An Education in Vending

Antares Corporation has offered great opportunities to a number of vending operators. Using the Natural Choice vending program, you can get to know how great a vending opportunity can be.

The future of automatic merchandising

The per capita purchasing from Antares machines as well as other machines will grow faster than overall consumer spending. The vending machines are becoming more reliable and the product selection is much better, consumers really appreciate the efficiency that comes with a successful transaction. People are tired of dealing with poorly trained personnel and would prefer to do business anonymously with a machine.

Technology, and the speed with which it is employed in our channel of trade, will define the winners. Route efficiency will increase and product merchandising will become more scientific. In addition to this, inventory management will improve. All this will bring about enhanced profitability for your Antares business. The marginal operators will no longer be able to compete, which of course will come with greater profitability. This scenario will favor the larger operators because now, for the first time, there will be discernable advantages to scale.

Product: the leaders will dominate even more

Antares vending operators understand that the big brands sell better. A new sexy product has a shot at selling better than one of the category leaders when first placed in the machine. There is a slippery slope for the dominating companies to be concerned about. Product proliferation is a double edged sword. Enlightened manufacturers recognize that vending offers benefits to new products and brand extensions. This, however, often comes at the expense of a company’s own products and may have the effect of reducing overall sales.

The vending business is getting more scientific, and Antares operators are beginning to understand that there is a cost associated with managing too many stock keeping units (SKUs). Category management can help you to manage all this.

Vending as a retail channel of trade

In the not too distant future, automatic merchandising will be a fully mature retail channel of trade. The vending industry needs to capture information about the consumer and report this information to the manufacturer; this will enable the manufacturer to understand their consumers’ buying behavior.

Handheld Technology Moves Forward

Some number of years back, only the earliest of early adopters was using handhelds in their vending operations. Today, there are in use at a larger percentage of operations. Handhelds are used in conjunction with an integrated software system. They are helping Antares vending operators to improve virtually every aspect of their business- from cash accountability to productivity to employee retention.

What the first generation did

The first handheld’s primary benefit was cash and product accountability. Drivers could use the handheld to record the meter number and compare it with the products sold.

Despite their drawbacks, Antares vendors, as well as other vendors saw the need for a more sophisticated handheld computer that would facilitate accountability, scheduling, merchandising and inventory management. Since back then, handhelds for vending have steadily evolved. They have become smaller, cheaper, and more reliable. Some added scanners, which expedited product exchanges.

The second generation

A stepping stone to the second generation of handhelds was the HP Palm Top. It debuted many of the features of today’s handhelds. The ultimate breakthrough in the handheld revolution was the introduction of the Palm Pilot. This is the fastest adopted technology product in history.

Vending software manufacturers rushed to bring this giant leap in handheld technology to their customers, which of course includes Antares vending operators. These systems had the ability to interface with vending machines via DEX technology. Their popularity in the route delivery market has only grown.

A multitude of benefits

All these features translate into a host of benefits for the Antares vendor. The most important being the ability to retrieve item-level sales data from machines. In the past, operators could only track products by price category. Now with item-level tracking software and a handheld computer with a DEX connection, drivers can download this valuable sales data in less than five seconds.

Factors That Influence Each Location’s Profits

To succeed in your Antares vending business, you must stay on top of numerous factors at the locations that spell the difference between profit and loss. Professional managers understand that both parties in a business relationship must receive a benefit, or the relationship will not survive. Although the principle sounds easy, it is difficult to design effective win-win relationships because by definition, business relationships are adversarial in nature.

Unfortunately, in service industries like vending, deals get struck that contemplate long term relationships. And over time, it is likely that the needs of one or both parties will change. Antares vending operators should understand that every location agreement, verbal or written, is or should be subject to renegotiation, at any time.

