Vending Machine Placement - Location, Location, Location
By Joe Nichols
Be careful with placement fees and commission plans. Paying for locations in the
vending machine business falls under three categories:
1. Placement fees
2. Commissions
3. Locating services
Snack and soda vending requires a marketing and sales effort for account placement. The
difference between marketing and sales is that marketing determines who your customer is,
how much they are expected to buy, how they will get the product, and all other aspects of
your business that induce customers to purchase your products. Sales is the act of getting
the business: closing the deal, getting the money. The sales function is applied primarily
to account placement, and the sales process uses the marketing function to make an offer
to a potential account.
Let me illustrate the difference. Marketing for the vending machine business includes
decisions about what type of vending machines to place (new, refurbished, as-is), what
type of products to offer (snacks, sodas, food, brand name, off brand, etc.), what trucks
to use, how to handle maintenance, who answers the telephone and what they say, if the
machines accept $5 bills or credit/debit cards, how the route and sales people dress, and
so on. Marketing includes every aspect of delivering product to the end user.
On the other hand, sales is the individual act of getting another person to say yes to
your vending machine services. Salespeople use marketing tools. When approaching a
potential account, a salesperson might include a product list, an operational procedure
(if you have technical problems, we will dispatch a repair tech within 4 hours), a route
schedule or other marketing tools. These tools do not generate business by themselves,
they require a person to make the customer aware of them. Salespeople ask for business.
You can handle account sales internally, meaning you (or someone on your team) makes
sales calls, or you can hire a freelance sales company, also called a "locator."
Vending machine locators have several organizational types:
1. Telemarketing - Obtain leads over the telephone
2. Internet - Obtain leads using e-mail techniques
3. Straight sales - Generate accounts then resell them to vending operators
4. Consulting - Customize the sales function to meet your specific needs or requirements
Telemarketing and Internet locators generally pre-qualify leads and sometimes set sales
appointments for you. You make the sales call and close the business. They offer levels of
service related to the amount of information you want and charge accordingly. Pricing
ranges from less than a dollar to several hundred dollars per lead.
Straight sales type locators have business that you are required to operate. Pricing is
a function of account sales, averaging about one month of gross sales.
Consulting locators offer a more customized approach to vending machine sales.
Consultants often have owned vending machine businesses, and can provide marketing
assistance along with sales. Pricing is a function of both sales volume and time billed.
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