AMonline Blog

A portion of a recent article in the Fort Meyers, Florida News-Press described Garage Vendors as the unlicensed, uninsured, unaffiliated “bane” of the vending machine industry. To portray these hard working men and women in this way is unfair and in the vast majority of instances entirely unwarranted.

The term Garage Vendor is a vending industry term used to describe a small vending company that operates out of their garage or a small rental storage facility.  Other industries often use the term “mom & pop” operation.

Most of these companies are family businesses with only 1 or 2 maybe 3 people working long, hard hours desperately trying to compete with larger vending companies who have advantages that they don’t have or may never have.  They have their life savings wrapped up in their fledgling companies and are struggling to stay afloat.  I know lots of Garage Vendors; they are some of my favorite people.  I help them whenever I can, usually at no cost. 

Many of the largest and most respected companies in the vending industry started as lowly Garage Vendors.  Nathanial Leverone (Canteen’s founder) and Davry Davidson (one of Aramark’s founders) both started as Garage Vendors in the 1930’s.  The prosperous dot com companies existing today that were started in garages are legendary.

Let’s be sporting. Give these folks the respect they deserve for risking their capital and making the effort to build something from nothing, it’s the American way.

Tom Britten
 Analyst . Intermediary . Consultant 
Phone 813.469.5437
E-Mail tombritten@msn.com

You’ve tried everything else……….. Try lowering your prices

Before you accuse me of being totally off my rocker, read on:

Mr. Client, I know you have read all the same stuff that I have about employers helping their employees’ cope with the dramatic rise in prices at the gas pump.  Some employers are giving stipends based on commuter mileage, offering work at home Fridays and company sponsored car polls. I was wondering if there was a way I could help you help your people and I came up with an idea I would like to explore with you.   What if you agreed to a reduction in commissions and I agreed to a corresponding reduction in the retail price of vended food and beverages?

Not everywhere, but, at some accounts this could be a win-win. 

As same store sales continue to slide most folks I talk to blame lack of discretionary dollars.  This is only part of the cause of lost sales.  Consumer resistance to higher prices is a big factor here.  Even if the amount of the commission reduction is exactly equal to your drop in the price, I am betting that the vending operator will experience increased sales as consumers return to lower priced products.

Tom Britten
Analyst . Intermediary . Consultant
3922 Bubba Drive, Zephyrhills FL 33541
Phone 813.469.5437
Fax 813.783.7908
E-Mail tombritten@msn.com

With out question the cost of fuel and the greening initiative is changing the way we live. 

In our industry, we clearly see the effect of declining disposable income in our same store sales analysis. Now a new element threatens to take a bite out of revenue.

There is a rapidly growing movement underway to take a new the workweek. Employees all across the country are currently submitting petitions to employers in attempt to gain approval of four-day weeks and telecommuting. They are citing more the just gas savings, here are just a few points that are being laid out very convincingly.

The 4-Day Work Week would mean less traffic congestion.

The 4-Day Work Week would mean fewer auto accidents each year.

The 4-Day Work Week would mean a reduction in absenteeism

The 4-Day Work Week would give us more time for family

The 4-Day Work Week would decrease labor costs

The 4-Day Work Week would decrease operational costs

The 4-Day Work Week would mean a reduction in the cost of childcare

These employee proposals also stress the use of internet as a tool to scrap the antiquated notion we should all be at the office from eight to five on Monday through Friday.

The revenues in the business and industry channel for food service, vending and OCS will decline in direct proportion to the decreased time employees spend in their traditional work place. This is an iron-clad certainty.  I suggest that you keep your ear to the ground at all accounts; you may have to adjust your revenue forecast and identify actions needed to protect the bottom line now.

Employee performance management has been mainstay of most organizations, yet is fraught with imprecision and dissatisfaction.

Rather than serving as opportunity for providing direction, growth and alignment, it is more often seen as a necessary evil.

The Aberdeen Group surveyed over 600 individuals: while 95% indicated conducting regular performance reviews, only 11% indicate satisfaction with the process in their organization.  There is clearly a disconnect between the concept of performance management and it’s successful execution. 

Aberdeen reported that two key performance criteria defined ”Best in Class” Companies (BiC) with regards to performance management:

1. Improved bottom line results: BiC companies experience a minimum profitability growth of 10% or move over last 12 months.
2. Increased employee retention rates: 94% of BiC companies increased or maintained stable employee retention rates over the last 12 months.

Coming in future postings:

• What are top five (5) pressures driving performance management?
• What are strategic actions necessary to achieve performance management goals?
• What is the connection between productivity, turnover and job match?

