Ace Vending in Tempe, Ariz., an 18-route operation servicing 3,000 machines from five operating facilities, offers a case study of a company that has become a market leader and continues to grow at a healthy clip. As the only big independent in its market, Ace Vending offers more services than the numerous small competitors, while also providing a more personal touch than the local national service provider.
One key to the company’s success has been its pioneering use of technology, including cashless readers, DEX handhelds, pre-kitting, automated warehouse management and micro markets.
Ace Vending, to be sure, is not a typical company. Partners Wade Stooks, Kevin Van Hazel and Chuck Walton Jr., friends from junior high school, are all college educated and highly motivated Gen Xers who grew up cognizant of the way technology has changed business in general. When they launched Ace Vending in 1998, they came with no preconceptions about how the vending business should be run, and they organized their deliveries in a way that made it easy to incorporate DEX handhelds and eventually gain DEX-based efficiencies.
Beginning with Coca-Cola
After graduating from college, Stooks and Van Hazel landed jobs at the Phoenix, Ariz. Coke bottler, Stooks in sales and Van Hazel in finance. Walton became a Phoenix firefighter, a job he has continued to hold.
While working at Coke, Stooks and Van Hazel quickly learned that there was no established independent vending operator serving greater Phoenix. Believing they would be able to develop a vending business quickly using bottler-loaned machines, they, along with Walton, struck out on their own in 1998. Stooks and Van Hazel had saved enough money to cover their living expenses for six months.
Armed with a used delivery truck and working out of a garage, they began knocking on doors in Casa Grande, which is about one hour equidistant from Phoenix to the north and Tucson to the South.
And while they didn’t have vending experience, they knew the importance of having a professional appearance. They invested in uniforms and literature, and approached prospective accounts as if they were already an established company.
“We acted like a big company from the get go,” Van Hazel said. “We looked like a professional vending company.”
Stooks already had a successful track record in sales at Coke, and getting accounts did not prove too difficult. Many vending accounts were dissatisfied with the service they were getting from the existing providers.
Arizona: a unique vending market
Arizona has always been a unique vending market since there are not a lot of large industrial accounts that typically form the customer base of large vending operations. The market has long been dominated by small operators, many of which are retirees.
Once Stooks, Van Hazel and Walton got an account, they bought the equipment, installed it and began providing service.
Beverage machines were a “no brainer” since the bottlers provide them for free. But snack machines were a different story. Focusing on cost, they first tried used snack machines, which proved a mistake. “It was a nightmare,” Van Hazel said, in reference to servicing used equipment. “We were nave. We jumped in without looking.”
They immediately began buying new equipment from the local Automatic Products, ltd. distributor. The new equipment cost more money but saved many service calls.
After six months, sales were sufficient enough to justify a 1,500 square-foot warehouse for the young and growing company.
After one year, with 50 accounts, they hired a full-time driver.
Only one account, an auto parts dealer, wanted cold food and hot beverages. After installing and servicing the cold food and hot beverage machines, the partners decided it was not the business they wanted to be in. However, larger accounts still wanted food and hot beverages, so they looked for alternative ways to meet this demand.