Consider what happens in a typical account

Consider the changes that could take place in the typical operator/location relationship over time. The cost of some snack or soft drink can go up unexpectedly, which means that the operator would need to increase prices. The location will then add a second shift and thus would require additional service hours or more equipment. The location would then cancel the existing second shift and unless changes are made in service hours, selling prices, commissions or equipment on location, the account is no longer profitable. A competitor then comes along and offers lower prices, higher commissions or additional services. This kind of thing happens quite often, so if the Antares operator wants to remain profitable, these problems must be identified and dealt with as they arise.

Many operators never solve the original problem. That is, building a realistic profit and return on investment into the terms of the original contract. In a haste to book the location and build the top line, the average Antares operator seems wiling to give away the store, with no thought at all given to the bottom line. A professional would understand that every location deserves a careful pro-forma analysis to determine the terms that can be offered in order to maintain the bottom line because location profits margins tend to deteriorate over time.

Success Demands Commitment

When in search of new customers for your Antares operations, you need to think of how you can help that person through your product or service. You will need to think of you can do personally for this person outside of the product or the service. This is what is called commitment.

Of course, you ultimately want to sell your candy or your Antares vending machine, but deep down you really want to know this person as a friend. These basic concepts are major components of what makes you successful in sales. For the sales people on the operator side of the business, especially if you are in a large market, you tend to do more cold calling. Yet many of the same things mentioned in relationship selling apply to you as well. Personal relationships can turn into referrals, which mean more business for your Antares operations.

One sure way to refine your sales processes and increase your sales is to read books on the subject at home or listen to tapes. Looking at your job from different perspectives is always good. Each book you read will offer a different point of view as to how the sales process should work.

Who do you talk to? What do you say?

You need to contact the right people, say the right words and most importantly, ask the right questions. This takes practice, and practicing on a prospect is usually not a good idea. Practice on your own to achieve the proper flow. To begin with, you need to contact the right person and remember that your Antares vending services will affect the employees, so human resources may be a good place to start.

The proposal

By the time you are writing the proposal, you should know that the prospect has already decided to become your customer. The proposal would be an affirmation to the specific topics and solutions that have been agreed upon by you and your prospect.

If the client is not ready to move forward with you, then you must uncover additional issues and provide mutually agreeable solutions before the presentations of the proposal. Remember, you must make an agreement with your prospect early in the sales process. If you have the agreement in place, closing the sale is that much easier. The sales process involves multiple activities that are done simultaneously. You can be successful in your sales process so long as you take the right steps.

The Vending Sales Process

Whether you are a small operator or a large multi state operator, you all have to sell business to stay in business. Life in sales is like a roller coaster ride. One minute you can be riding high because you have just landed that profitable account and the next minute you can get a call from an irate customer that your machine is out of order again, and that if you don’t get it fixed, they will find someone else.

For your Antares operations to be successful, your salesperson needs to be able to handle the highs and the lows of everyday sales life. Using the Natural Choice vending program in your operations will also ensure your success.

Key element: personal relationships

The key to the vending business is personal relationships. One side of the industry includes the product, equipment and other goods services that are sold to the Antares vending operator. On the other side of the fence are the sales people who represent the vending operators who go out everyday and try to obtain new business.

Relationship building

You will need to build up a relationship with your prospective customer. Get to know what type of personality they have and what they have done to make their business so successful. You need to build relations with everybody who is involved in the vending operations.

Key focus: The decision maker

Be sure that you are talking to the decision maker and get to know who else will be involved in the decision making process that could influence the decision maker.

You will get plenty of prospects for your Antares operations by making cold calls everyday. Do not let anything interfere with your cold calls during this time frame. Cold calling is a difficult process, but persistence and quality of calls is the key to being successful.

Identify the customer

Next, determine what type of prospect you want as a customer. Do you primarily want larger vending accounts or do you want primarily small snack and soda accounts. As an Antares operator, you would want the smaller accounts, so you would need to achieve more “closes” to reach your goal.