Have a great week; back to you soon!

Sincerely,

Dave McCaffrey

PredicitiveAssets

(866) 584-9551 (toll free)

Dennis

I agree that the quality and variety of vended products has vastly improved since the 60’s.   Too bad the industry lost most of the ideal venues for the application for vended food and beverage services.  Ironic isn’t it?

While my Dear Friends in the traditional full line vending business are agonizing over how to sell candy bars, potato chips and soft drinks profitably, something is going on in the background.

The self Service Revolution:

* 97% of consumers would use self-service to handle a transaction or service.
* 86% of consumers say they are more likely to do business with a company
   that offers the flexibility to interact using self-service.
*66% of consumers say the availability of self-service technologies
  creates a more positive perception of the brand.
*56% say their likelihood to use self-service has increased over the last
  12 months.

Speed, convenience and ease of use are identified most frequently by respondents when asked why they would choose self-service over personal assistance in each of four industry sectors:

* financial (faster-70 percent, more convenient-67 percent, easier-52 percent);
* retail (faster-68 percent, more convenient-64 percent, easier-52percent);
* travel (faster-63 percent, more convenient-61 percent, easier-60percent); and
* healthcare (faster-53 percent, more convenient-50 percent, easier-47percent).

Our industry was once the leader and innovator in the “unattended sale” concept.  Are we to be left behind in this major shift in retailing?

 *Sources of statistical data:Time Magazine, March 2008NCR Self Service Consumer Survey, 2008 

Timmy

Do not look for a vending machine that cooks from scratch (as in, peels the potatoes, slices the carrots and braises the beef) anytime soon I foresee a couple of barriers this type of device:·        

Sanitation, temperature control and related food safety issues. ·        

Extended processes, even though automated, mean longer delivery cycles and the vending advantage is fast and convenient delivery. 

Vended products are not usually served up with candlelight and violins. Frankly,  I do not see the need anyway.  There are lots of vendable microwaveable packaged meals and sandwiches available that are of excellent quality.  

 Advances in the packaging microwavable foods have been a big plus factor for the quality of vended foods. Absence of clear, concise cooking instructions on the package can be an issue.  Failure to follow the heat and time instructions will adversely affect finished product quality.  

A little consumer education is always beneficial when new products are introduced.

Keep the new ideas coming……Best RegardsTom

A Route Driver (or any employee) may be performing poorly because……

1. Their learning skills (verbal and numerical capability) may not match those required to do their job: 

> If their learning skills are lower than required, the employee may literally not be able to do their job properly. 

> If their learning skills are higher than required, the employee may have communication problems or become bored with their job. 

2. They may not have the necessary unique behavioral traits required to do their job.  In other words, they may not fit into the culture of the job at your company.  

3.  They may not have the occupational interests that match those required by their job.  If their interests do not match those needed by their job, they will lose interest and become disengaged.    

There is a management axiom that says: “you can’t manage what you can’t measure’. 

Given that most current measuring standards are based on functional results (sales, profit, returns, etc) that are historic (they tell you what happened yesterday, not what will happen tomorrow), the scale to which an employee is being measured may not have anything to do with the employee’s success….or lack there-of in a job function.

To be able to manage your employees in a predictive manner, you need to be able to measure their learning skill, behavioral traits, and job interests.  Once you have assessed what may be causing their sub par performance, you will be able to manage that employee to increased productivity. 

I hope this information helps improve productivity and reduce turnover at your company.  Please let me know if you have any questions.

Sincerely,

Dave McCaffrey

profiles@predictiveassets.com

866 584-9551 (toll free)

Manpower’s ‘Hardest Jobs to Fill’ list reveals that many workers with traditional blue-collar skills are leaving the workforce.

Engineers, Machinists, Tradesmen in Short Supply

Because of an aging workforce and a new generation of workers entering other professions, engineers, machinists and skilled trade workers are the three most difficult positions to recruit for, according to Manpower’s annual list of “The 10 Hardest Jobs to Fill.”Baby boomers are starting to retire, which means many workers with traditional blue-collar skills are leaving the workforce, says Melanie Holmes, vice president of corporate affairs for the Milwaukee-based staffing giant. The survey, released Tuesday, April 22, covered 42,500 employers from 32 countries.The retiring boomers are compounded by fewer young people entering these fields. Less than 10 percent of college students in America are getting engineering degrees, Holmes says.The 10 Hardest Jobs to Fill are:

1. Engineers

2. Machinists/machine operators

3. Skilled trades (your Route Drivers?)

4. Technicians (your Machine Technicians?)

5. Sales representatives

6. Accounting and finance staff

7. Mechanics

8. Laborers

9. IT staff

10. Production operators

Technicians, sales representatives and accountants/finance staff also made it onto Manpower’s list.

