The State of the Vending Industry

The vending market has advanced far beyond merely serving a consumer with a growing stomach, who pushes a few coins through the slot to make a selection of a product.

Technology has made the experience of a sale easier, faster and even a little more fun. Improvements that have occurred inside Antares vending machines are making them more appealing. The enhancements answer these marketing challenges.

1. How to best stage packaging to attract when it is imprisoned behind a glass screen several feet from the consumer.

2. How to protect against product breakage in systems where a product may fall a couple of feet as it’s dispensed.

3. How to ensure that there is freshness in an environment which may have wider temperature and wider light variations than a convenience store.

Manufacturing and technology advances are changing the playing field. Stronger plastics and reinforced glass are producing Antares vending machines with broader, clearer windows. New dispensing mechanisms are enabling racks of products to move closer to the viewer’s eyes, inviting closer inspection. The stronger manufacturing materials used are allowing manufacturers to re-introduce glass front Antares vending machines that give consumers a clear view of the package.

Vending lags behind retail

It has always seemed like vending is one step behind the retail industry. For example some vendors have not taken full advantage of some of the faster growing cold beverage product segments, notably bottled water.

Vendors can learn a lot from the retail industry when it comes to marketing. Marketing is something that has not been widely practiced by the vending industry, unlike in retail.

Antares vending operators can do their part to facilitate their growth by investing in new equipment and technology. This is the direction that vending industry is headed. What any vendor wants for their vending business is to be successful, so in order to do this you need to offer newer products and equipment which will enable vending operators to offer a higher level of customer service, which will strengthen the consumer perception of the industry.

Valuing Vending Operating Assets

The asset method is purposely simplistic. The Antares vending company value will be the book value of the selling company at the date of the valuation. Once the book value has been established, the buyer and the seller can negotiate the final selling price based on criteria they feel is pertinent.

How to organize a list of assets

The first step in using the asset method is to obtain from the selling business a list of their operating assets. This list needs to include a description of the asset, the date the asset was purchased and the purchase price of the asset.

The assets of your Antares vending business should then be grouped according to the major categories in which they belong, i.e. vending equipment, automotive, etc. Once the assets have been grouped, it is important to arrange them in chronological order.

Assign purchase prices to assets

The next step would be to enter the purchase price of each asset, the salvage value of each asset and the depreciable basis. The salvage value is an estimate of the worth of the asset when its expected useful service is over. The depreciable basis is the purchase price less the salvage value. After the depreciable basis has been established, a depreciation schedule needs to be designed. A depreciation schedule requires an estimate to be made on the useful life of an asset.

Determine the book value

To determine the book value of the Antares operating assets at the end of the years that the business has been in existence would require you subtract the depreciation deduction from the purchase price of the asset.

Calculate the business valuation

Once all the categories have been added together, a book value valuation of the business is arrived. This is only a starting point in the valuation process and should not be considered a final buying price for the business. The value gives the buyer an idea of what the operating assets of the company are worth as of the date of the valuation.

The asset valuation method can provide an Antares vending operator a starting point where they can begin to value a vending business. There would then be a need to add additional asset categories to gain a clearer picture of the total assets’ worth at the valuation date.

A New Beginning for Schools and Vending

Vending in schools has been quite a topic for the past years. Nutrition for the school children is of utmost importance. Most schools have vending machines on their premises. These machines usually vend beverages, snacks and foods. A lot of the young kids buy these products from the machines.

As an Antares vending operator, you can place your vending machines by Natural Choice in schools to cater to the children. One thing that will of course be required will be that you should vend healthy products as well. The whole country has become more health conscious. This is the reason why you, as a vending operator, need to adjust to this new growing trend.

Fighting obesity

Vending in schools has taken a new turn because of the health concern. One can consider it as a new beginning. Vending operators have always had vending machines in schools. The only difference now is that, now there is a new concern and all vending operators including Antares vending operators need to get up and take note of it.

