When a customer asks about getting a commission, Cornelius responds that he has different arrangements for his locations. He explains that the most common arrangement is great service in exchange for low prices and no commission. The second most common is lower prices with the customer paying a subsidy. The third is providing free product to the employees with the customer being billed monthly. There are a few customers Cornelius pays a commission to, which are the largest locations
Faced with these choices, most customers opt for great service, low prices and no commission.
“When you ask the question the right way, you almost always get the answer you want,” Cornelius said.
“I’ve been a professional salesman for many years,” he noted.
AN EARLY USER OF MANAGEMENT SOFTWARE
Cornelius knew the importance of good management software from his previous career. His son-in-law, a software engineer, designed an online program for tracking meter readings, collections, sales taxes and exceptions.
He doesn’t utilize DEX reporting on his machines, but he analyzes product sales on a per location basis.
Even though he no longer needs to run a route himself, Cornelius runs a route one day a week to maintain his communication with his customers.
He has attended one National Automatic Merchandising Association (NAMA) expo and hopes to attend more. He found the NAMA education seminars very helpful, as well as the chance to learn from other operators.
Some of the things he learned at NAMA include how to set up a machine, how to schedule accounts for service, some tips on sales, and what types of things competitors are likely to say when they approach another operator’s account.
EXPANSION INTO “PREMIUM OCS”
The company has expanded into what it calls “premium” OCS, offering mostly Fair Trade and organic coffee, and compostable cups and utensils. Cornelius noted there is a strong demand for such products in the San Francisco Bay area.
He has found Green Mountain Coffee Roasters offers an excellent value to quality conscious customers. “People are happier with premium coffee,’ Cornelius said. “Green Mountain is an excellent coffee.”
He has also found success with specialty retail brands such as Starbucks and Peet’s Coffee & Tea, which are prevalent in the San Francisco Bay area.
He tries to discourage customers from having hot beverage vending machines and cold food machines. He services only a handful of water soluble hot drink machines, two refrigerated food machines and two frozen food machines.
Cornelius has also developed a strong relationship with his product wholesaler, Vend Mart Inc., a San Leandro, Calif.-based company that has a cash and carry warehouse in San Jose.
He has paid close attention to his financial operating ratios. He has been able to achieve a high route sales average, based on NAMA figures.
He only purchases used equipment to minimize his debt.
To simplify parts management, Cornelius sticks to one vending equipment line — Automatic Products.
He also carries one cold beverage line: Coca-Cola. Coca-Cola’s product portfolio is large enough to meet all customer requests, and having one beverage line simplifies his operation, he said.
GOOD CUSTOMER SERVICE RULES
Cornelius credits his success to providing 24-hour response to service calls, being willing to accommodate special product requests, and the fact that he will provide glassfront beverage machines to accounts that most vending operators don’t think are large enough to warrant them.
“We have not lost an account due to service,” Mike Johnson boasted.
“It’s a good business,” Cornelius said.
He has also gotten into consulting for other vending operators. “I get a big thrill showing things they can do and seeing another vendor become more successful,” Cornelius said, remembering the help he received from other operators when he first got into the business.