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Product Selection & ‘Turn’ Key to Vending Machine Profits

Product selection for your vending machines can mean the difference between success and failure. Ultimately, your gross sales depend on a customer deciding to purchase a snack, soda or food item. Proper product selection can increase your sales by 20% or more, and improper selection can reduce sales to nothing. So how do you determine what products to put into your machines?

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All vending machine product selection starts with an account analysis. After you place vending machines in a new account, you could fill them with what you have on the truck, the product you got at the local warehouse club on special last week. You got a good deal on the product and your new customers will eat and drink it because they don’t have a choice. This attitude is the beginning of failure in the vending machine route business. Your customers do have choices when it comes to using your vending machines. Customers can:

· Bring snacks and drinks from home
· Go off-site to a convenience store, or
· Decide not to use your vending machines at all.

Several factors determine the type of product to place in your vending machines.

1. Analysis begins with a basic demographic profile of the account. Who are your customers: Are they male, female, young, old, white, black, Hispanic, Asian? Are they blue collar, white collar or both? What kinds of cars are in the parking lot? Are your customers southern, northern, locals, transplants? Find out as much as you can about your customer base – at each location. Different people have different tastes; some products will sell well to one group, while that same product can be given away for free to another and will not be eaten. Blue collar, young Hispanic men have radically different vending machine purchasing habits than white collar, older Caucasian women.

A quick note on product selection and profitability: The vending business depends on product turn, which is the amount of time it takes to sell your inventory. Faster is better.

But here’s a rule of thumb that seems counter-intuitive: Low cost in vending product selection is not always the prudent and profitable choice. For example, you offer 2 brands of honey buns in a machine. Brand A is 5 cents cheaper than Brand B. You have studied your competitors’ machines in the area and learn that most use Brand B.

Here’s why: Brand A costs 30 cents and Brand B costs 35 cents. When put in the vending machines, Brand A sells 3 units in a week at 75 cents, for total sales of $2.25. Subtracting your cost of from sales, $2.25 (sales) – $.90 (cost) = $1.35 profit.

Brand B sells 12 units per week at 75 cents for total sales of $9.00. Subtract your cost: $9.00 (sales) – $4.20 (cost) = $4.80 profit.

Multiply this times the number of columns in your vending machines to see the difference in gross sales. Let’s say you have 50 machines, so the math looks like this:

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