Employers struggling to fill these vacancies can, in the short term, enhance recruiting efforts on college campuses and at technical schools and also emphasize the retention of older workers.

Longer term, Manpower suggests, employers should partner with local educational institutions and encourage students to enter these professions.

Nearly 25 percent of employers say they are having problems filling positions because of a lack of talent.

“Employers need to do everything they can to give opportunities to everyone who is willing or able to work,” she notes. “This includes the aging workforce, the younger generations, people of color and people with disabilities.”

Successfully recruiting young workers will depend on how well companies can cater to their specific needs. “This generation wants flexibility, they want to be innovative on the job,” Holmes notes. “And they want to have fun while they are at it.”

To minimize the impact on your company,

PredictiveAssets suggests you:

1. Modify your employment profile: Focus on learning skill, behavioral traits and occupational interests as opposed to education and experience.
2. Broaden your employment profile: Establish core competencies for all jobs in your company. Compare all applicants to all job functions, not just the one being applied for today.
3. Utilize accurate selection tools: Tomorrow, more than ever, you cannot afford to make a bad hire; use all available resources
4. Become an employer of choice: Job fit is much more important than compensation; do you have good job fit for all personnel at your company?
5. Finally, use broader advertising tools (i.e. CareerBuilder or similar online services) instead of local tools: a qualified applicant might be moving to your market next month!

For information and/or assistance with finding, selecting, hiring and developing your workforce, contact Dave McCaffrey at profiles@predictiveassets.com or 866 584-9551 (toll free).

During my visits with operators regarding cashless solutions invariably the word “cost” comes into the conversation. “How can we absorb more costs when our current bottom line profit is so small?”

 First determine how you can make more money in your accounts with a cashless solution.

• Price increases

I have been told that the average reduction in unit sales after a price increase is around 15% to 20%. I have seen time and time again when a cashless solution is implemented at the same time prices are increased, unit sales stay the same. As an example, you have a beverage machine that sells 100 units per week at $1.00 with a 6% sales tax and 10% commission and a case price of $15.00 (62.5 cents per unit). You raise the price to $1.25 and lose 20% in sales, you will gain $650 in annual profit. If you take the same scenario but install a cashless solution and maintain unit sales, you will see a $775 increase in profit after all the costs for cashless are taken into consideration. You will see an increase in profit of $940 if the account absorbs the processing and monthly service costs.

• Sell higher end items

I have visited operators who are using one machine to vend traditional beverage and snack items and other machines to sell higher end items such as energy drinks and teas and higher quantity snack items. By “mixing up” the pricing structure in a category, the price increase process becomes much easier as all items are not priced the same. Simply add new higher end items to maintain margins. Cashless will help you guarantee that you do not lose these high end sales due to the fact that the customer does not have the cash in their pockets.

• Have the account pay for part of the cashless expenses.

Many operators and bottlers are selling their accounts in such a way that the account picks up part of the expense for the addition of cashless to their machines. But the account must believe that there is a benefit for them to have a cashless solution on their machines. During the “price increase” meeting, explain to the account that we must go to $1.25 on our beverages. The convenience store down the road is at $1.39 plus tax., we only want to take price to $1.25 including tax.. We know how hard it is to buy something from a vending machine when the price is over $1.00. We have been thinking of installing a cashless solution using debit and credit cards for your employees (students, visitors). How do you think this could be of benefit to your employees (students, visitors)?

An answer you might get is that we have a young work force and they do not carry cash. Another might be that we would like healthier items in the machines but we know they tend to have higher prices. Another might be that we depend on the commission dollars and that a credit / debit card solution will allow you to sell higher priced items thus higher commissions for us.”

Your answer is “You are absolutely right in that this would benefit your people in these ways. Let me share with you our costs associated with implementing such a program. First the hardware cost is $???, the card processing fee is a certain percentage and our supplier charges a certain dollar amount per month for the cell phone and card settlement capabilities. If we pick up the hardware cost could you pick up the monthly fee and the card transaction fees? With the price increase, your commission dollars should stay at the same level if not go up after all the costs are taken into consideration.”

I know it is easier said than done, but I personally have been on these calls and I have seen it work first hand. Let me know if I can help you achieve the same results.

Hiring the right person?  Improving performance?  Helping Managers succeed?  Tell us what keeps you awake at night and we will make some suggestions that will ultimately let you get more sleep!

Hope to hear from you soon!

Regards,

Dave “Mac” McCaffrey