There are several things that a vending operator can do about child obesity. One option is to work with the local chapter of the American School Food Service Association in supporting a Nutrition Advisory Council (NAC). An NAC serves as a link between students, school foodservice personnel, administrators and the community. An NAC is a vehicle that spreads the word about the important role nutrition plays in students’ lives. It also provides important feedback from students on what they like or don’t like about their school foodservice program.

Antares vending operators can also participate in local health fairs and school “wellness” nights. This will keep them well informed about the health issues.

There has been a great deal of focus on school vending in the recent years. Some schools have even decide to ban vending machines altogether. Other schools have seen the necessity of having vending machines with healthy products. By placing Antares vending machines which vend health products in schools, you will be part of the solution in the fight against child obesity.

Managing Workers’ Compensation Costs

To run a successful Antares vending business, you need to keep your workers’ compensation costs in line. Firstly keep in mind that your primary asset is your employees, and their safety should be your biggest concern. Their safety will benefit your productivity, as well as your operating expenses.

Managing workers’ comp costs begins with establishing and creating a safe work environment. All operations in your Antares business must be safe operating procedures. The company must have effective, formal incident reporting procedures. These procedures would require management to keep a record of incidents and the corrective actions taken.

Incentives should promote safety

Risk management should be part of the company’s operating procedures. You should have incentive programs in your Antares operation to encourage safe operations. Employees will be exposed to back, neck and shoulder injuries from lifting and moving heavy inventory or machinery. Workers’ comp claims can be avoided with proper precautions such as employee safety training programs.

The employees of your vending operation must be trained in proper lifting techniques. In addition to this they must be equipped with proper back braces. The use of dollies for transporting machines and supplies will cut down on accidents. Since this industry requires the employee to move and lift heavy loads, a pre-employment physical should be conducted.

Locations of machines matters

The location and positioning of machines is critical since service and repair work is sometimes conducted in locations where there is high pedestrian or vehicular traffic. Some locations make it impossible for servicers to maneuver equipment and service machines. Servicers and repairers should be provided with protective gear, such as goggles, gloves and back braces. This is to avoid electric shocks, burns and cuts. In addition machines should be bolted to the floor to protect the employee from machine tipping when they are being serviced.

There is not much that a vending operator can do about most of the factors contributing to the recent jump in workers’ compensation costs. An Antares operator can however limit his employees’ exposure to loss by implementing an effective risk management program.

Enhancing Profits in this Economy

Enhancing profits in the present economy can prove to be quite a challenge for your vending business by Natural Choice USA. Most professionals understand that changes in the economy, up or down, offer opportunities to enhance profits. For the time being, it seems that the economy is moving from recession to recovery.

As an Antares vending operator, you need to find ways of enhancing profits for your business. Here are some of the options.

Staffing: Don’t wait

Some time back, it was impossible to hire and retain a warm body. Employee turnover was so high that you never had time to properly train your people, which made your business suffer. The recession had created a large pool of quality unemployed people to fill the empty slots in your organization chart.

In anticipation of improved sales, now might be the best time to recruit and train middle management and supervisory people. These people are available today at low cost.

Price and commissions

Most operators have some locations where employment levels dropped to the point where it hardly pays to maintain the location. In such a situation, it would be best to visit the customers and request higher prices or lower commissions. It is a lot easier to get a positive response when the customer feels that you are doing them a favor by maintaining the service.

Borrow better

The interest rates are lower than they have been since the Great Depression of 1929. That means that this is the best time to borrow money, if you can find someone to lend it to you at fixed rates.

One way for Antares operators to borrow at fixed rates is to refinance the equity in their buildings. If you have enough equity, use the proceeds to pay off higher priced, non mortgage debt.

Considering an acquisition?

Hard economic times are difficult for everybody. A competitor who spurned the generous offer you made there years ago may now be hurting badly enough so that he is forced to accept any offer. Even if that company is losing money, things will change when it gets folded into your Antares operation. A whole set of costs disappear and that can make the business extremely profitable for you.

