In addition, the operator said, some accounts are playing management companies against each other, to the detriment of the vending operator. “The management company has to inform the buyer about the constant price increases we’re getting from our suppliers,” he said. He said some management companies give him the freedom to seek his own pricing from clients.
UNREASONABLE REQUESTS DRIVE OPERATORS AWAY
This operator was outspoken about the fact that in general, management companies allow for commissions that are unreasonable. Some commissions are in excess of 30 percent of net sales. “This is millions of dollars in business,” he said. “There are vendors walking away from it.”
He said Best Vendors did not steer its business in his area to Canteen affiliates, and he noted that it would not make sense for them to do this. He said management companies need to have more than one company in a market to work with since all providers eventually encounter problems with customers.
Other operators interviewed shared the same view, including some who are not affiliated with Canteen in any way.
Nevertheless, many independents are concerned. “Unless something happens, the small operator can’t make it,” said another operator who did not want his name used.
BEST VENDORS INC.: WE’RE PAVING NEW GROUND
Tony McDonald, president and CEO of Best Vendors Inc., the nation’s largest vending management company, believes that his company is playing an important role in working with operator partners and customers to introduce new technology to vending.
McDonald noted that his company has formed relationships with numerous providers of remote data monitoring and cashless transaction systems, and is working to introduce these new benefits to the market place.
“It’s progressing,” he said. He further noted that because the introduction of this technology in a lot of accounts is a new endeavor, they have not determined the best formula for allocating cost among the different parties: Best Vendors, the customer and the vending operator. He noted that Best Vendors has made a substantial investment already.
“We’ve taken a very balanced and friendly approach to the introduction of the technology,” he said. “The introduction and implementation of technology needs to be done correctly. We, as an industry, are not there yet. The cost of the technology in the vending industry needs to be allocated and it needs to be balanced. It’s an exciting area, but it’s a real challenge.”
McDonald is the first to recognize that the bar has been raised on the vending industry in general. This is one reason that his company has pared its operator partners, although this is a process that began nearly 20 years ago.