Driving Toward Profits: How to Choose the Right Vehicles for Your Vending BusinessSeptember 15, 2010 No Comments
In the vending business, thousands of vehicles are driven millions of miles nationwide to fill machines, repair jukeboxes and deliver gaming equipment. Business doesn’t happen without reliable modes of transportation that can help lift and transport heavy machines as well as cases of soda and hand-crafted pool tables.
Financial concerns certainly play a role in deciding what types of vehicles to use. Cost-effective decisions are a driving force behind the vehicle-buying strategy employed by Daniel Cribbs, owner of WL Perry Music Co. in Fort Pierce, Fla. His fleet of five vehicles includes the Kia Rio, a compact car, for making runs that don’t involve heavy equipment. With gas prices remaining high, and his customers, primarily bars and restaurants, taking a hit in the current down economy, Cribbs thought that incorporating a car with good fuel economy into his business made sense.
“We use the Kia for making runs around town,” he said. “It’s better on gas than driving one of the trucks.”
The Kia can get up to 28 mpg with city driving and upwards of 30 mpg on the highway. Comparing that to pickup trucks and vans, which average about 15 mpg in the city and 20 on the highway, that’s a significant difference when it comes to filling up at the pump.
The number of miles driven in a year is another factor when making vending business vehicle decisions. WL Perry Music Co. serves businesses in a 50-mile radius around this coastal Florida location with two pick-up trucks fitted with hydraulic lift gates, a panel van and a mini-van. Cribbs purchases his vehicles rather than taking on leases, due in part to the fact that high mileage would cost more with a lease.
“Also, with all the different drivers I have, it would be difficult to maintain leases on all the trucks and other vehicles,” he said.
Cribbs shops at local dealerships when replacing or adding to vehicles in his fleet. He also uses local mechanics for routine service and maintenance on the vehicles, most of which are seven to eight years old, he said.
“We’ve been in business for 60 years, so we know all the local business people and go to them as much as possible when we need new equipment or service,” he said. “Keeping business local is a way we can help the local economy.”
Economic considerations weigh into business decisions at Williamson’s Sugar Loaf Amusements, where President and Owner Lloyd Williamson continues a more than 50-year tradition of successfully serving customers in Minnesota, Wisconsin, Iowa and Illinois from three locations in Wisconsin and one in Winona, Minn. With such a broad service area, Williamson looks to consolidate long-distance travel, fulfilling any non-emergency needs in similar areas at the same time.
“We’re prioritizing jobs and when we can make a run to one location at a time we do that,” he said. “We try to group services calls together if we can.”
This family run enterprise, started in 1955 by the late Lloyd M. Williamson, has grown over the years and now operates with 18 vehicles. The fleet consists of a variety of pickup trucks with lift gates, small station wagons, Chevy Suburbans and small box trucks. A few of the trucks are fueled with diesel, with engines that last longer and are more powerful than those that burn gasoline. The diesel trucks are used to haul trailers and for other tasks that require vehicles with powerful engines.
Maintenance costs for a fleet of vehicles the size of Williamson’s include oil changes every 3,000 for the smaller modes of transportation, plus routine repairs that occur throughout the lifespan of a service and delivery vehicle. With investments like this made over time, Williamson prefers to buy vehicles rather than lease.
“When you purchase a vehicle you own it once you’ve finished making the payments,” he said. “With a lease you’ve paid all that money and have nothing to show for it.”
Williamson noted that when one of his vehicles comes to the end of its life it can have as many as 200,000 miles on the odometer. He replaces a few vehicles like that every year.
Jeff George, president of Wyoming Amusement in Casper, Wy., also replaces one or two of his seven pickup trucks every year, mostly due to high mileage. Two of those vehicles are diesel trucks, one is a half-ton truck and the remainders are four-door gas engine trucks. In the course of his 19 years in the business, he has considered buying smaller, more gas-efficient vehicles. He even purchased a PT Cruiser at one time. However, while this plan looked good on paper, in reality, there were no financial savings.
“We actually wasted more time getting to the site with the PT Cruiser,” George said. “Most often, when we arrived at the site, we realized that we needed the larger vehicles with tools to do the job. We would have to leave and then come back to complete the job.”
He also purchases his trucks, although about 10 years ago he tried leasing a vehicle. He said that in the end, with mileage and other factors, it cost him more to lease than to buy.
With a service area of about 250 miles, Wyoming Amusement replaces a truck about every two years. George said that his drivers do not require additional training and that two of his drivers even have CDL licenses.
At Velasquez Automatic Music Co. in Chicago, Ill., service technician Scott Mitchell described a cost-cutting measure at this company that involves personnel using their own vehicles, primarily SUVs, to travel to and from customer sites. The business does use one box truck with a lift gate to help with heavy deliveries, he said.
Serving an approximately 50-mile radius, Velasquez Automatic Music Co. also takes steps to consolidate services calls, when possible, Mitchell said.
“It requires more planning on our part but it’s worth the savings when we can do it,” he said.
In the vending business, timely deliveries and service can make the difference when it comes to maintaining and building successful routes. Using the right vehicles in a cost-effective manner can help pave the way. –