Starting and operating a bulk vending business may sound like an easy proposition, but there’s more to it than buying a few machines and expecting them to deliver profits as readily as they do the merchandise contained within them. Perseverance, hard work and flexibility are the keys to success in this arena.
“It’s not a ‘get rich quick’ scheme,” said Anthony Scarpella, president of Farmingdale, N.Y.-based Big Apple Vending. Rather, “you only get out of it what you put into it.” Scarpella speaks from experience: While his company is just 7 years old, he has been involved in the bulk vending industry for the past 15 years. Big Apple Vending offers the Northwestern
Super 60, Super 80, Two Column Sticker and Triple Play machines, along with encapsulated prizes, candy and gum. The Super 60 and Super 80 are currently its highest-earning machines; while Scarpella isn’t sure why, he said confections have less of an appeal these days than such prizes as the “super-popular” squishy animal figures and “anything that lights up.”
Scarpella believes many of the company’s accounts were signed at least in part because of concerted efforts to monitor the territory for upcoming new venue openings, via reading local newspapers, driving around the area, networking with other business owners, and the like. “You want to get there before, instead of at the same time as, your competitors,” and this increases the potential for it to happen, he explained. He advised novice bulk vending company operators to resist the appeal of attempting to cover unduly large territories, at least while they are still “green” and are learning how to service their particular customer bases. Instead, he suggested, “newbies” should start with prospects that are “closest to home and therefore more convenient to service, then work outward from there” as they become more seasoned and adept at handling accounts. Equally important is recognizing that municipalities differ in terms of regulations pertaining to bulk vending machine installation; some require that permits be secured before the units are installed and some impose taxes.
Dan Paszkiewicz, president of Baltimore, Md.-based Cardinal Distributing, not only agrees with Scarpella that doing everything possible to be the first to target new venues constitutes an essential step toward breaking into the bulk vending business; he said such a strategy has helped his company to flourish since its inception 40 years ago. Because many “good locations are already taken,” he added, operators who are just starting out would also do well to begin with “secondary” customers, like Mom-and-Pop stores and pizza shops, to build a reputation while keeping an eye out for bigger opportunities—including placements in leisure entertainment facilities and other attractions—that may later open up. “It’s a tough business – it’s difficult to find ‘open’ locations, so you have to buckle down and knock on doors and pursue the secondary ones,” he stated. “Bottom line, though, there is no magic bullet.”
The executive added that the most important lesson he has learned about the business is to “be honest and fair and treat people the way you yourself would like to be treated. Tell customers when something isn’t working instead of pushing a machine or a product on them; it’s how to build a reputation for integrity.” Cardinal Distributing’s highest-yield machines are those that offer catchy, flashy items – jewelry, toys, bracelets, rings, collectible figures and the like. “Children want something with ‘play value’ that they can interact with,” Paszkiewicz noted.
Yet another critical step for bulk vending “hopefuls”: researching the market to determine which bulk vending machines and products might produce the best results. “Customer demographics determine how well a machine and a product will do in a particular location,” said Anita Erzybysz of East Coast Vending in Deltona, Fla. Bulk toy vending machines fare much better for the company than candy vending machines, a trend Erzybysz attributed to the fact that small children comprise a large portion of the customer base of locations served by the company, and small candies, mints, and gum are not really recommended for their consumption.
But as is true when it comes to finding bulk vending locations, flexibility is key here. “Certain customers have certain preferences despite what might be popular in general,” Erzybysz said. East Coast Vending honors these preferences to avoid sacrificing revenues, with the caveat that the outcome may not be as favorable as desired based on the less-than-optimal demographic/product “match.”
Dustin McClure, owner of Phoenix Amusement in Indianapolis, Ind., and Fred Chiang, CEO of Blue Bar Corporation, Irwindale, Calif., have also discovered the importance of market research in moving into bulk vending. “You need to know your customer base,” and to promote machines and merchandise accordingly, McClure said. For example, he elaborated, a bulk vending business operator should not sell a machine that dispenses bouncy balls to a venue that caters primarily to adults; one that dispenses mints would be a better bet. Moreover, he has learned, conducting personal market analyses—for example, investigating other local venues to see what type of machines they have in place and what those machines offer—trumps merely soliciting opinions from friends, relatives and the general public. “This kind of due diligence really pays off,” he reported.
Moreover, in assessing any market, bulk vending entrepreneurs must take into consideration what items retailers are selling in volume, and steer clear of them. “Start with toys and stickers, but stay away from candy,” advised Chiang, whose company is 20 years old. “Candy sales are not as good as they were 20 or 30 years ago because the large retailers are selling candy at very low prices.”
Blue Bar Corporation’s top revenue producers are Gacha machines, imported from Japan. The units hold a wide variety of Disney items and licensed collectibles, whose appeal with children is always quite high.
Approached properly, a venture into the bulk vending business is likely to yield profits—in bulk. As Paszkiewicz put it, “Be diligent, thorough and truthful—the rest will follow.” –
Top Tips for Expanding Your Bulk Vending Business
• Keep abreast of trends, and jump on them early. Don’t try to sell customers on merchandise that’s no longer “hot”—and the machines that dispense it.
• Research your suppliers. There may be subtle differences in product that can make or break a sale.
• Don’t assume that offering the least expensive merchandise to fill bulk vending machines will keep customers coming back. Your customers’ customers know what’s “cheap”—and they won’t necessarily like it, causing them to stop using the machines.
• Expand your assortment of machines and product when you can; it will widen the breadth of customers your business can serve.