I've heard from many other vendors that they are buying their product from places like Walmart or Costco. One vendor said that he can get soda from Walmart for 6 cents less than he gets it from a national bottler. Therefore, it made sense to him to keep buying from Walmart and not a national bottler. While that does make sense, it's likely an example of stepping over a dollar to pick up a penny. This article will show you that it makes sense long term to buy from a major bottler.
Free Leased Equipment
Buying your own machine can be costly. A new soda vending machine costs around $5,000. On top of this, you need to purchase a bill validator and coin mechanism and pay for sales tax and delivery. A national bottler, on the other hand, will deliver new and refurbished machines, often times for free, to your place of business.
People are more likely to buy from a newer machine than they are from an older machine. Why? People have more faith that a newer machine will give them their product and not eat their money. So, not only do you save money by not having to buy a machine, your sales will increase because your customers will have more faith in your machines.
Lets say you buy a new soda machine for $5,000 including shipping, tax, coin mech, and bill validator. For fun, let’s calculate how many years that machine would have to be in service to make up the difference between buying your soda from a national bottler and buying it slightly cheaper from a store. For example, what if you are able to get the variety of beverages you need delivered to your place of business for .06 cents a unit less than you are getting from the bottler? So the math would be $5,000 (the cost of your new machine without a bottler) / .06 cents (the difference in cost) = 83,333 vends.
If your machine is generating 400 vends a month, 83,333 vends / 400 vends = 208 months to break even. Assuming you got a 17% interest free loan on this machine, you consistently paid .06 cents less on every bottle you bought, and your machine never broke down, it would take over 17 years to break even on your machine.
Free Repair
Those bottlers will also come out and fix your machines when they break. This saves you time from having to try to fix it yourself and often money because you don’t need to pay someone else to fix it, or pay for the parts. A new compressor for a Royal 660 is about $1000.00. Nothing hurts profit like a compressor going out.
As Your Volume Goes Up, You Get Better Deals
Most bottlers will offer you deals and incentives when you buy curtain amounts of product. Robert at Custom Touch Vending will often buy more product than he needs to take advantage of those incentives. This doesn’t make sense when buying short shelf life products like Diet Coke. But for products like water or Coke that have a long shelf life it makes perfect sense. You can get your product for considerably cheaper during one of those incentive periods. Some bottlers have tiers in price. So the more you order the more you pay.
Delivery Right to Your Door
Your product gets delivered directly to your place of business. This saves you time and gas.
As always, do what's right for your business, but make sure you make your decision with all the facts.
