are profitable enough to offset the loss at the slow one.
When assessing the profitability of an account, always consider the time it takes to service the account and what sort of toll it puts on your company. Take into account driving times, traffic, parking, security issues, the times the account is accessible and how that effects the drivers schedule, and accessibility of the machines.
The types of coils and items in the machine greatly effect the potential sales dollars. An empty looking machine is not always a sign of high dollar sales.
To state the obvious, a 15 count coil of $2 beef jerky can potentially make $30 versus $6 for a sold out 6 count spiral of soup cups. Not so obvious is that one can place two 18 count candy spirals at $1.25/vend in the same space as one soup spiral and earn $45. If we take this example to the extreme a "4 wide" six shelf snack machine of all soup coils at $1/vend could sell out completely and still only earn $144. If the same machine was filled with $1.25 "candy" size items in 18 count coils it would generate $1,080. That is a significant difference! If only 25% of the "candy" size product sold it would still earn $270 versus $144 for a sold out machine of 6 count coils.
You can increase selection and profitability in a machine by having more "candy" spirals-two shelves seems optimal. Those candy spirals can be filled with nuts, breakfast bars, sundries, fiber bars, energy bars, and of course candy and chocolate.
Do not be fooled by how empty a shelf of chips looks and think that you are making money. At $1/ vend it can only do about $44 in a 4 wide snack machine. A "candy" shelf that only sells half of its product will do $70, still have plenty of product and offers twice the selection.
As for ways to track information:
We run five routes and have tried a number of ways to track this information. The appropriate system depends on the size of your company. Chris Tomasso has written a review of Vend-Trak and posted it here on Vending How. I suggest you read the review and try the free trial to see how it works for you.
