Boston Vendor Finds Telemetry Improves Service

New technology promises to make vending more professional. But who will drive this change? With the high investment required and the market more competitive, will it be up to the large operators to take the lead in introducing cashless transactions, remote machine monitoring and Web-based reporting?

Will new business models evolve, whereby technology suppliers partner with machine manufacturers and/or operators in introducing these new customer conveniences?

Will small operators, with their lower overhead and ability to have the owner more closely involved in customer service, recognize the benefits of technology and take the lead in bringing it to market?

Only time will tell.

In the meantime, these new customer conveniences and operating system efficiencies are being introduced to locations by progressive operators. Operators with open minds are introducing cashless transactions, remote machine monitoring and other service enhancing technologies and are using them competitively in their local markets.

Case in point is P & J's Vending, a 6-route operation in suburban Boston, Mass. that has been using state-of-the-art technology for several years. The 16-year-old company has posted double-digit growth every year, and has used remote machine monitoring to improve customer service and improve profitability.

In many ways, founder/owner Jim Kelly typifies the independent vending operator. He believes that customer service is the foundation of a successful vending business.

Foundation: customer service
"Service is the key," he said. For Kelly, who still fills in for drivers when they get sick, technology is a tool that enables route drivers to service locations more efficiently and provide customers with the products they want.

Kelly, the son of a postal worker, proves that vending still offers a viable opportunity to an ambitious entrepreneur. Perhaps because he entered the vending business with a strong background in accounting, he was faster than most startup operators to embrace vending management software.

Kelly knew from an early age that he wanted to own his own business, but he didn't discover vending as a career until several years after he graduated from Bentley College in Waltham, Mass. with an accounting degree. He worked in accounting for different companies before starting his own accounting business.

Kelly's accounting business mainly served property management companies. In the late 1980s, Kelly became concerned when the real estate market began to suffer due to recession. He explored supplemental income opportunities and decided to try vending. He began with one small soda machine.

Early on, vending gave flexibility
Vending didn't provide fast income, but Kelly realized it offered flexibility. He could keep his regular job and solicit vending accounts as his schedule permitted. "It was a lot of hard work, but the return was there," he said.

For three years, Kelly solicited small locations in suburban Boston. He never used locators to find customers. He purchased snack machines from New England Coin Op Distributing Inc. in Norwood, Mass. and leased beverage machines from bottlers. He operated out of his house and used his personal vehicle for deliveries.

Kelly initially targeted accounts with a minimum of 50 people. Exceptions were made for isolated locations that didn't have a lot of food and refreshment choices.

He recognized the importance of working with suppliers early on. He bought most of his product from Kendall Confections in Belmont, Mass.

He appreciated the fact that this company would deliver product to him on short notice even though he didn't buy huge orders.

First big account: a hospital
One of his bottler suppliers won a hospital account and asked him to provide snack machines, a hot beverage machine and a cold food machine. This was a turning point for Kelly's vending business.

Wanting to make a good impression on the hospital, Kelly purchased new machines from Crane National Vendors, using company financing. "We wanted to get off on the right foot," he said.