Today’s Market Place Calls for Change

Most Antares operators have agreed that the vending business has changed in such a way that better control of inventory, in conjunction with more complete accountability, are needed. In the past, gross profit margins were high enough to offset both operating inefficiencies and pilferage.

Category management produces savings by reducing the number of stock keeping units (SKU) inventory. In addition to this, it also yields higher sales due to better production selection choices and more frequent product rotations.

Key development: line item tracking

Several Antares operators noted that because line item accounting creates the ability to manage product categories more efficiently, it makes sense to take advantage of this opportunity. Teaching drivers how to use handheld computers may take time, but the data that is collected can be eventually be used to manage the product selection process better.

Once the operating systems are set up to support a category management program in your Antares vending business, there are usually some ongoing tasks needed to maintain the program. Most agreed that these tasks are not cumbersome. Someone in a managerial capacity must analyze data regularly and make product selections. The amount of support work will vary depending on how detailed the planograms are. Planograms are usually organized according to the location type (office, factories) and/or machine configuration.

Ongoing support functions will vary

The amount of support work will depend on how frequently the planogram changes and also how much of the planogram changes. “Core” products do not change, whereas “cycle” products do. Most planograms are on a monthly to quarterly basis.

Another ongoing support task involves inputting data into the system and merging it with outside data. Some Antares operators have found databases provided by product suppliers helpful. Some rely strictly on internal data, while others receive regular updates from their computer software company.

Most operators choose products based on sales, not profitability. Even though there are some systems that provide profit information on individual products, this aspect of the system has been more challenging.

The Honor Box Market

With profits squeezed ever so hard, the honor box market has become the exclusive domain of a unique group of specialists.

There are some owners of honor box companies who don’t have high hopes for midsize accounts. It’s a hard market segment. Midsize locations have too many people to make an honor box manageable. In other words the bigger the employee group, the more problematic an honor box becomes.

An honor box can be manageable if you find the right Antares vending machines to place in the larger accounts. These machines have product variety because of their large capacities.

Questionable labor force

Mismanagement of honor box operations is the biggest threat to business. Being in the honor box business is like walking on a tightrope, you need to stay focused. Part of this focus needs to be on account turnover, new sales, cash flow and labor.

What you need to make any Antares account successful is a good driver. You can rely on honest drivers to keep the locations accountable for the snacks. If the driver is able to establish a relationship with the account, that account tends to be more willing to make up for shortages. Problems can arise if the account doesn’t trust the driver. The driver should be expected to service between 65 to 70 accounts per day. An average driver can do up to $7, 000 in gross sales per week. This is what can attract the Antares vending company to taking up an account in the honor box operations.

The honor box operator can also find success partnering with a charity organization. This helps with marketing because it can give additional motivation for people to try the boxes in their businesses.

Name brands a must

Having name brand products in a well frequented honor box is very important. Just like in an Antares vending operation, brand is of primal importance. Variety is also very important. A challenging product mix with new offerings and new manufacturers’ names is needed, because people get easily bored with what they are looking at if the mix never changes. Consumers will always pay for name brand products.

Established operators have agreed that there are very few large honor snack businesses starting up. This can be due to market saturation and higher prices.

The Honor Box Market

With profits squeezed ever so hard, the honor box market has become the exclusive domain of a unique group of specialists.

There are some owners of honor box companies who don’t have high hopes for midsize accounts. It’s a hard market segment. Midsize locations have too many people to make an honor box manageable. In other words the bigger the employee group, the more problematic an honor box becomes.

An honor box can be manageable if you find the right Antares vending machines to place in the larger accounts. These machines have product variety because of their large capacities.

Questionable labor force

Mismanagement of honor box operations is the biggest threat to business. Being in the honor box business is like walking on a tightrope, you need to stay focused. Part of this focus needs to be on account turnover, new sales, cash flow and labor.

