Innovative Thinking Fuels a Changing Industry

February 16, 2012 No Comments

Bulk Vending Machine and Merchandise Trends

These mechanical and electronic wonders help feed and entertain us and quench our thirst.  Vending machines, including bulk and full line, deliver everything from soft drinks, snacks and toys to entertainment in the form of music and games.  Today, more operators have expanded their offering to include a greater variety – with bulk delivering items like unsorted sweets, nuts, gumballs, toys and novelties and full line providing snacks and sodas.  Here’s how some industry operators are coping with shifting tastes and trends, a sluggish economy and increasing competition from new venues and other companies.
“As obvious as it seems, it’s a tough market out there and you have to go with what is working,” said Chris Warren, the former owner of Capital Music.  He sold his company to Century Gaming and now runs their operations in Helena, Mont. He noted, “Within the city limits there are only about 26,000 people, but there are approximately that many again in the surrounding valley area.  And, we don’t do vending per se, but things like juke boxes and pool tables.”
As the name implies, gaming is Century’s biggest product.  But as Warren observed, “I would guess that gaming is down about 12 percent here in Montana. At one minute after midnight this New Year’s Eve, however, we were able to add line games to our mix of poker and keno so that might help.”  The line machines are basically slot machines without handles.
Warren emphasized the importance of networking and following the industry, “You need to stay on top of trends.  I look at what’s working and selling.  I communicate with a lot of the operators around our state and the country, too.  So, I hear what is going on.  I think keeping in touch with other operators is the best way and, of course, going to trade shows and reading trade publications to see what’s new.”
In London, Ky., Christopher Asher, the owner of Chris Amusements, said, “I will try pretty much whatever I think will make money.  I’m looking at ATMs now.”  He added, “We take care of a huge area, but the population is not as large as it is in the bigger towns so we have to work hard.  It’s not perfect out there in terms of the economy, but we are still out there doing it.”
In an industry dominated by more senior operators and generational businesses, the 29-year-old Asher has been in business for 10 years and has 1,800 pieces out.
“Part of my approach is to try and avoid places where my competition is,” said Asher.  In terms of demographics, he said, “I don’t just look at one type of customer.  I want to sell to all of them by offering businesses more than any other operator out there.  So, I do a variety and make it easy for the actual customer, including things like equipment that accept credit cards and conveniently located ATMs.  Whatever it takes to keep other operators out, we do it.  We are big in everything from taverns and stores to other sites.”
Asher has organized to handle change and said, “I both sell and lease equipment.  I’ve got two warehouses.  One is 6,000 square feet and a backup of 18,000 square feet in town.”
Harry Owen, owner of Chain O’Lakes Novelty in Waupaca, Wis., said, “We do everything that is coin operated, except vending.  Our most popular things are juke boxes, gaming and pool tables.  And, we operate at resorts, convenience stores, and restaurants, but mostly it’s in bars and taverns.”
In business over 40 years, he noted, “Electronics has really changed the industry.  The elimination of a lot of mechanical aspects of the machines has changed the way they are used and maintained; for example, they are easier to fix.”
Located between Steven’s Point and Appleton, he also observed, “We watch what we buy nowadays because prices are high and it has to provide a decent return on investment.  And, every area is different.  Here it’s a lot of pool and darts.  Then in the summer, arcades kick in.  One thing that has proved very popular are redemption machines.”
“What we offer is across the board from pin ball machines, pool tables, cigarette machines and ATMs to snack and vending,” said Ron Davis, owner of Carolina Coin Amusement in Mt. Pleasant, S.C.  “Key masters and cranes that pick up prizes are among our most popular items now. We have one guy who keeps up with all our merchandise and tracks what’s selling well and we usually make purchases based on that.”  Located in a suburb of Charleston, he added, “We also go to trade shows.”
But one category that is universally growing in popularity is not a physical thing.  It’s a sound as people tune into music in a big way.  “The most popular thing we have are juke boxes,” said Vic McCarthy, owner of Catskill Amusements, Inc. in Hurleyville in upstate New York, about 100 miles northwest of New York City.
McCarthy added, “There are so many titles to select from that there is something for everyone.  There is almost unlimited variety.  I think there are about 750,000 titles so you can pick music from the 1940s to yesterday.  You can go from big band to hip hop and everything in between.  We operate mostly in taverns and this is by far the biggest trend for us.”
Steve Russo, one of the owners of Capitol City Vending in Trenton, N.J., agreed and said, “Digital music is by far the leading factor in our industry, along with pool tables.  In terms of demographics it’s popular from age 21, which is the legal drinking age, to 60.  I would say, though, that 21 to 40 is the strongest segment.”
Russo further noted, “Of course, we also offer other amusements like games, pool tables and pick up cranes.”
Regardless of the region and the range of products offered, the experts agree that when it comes to purchasing new equipment, you should be aggressive, but not overextend until you know what really works. And, they advise that, in general, well-maintained equipment will be used more often than neglected ones.  So, it makes sense to provide clean and colorful machines stocked with the right items.  After all, your equipment is out there selling for you 24 hours a day. -


Effective Vending Tips

General Tips:

  • Keep equipment in shape.
  • Carefully track sales by category and change slow moving products promptly.
  • Add more selections to locations.
  • Spread out routes to increase sales averages.
  • Compare notes with other vendors.
  • Build effective working relationships with location owners and compare notes.
  • Always seek new locations.

Bulk Candy, Gumballs and Capsule Tips:

  • When first filling a bulk vendor at a new location, only fill it half full to keep products fresh until you learn what the location will sell.
  • Avoid putting stickers and labels on your machines because they can be hard to remove and leave a residue.
  • Avoid putting bulk vending machines in direct sunlight because it can cause candy to melt and affect freshness.

Snack and Soda Tips:

  • Keep products fresh.
  • Attract customers by doing the unexpected, for example, rubber band a dollar bill to a can of soda periodically – it’s a small gesture but in places like office buildings, word will get out and it can help increase sales.
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