Best Practices to Stay Profitable

Identifying certain operating metrics is the first step to keeping costs in line with revenues. Antares operators can adjust selection, service schedules and other factors without compromising customer satisfaction.

Software forecasting can reduce inventory

Another way to lower costs and improve profitability is by reducing inventory. This is when software forecasting can be a real help. Knowing what an account needs before a service visit allows the driver to carry only a single day’s inventory instead of the typical two and a half to three days’ supply found on most trucks.

Carrying fewer inventories has the added benefit of requiring smaller vehicles. They are cheaper and more fuel efficient. These data analysis tools in vending software can help Antares vending operators to reduce their inventory. With item level tracking, operators receive actionable data on which products are hot and selling. There is no point in stocking merchandise in your Antares vending machines that a particular account doesn’t want. Eliminating unpopular products and maintaining a more efficient warehouse can have an almost immediate effect on the bottom line.

Provide more value to the same customers

Instead of focusing on lowering your costs, you cab raise the top line by providing more value to your existing customers. There are ways that you provide more value to the customers of your Antares vending operations. This will definitely improve you customer relations.

Improved accountability holds the key to profit

A DEX accountability system will allow you to reduce cash accountability issues to within 01 percent. Without DEX, you can start tracking cash meters and reduce cash accountability significantly. To track warehouse and truck accountability for your Antares operations, you will need to track what comes into the warehouse, moves to the trucks and eventually makes it to machines. The only other way to do this effectively is with software and handhelds with bar code scanning, if you are not ready for that, then you should concentrate on cash accountability with cash meters and tackle the warehouse later.

Costs have made the business environment more challenging, which means that implementing best practices using fact-based data, will allow you to stay ahead of your competition.

Questions to Ask When Carrying Out an Opinion Research

Ask the right questions

Whether you are planning on a quantitative survey like an Internet or mail approach or a qualitative investigation like a focus group or a one-on-one interview, the general structure of the research itself should follow the same outline. Firstly, you will need to tell your Antares customers about why you are conducting the research and why their input is valuable. Customers should understand that their feedback can have real benefits for them.

The first research questions should be general, easy to answer and should have capability to spark an interest in the rest of the survey.

Questions should create interest

An initial question like, “What is your level of satisfaction with your Antares vending service?” can be a way to immediately engage a respondent and generate interest in what question that may follow.

Once you’ve built some interest with the respondent, questioning can begin to move into the more meaty issues that are your primary interest. Three principles of good question can help guide you to ensure reliable and valid responses.

1) Questions should ask about first hand experiences or perceptions. Asking customers about the perceptions regarding your Antares business opens responses to significant error. Questions should focus on the individual respondent’s beliefs, attitudes and behaviors.

Questions should focus on one issue

2) Ask questions one at a time. Compound or “double-barreled” questions can muddle a respondent’s ability to answer a question and your ability to interpret the results. “Overall, how would you rate our Antares customer service and product offerings as compared to other vending operations you have engaged in the past?” is a good example of a double-barreled question that may leave a respondent with an inadequate means to answer the question, and you with difficulty interpreting the response.

3) Use words that ensure the respondents will be answering the same question. All respondents must understand the questions in the same way. Definitions should be provided to all respondents.

Key Sales Strategies

There are strategies that can help you to boost your Antares vending business. You will need to use some of these strategies to survive in today’s market.

Market Research: It takes different forms

Market research is also a part of your marketing. This can involve extensive activities, such as hiring a marketing consultant to evaluate your services and the market you serve. It can also be as simple as earmarking time to understand what products and services are becoming popular.

The convenience store industry has taken a big bite out of vending sales. The people who operate these outlets are brilliant marketers and merchandisers. You as an Antares vending operator can learn a lot from them.