What you need to make any Antares account successful is a good driver. You can rely on honest drivers to keep the locations accountable for the snacks. If the driver is able to establish a relationship with the account, that account tends to be more willing to make up for shortages. Problems can arise if the account doesn’t trust the driver. The driver should be expected to service between 65 to 70 accounts per day. An average driver can do up to $7, 000 in gross sales per week. This is what can attract the Antares vending company to taking up an account in the honor box operations.

The honor box operator can also find success partnering with a charity organization. This helps with marketing because it can give additional motivation for people to try the boxes in their businesses.

Name brands a must

Having name brand products in a well frequented honor box is very important. Just like in an Antares vending operation, brand is of primal importance. Variety is also very important. A challenging product mix with new offerings and new manufacturers’ names is needed, because people get easily bored with what they are looking at if the mix never changes. Consumers will always pay for name brand products.

Established operators have agreed that there are very few large honor snack businesses starting up. This can be due to market saturation and higher prices.

Cashing In on PET Bottles

PET bottles have made the case for dedicated beverage routes stronger than ever. Investment can be simplified with a plan that phases in dedicated routes.

The introduction of larger-sized PET beverage bottles has complicated the life of the typical Antares vending operator. Plastic beverage bottles account for the majority of single service sales in supermarkets, while in full line vending they account for a smaller percentage. This shows that the Antares operator needs to offer customers the products that they have clearly demonstrated that they want.

PET bottles sell for much higher price points than 12 ounce cans. When operators refuse to offer these products, it means that they are depriving their companies of the higher gross profit dollars. They end up loosing sales by forcing their customers to purchase these products from c-stores and supermarkets.

Most operators have complained that PET bottles produce a lower gross profit percentage as compared to 12 ounce cans, and in addition to this, these bottles decrease space in their route vehicles.

Even if PET bottles produce a lower gross profit percentage, you need to keep in mind that you don’t take percentages to the bank; instead you take dollars to the bank.

Larger vehicles are available

Antares operators face a big hurdle in solving the space problem in their route trucks. Many operators replace route vehicles usually every 8 to 10 years. PET bottles have achieved a sizeable percentage of market penetration with full-line operators. This goes to show that many operators have solved the space problem by purchasing larger route vehicles.

The proliferation of brands in beverages and snacks has forced operators to purchase larger vehicles for mixed product routes. Running a dedicated beverage Antares route has a number of benefits. PET bottles are generally heavier than a case of cans, so it would be an added advantage for you to have a dedicated beverage truck where you can use a forklift to load or unload the cases.

Growth in Potential Outdoor Vending Locations

Leisure locations such as parks and amusements centers have so far been successful for outdoor vending. Leisure locations are the most lucrative type of site for outdoor snack machines. The larger theme parks tend to hire bottlers to do their vending, but the smaller ones often use independent vending operators like Antares vending operators. Opportunities are on the rise as more recreational sites open up.

Consider the facts

The following factors have fueled growth in potential outdoor vending locations:

· Retail establishments that draw heavy traffic have increased square footage.

· Housing complexes with common areas have grown in number.

· Public parks have experienced growing attendance

· Vending management companies which manage vending services for national accounts have persuaded national accounts to make better use of the vending opportunities available, including outdoor sites.

Outdoor machines suffer fewer maintenance problems as they don’t get kicked underneath them and in the condensers. Antares operators offered mixed view on how lucrative outdoor locations are, as compared to indoor locations. Some operators reported that the outdoor machines produce similar returns to indoor machines in similar type locations. On the other hand, vending management companies insist that outdoor locations generate higher sales.

Higher investment, higher returns

The cost of maintaining an Antares machine outdoors is higher, but so are the returns. Independent vending operators, moreover, have the option of leasing cold drink machines from bottlers, who can then assume the additional overhead for security. Other operators have experienced success with beverage and snack vending machines in outdoor locations. This means that you will stand a good chance of receiving higher returns when you place your Antares vending machines in outdoor locations.

While, the market for outdoor beverage machines may be underserved, all the more so for candy/snack machines, which came to the market in the past years. Outdoor vending poses an opportunity for growth at a time when traditional locations are saturated. These locations will be more profitable for your Antares business.