The company has also been able to take advantage of the timely cash sales data provided on the USAT Website in addition to cashless data. More timely than DEX handheld data, the USAT data has improved pre-kitting. “Our kits automatically became a lot more accurate,” Van Hazel said. “With credit card readers, you’re getting a feed every night of what’s happening.”
Van Hazel estimates machines are 45 percent empty when serviced and the trucks return with only a few cases of product on them.
The company’s routes generate $650,000 per year on average, which is more than double the industry average, based on National Automatic Merchandising Association data.
Once all machines are reporting data to the Website, the company will be able to expand from pre-kitting to dynamic scheduling. Van Hazel thinks he’ll be able to ensure the driver pulls at least $100 (or any amount of his choosing) every time they go to the machine.
“The inclination (among operators in general) is to over service to prevent a service call,” Van Hazel said. While this is a consideration, managing labor costs is a major concern in a labor intensive industry like vending.
When the company expanded into micro markets this past year, inventory management became even more important due to the higher number of stock keeping units in the warehouse.
After installing four micro markets, the company invested in LightSpeed, a pick-to-light warehouse management system that accelerates the pre-kitting process by issuing light signals to direct the activities of pre-kit personnel. It has been especially beneficial for the company’s micro market routes.
“That one purchase is the best (one) we ever made,” Van Hazel said of LightSpeed. He claims he recouped the investment in less than a year.
At the present time, the micro markets are serviced by some of the vending routes. Van Hazel wants to have a dedicated micro market route.
Micro markets fuel growth
Van Hazel learned about micro markets at a Unified Services Group buying group meeting a year and a half ago. No one in Arizona was offering micro markets at the time to the best of his knowledge. Jim Brinton, president of Avanti Markets, gave a presentation on his system. Van Hazel went to Seattle, Wash. to visit Avanti Markets and learn more about them.
Brinton provided a list of products for Van Hazel to carry in the micro market. One type of product he was not used to carrying was fresh sandwiches. Van Hazel was able to work out an arrangement with a commercial commissary.
Van Hazel placed his first micro market in an established vending location, replacing the vending bank with the micro market, on a test basis. The micro market doubled the sales in a short period of time, and the sales have remained at the same level ever since.
Once he had one micro market set up, Van Hazel had a location he could take other customers to see. In the past year and a half, he has installed 50 micro markets. “This is where it (the business in general) is at, in my opinion,” he said. He seeks locations with 150 to 200 employees minimum for a micro market.
Encouraging value card payment
When introducing a new micro market to an account, Ace Vending provides “value cards” to each employee with $2 preloaded. The “value card” contains a personal bar code by which the customer establishes a personal account with Avanti Markets which they can access over the Internet. The employee is also awarded extra value for loading $20 on the value card, either with cash or a credit or debit card. “They save some money by keeping value on the card,” Van Hazel said.
To date, half the micro market purchases are made with the value card and the rest with debit or credit cards. Avanti Market does not accept cash payments.
The purchase history for every location is analyzed by Avanti Markets. Operators can access reports on top selling items to offer.
One top selling item for Ace Vending has been cheese sticks. Van Hazel said he never sold this product in vending. The fresh food has also been an excellent seller.
The micro market also works well for employee wellness programs, Van Hazel said, since it allows more variety than vending.