The Selling Strategy

Defining your selling strategy is clearer cut then your marketing strategy. The first objective in selling an Antares vending service is to get face to face with a qualified prospect. Selling at corporate level is different than at the “street” level. Sales is very hard work

Selling vending is a specialty

Most buying decisions for vending service are made by groups with a single approval required from the top. When the prospective buyer is better at buying than the seller is at selling, the buyer will always get the better deal. When selling, you need to talk to the right person, say the right thing and ask the right questions; all at exactly the right time.

Traditional advertising has limited value

Vending is not a business where advertising makes sense. For this reason, newspapers, billboards, radio spots and other traditional forms of advertising are not good investments for Antares vending operators. Personal contact and referrals are still by far the best advertisements for your Antares business.

If you openly acknowledge that things have changed and that we now have a whole new set of problems; if you accept the fact that it’s not business as usual anymore and face these new challenges with firm resolve and bold new solutions, your future success in this great business can be assured.

Methods for Controlling Cash in Vending

The number one reason vending operators install software management solutions and choose to utilize DEX is to better control cash shortages and product shrinkage in their operations. This is where a software system working with DEX data can provide tremendous control.

Traditionally, the first method Antares vending operators used to reconcile cash is comparing cash collected to product sold out of a vending machine. This method works, but it requires that a driver inventory a machine every time cash is collected.

This method can be completely circumvented by a driver ‘running his own product through the Antares vending machines. In that case, the driver makes out like a bandit by running his product through the operator’s assets.

Cash and vend meter methods

The second method that Antares operators can employ for controlling cash is the use of a vend meter in a single price machine, or a cash meter in multi priced machines. Cash and vend meters always provide cumulative data that is compared to the previous reading to determine the difference.

This method can work, but it is dependent on the driver accurately recording the meter readings. In some cases, drivers can still get away with running their own products through the machines by calculating and reporting false meter readings. The Antares operator can catch this during an audit of the machine’s meter readings.

Obviously capturing the cash meter reading electronically from a machine via a DEX reading during the service tightens up most of the process. The driver will never see the meter reading and it will be captured accurately using a tamper proof method. In this way the driver can never sell his own products the Antares vending machine. This will not immediately solve all cash control problems because capturing a cash meter via DEX goes a long way to preventing most cash control problems. The driver who takes $1 per day from each machine can only be caught by analyzing trends over time. Most Antares operators would agree that it is much harder to prove a driver did anything wrong unless it can be shown within a short period of time that there is money missing.

A Challenging Environment for Vending

Antares operators are facing the most challenging business environment ever, an as a result of which they need a plan that will give them direction. An economic recession hit at a time when technology was offering a host of possibilities. Operating costs have risen while opportunities to increase sales have eluded most Antares operators. The Natural Choice Program offers Antares vendors the right solutions for increasing their sales.

The current economic situation gives all size companies sufficient cause to take the time to establish a business plan. The business plan will organize “hard data” in a way that gives the company direction. The more “hard data” a business has, the better it can set goals and at the same time monitor its performance.

A business plan will show the Antares operator how the operations will deploy its resources over a specific time period in an effort to maximize returns. Although much of the plan will focus on the deployment of capital and operating cash flows that are generated. A business plan covers the use of all company resources, including human resources. Most Antares operators operate under a nebulous plan.

The current state of the vending industry makes planning more imperative than ever. Aside from one of the most challenging economic environments the industry has ever faced, the current business climate requires more direction than in the past. Customer needs are less uniform than ever. An Antares operator serving a large metropolitan area needs to understand the demographics of the customer base. Equipments are offering more possibilities than ever. These technologies offer enhanced customer service, but require additional investment.

Vending software offers the ability to gather financial information faster and more accurately. This information will be used to improve customer relations. The internet also allows companies to gather information about products faster, which can then enhance product selection. The Antares operator needs to assess what products will maximize sales the more an operator knows about his customers, the better his selection decisions.

