A few years ago my grandson and I were watching an exhibition baseball game at Jet Blue Park also known as Fenway South in Fort Myers, FL. The Boston Red Sox and the Minnesota Twins were doing battle with a number of promising minor league players all hoping to make it to the big leagues.
My grandson looked at me and said, “Papa, when do the teams know if these ball players are ready to play in the majors?”
I told him that there was no pat answer, but some of the things the managers and coaches look for are, can they hit a curve ball, can they hit with power, what kind of offensive and defensive skills do they have and numerous other qualities it takes to make it to the big leagues.
Over the last 24 years of my vending career I have been asked that same question by numerous small and medium-sized vending business owners all over the country as to when are they ready to pursue big league locations. My standard answer is, “Are you sure you are ready to jump in the water with the sharks?” There are numerous things to give careful consideration to before you make that decision. Here are some questions you need to very carefully answer before you take the plunge. Please remember that if you are not ready, you can drown very quickly when going in deep water.
Do you have the financial wherewithal to do battle against the big leaguers who have hundreds of new or like new vending machines to install in very large locations? If you have a bunch of old, used machines in your inventory and you inform the very large location that your equipment is a conglomeration of several brands and models, your chances are diminished greatly.
If you plan on using bottler machines for cold drinks, remember the big leaguers are using the same bottlers. Since they already have a proven track record with the bottlers, in most cases you may not be getting the latest beverage vending machines the bottlers have in their inventory, big leaguers will.
Other financial considerations to be aware of could include perks to offer the location that can make or break your chances of landing big league locations. Vending companies I have worked with have offered to upgrade the breakroom or cafeterias by painting the walls, covering the cost of new tables and chairs, brand new condiment stands, flat screen televisions mounted on the wall, etc.
Location dollar amount
I have been asked what annual sales dollar amount do I believe constitutes a big league location. While there is no right nor wrong answer to that question, my experience reveals that a location that has yearly sales of at least $100,000 is a good number at which to start.
You must be able to offer other services including either vend coffee or office coffee service as part of your overall services package. There are many types of hot beverage brewers including bean grinders, fresh brew, single-cup brewers that offer premium flavored hot beverages including café lattes, cappuccinos, espressos, hot tea, soup, etc. Big league locations usually like to deal with one vendor when possible rather than one for vending, one for coffee and one for water coolers.
Cold and frozen
Cold food and frozen food offerings are a must when pursuing big league locations. Ice cream is something those locations are being offered by your competition. I know of a major blue collar manufacturing location that was being serviced by a vending industry multi-national corporation that provided the location with free ice cream once per month between 2 and 4 pm. Can you and are you willing to compete with offerings like that?
Do you currently have a vending management software system that will help you keep very accurate records of everything happening in your vending business? There are several excellent software programs exclusively designed for the vending industry. An important benefit that you will need to be able to share with big league locations is the fact that you are high tech in your day-to-day operations. There is an old management truism “you cannot manage what you cannot measure.”
Proper service staff
It is not uncommon for big league locations to need six, eight, ten or more vending machines to service the location. Do you have service technicians that can be ready to spring into action when your machines need service and repair? Having an inventory of parts that may be needed to keep your machines operating is crucial. Keep this in mind, a big league location may have 200, 300, 500 or more employees all going on break or lunch very close together. If multiple machines are out of service, you are not only losing sales but can also be in jeopardy of losing the location. Big league locations generate huge amounts of revenue but they also can have multiple service problems. You must be prepared to address the service issues quickly.
Prepare a plan B
We have all heard the old saying “do not put all of your eggs in one basket.” In my opinion, if you have a big league location that accounts for more than 20 percent of your total sales, you can be skating very close to the edge of a potential big league problem. Many vending operators have faced major league problems when they suddenly lose a big league location that is responsible for such a large portion of their gross sales. It can and does happen on a regular basis.
I recently had a conversation with Jack Brown (a business associate and personal friend of mine) who is the CEO of Refresh Facility Services located in Chesterton, IN, a full service company that offers vending, micro markets, office coffee service and water coolers. Brown was a Automatic Merchandiser magazine “Pro To Know” in 2015. He and his company were also featured on the front cover of the magazine in the February/March 2017 edition.
Brown shared with me that when he suddenly lost his largest vending location last year, it was a shock to his company. He did not lose the big league location for service issues. Instead, the location was purchased by a very large company that has a national vending contract.
Regardless of the reason, the loss meant Brown and his management team had to begin implementing a plan to regain the lost sales revenue from that big league location. They devised a strategy of increasing sales from the remaining locations by doing various promotions including putting certain products on sale, having free tastings, using point-of-sale visuals, etc.
While it took a tremendous amount of hard work and planning, they were able to overcome the curve ball that had been thrown at them when they lost a big league location. Are you ready to face a problem like that head on if you lose a big league location?
Right fit employees
Key employees are a serious consideration to look at when servicing a big league location. If you manage to land a big league location you would not want to have a brand new person calling on the location to refill, stock and merchandise your vending machines. Always remember that when hundreds and hundreds of customers are stepping up to the plate to purchase some of your products, you want your best employee taking care of them.
I hope that after reading this column you are not discouraged about your plans to grow your vending business by going after big league locations. It is an effort to make you aware of some things you may not have considered in your enthusiasm to go after big league locations.
While adding big league locations to your customer list can be rewarding financially, remember that you will be going up against big league competition and you can count on the fact that they will come at you and your big league locations every chance they get.
Good luck when you step up to the plate going after big league locations and I hope you hit a grand slam.