How Fixed Costs Can Double Up Quickly

If you assume that your Antares business is growing and that you will be adding more routes over time, then you will need to treat expenses such as route labor, vehicle costs and depreciation costs as variable costs. They are only fixed expenses in the short-term. If you keep a route person working, servicing a substandard account, you will have to hire a new route person for your Antares business, much sooner when a good account comes along. This same logic applies to vending equipment.

If you keep equipment employed in non profitable accounts, the equipment will not be available when a profitable account comes along, and you will have to needlessly invest in new equipment. Therefore, these expenses should be eliminated in determining if a particular account should be resigned, because they are step-variables expenses.

Finally, the average Antares vending operators usually forgets to deduct the direct labor cost of order picking in the warehouse, cash processing and the labor used for data processing attributable to the location, as expenses that will disappear if he gives up the location. You could argue that these are fixed costs, if each function employed only one person, and you couldn’t eliminate the job if you gave up the one location. However, if any of these functions employ more than one person, you should be able to reduce the hours of a second employee.

After adding up all the direct costs that would disappear, you should give up the location if the revenues fail to cover the direct costs of your Antares vending business. This problem becomes a little more difficult to solve if the revenues cover the direct costs but do not fully cover the fixed or so called overhead costs that have been allocated to the location.

In truth, if the fixed costs in your Antares business, are really fixed when you give up the location, it means that whatever contribution the location makes toward covering the fixed costs will disappear from your bottom line.

At this point, you will need to decide whether you should keep the location in your Antares operations. Before you do that, you will need to understand the dynamics of allocating fixed or overhead costs to individual location P & L statements. Fixed or overhead costs are a moving target in most businesses.

Commission Systems

Commission Systems need proper approach

Unsophisticated operators install route commission plans with the hope that it will provide a simple silver bullet solution to all the staffing problems. A commission system would sound like a perfect solution to them.

The level of an employee’s compensation is tied to the level of productive work that is done. So given the incentive, most people will be willing to work harder, faster and smarter. That is the reason why it is sometimes referred to as incentive compensation.

You will need to use a proper approach when it comes to implementing a commission system in your Antares vending business.

Commissions bring speed

Commission systems work very well in environments where the employee has a great deal of control over the rate of production. This should be based upon his ability to work harder and faster.

For example an Antares route person who is paid on commission basis knows that he will earn money if he is able to collect more money on his route. This is the reason why we say commissions bring speed.

System must motivate productivity

Based upon the incentive, a service person will learn how to fill and clean Antares vending machines quickly. The service person will also waste as little time as possible at each location, with the hope that he can end up servicing more vending machines and thus collect more money. The commission system would be a win-win situation for the Antares business owner and the route person. If the owner and the route person are one and the same person, then there is no need of a commission system. It has been reported that most drivers are paid a commission for their service.

Furthermore, a commission system, in and of itself, will not teach an Antares route person how to schedule his route. The real key to improving route productivity is scheduling the route person to service a machine only after the Antares vending machine has made enough sales to profitably justify the cost of the service.

Whatever system an Antares operator comes up with, it is most important to keep track of how much the drivers are making and how well the business meets its productivity goals.

Antares Combined Operations

When the average Antares operator considers the possibility of acquiring a competitor, he thinks of buying a competitor in the same geographic market, then folding the operation into his existing company. If the plan is well conceived, and the buyer and seller can agree on realistic terms, then there can be many advantages for the buyer.

In a fold in scenario, the buyer improves his gross sales by simply adding the dollar volume of the seller’s company. In addition, he attempts to improve the bottom line by taking advantage of the cost savings that can take place when the Antares operations are combined in one facility. When the businesses are combined, you can cut down on a number of costs.

Economies of scale

Combined Antares operations will only require one purchasing function, one warehouse, one data processing function, one accounts payable, and one equipment maintenance function. If the seller can employ people to supervise these functions, then these costs can be eliminated.

There will be obvious savings to the buyer as well. This will include: lower costs for products, insurance and supplies, lower route support and vehicle costs and improved efficiency in all back of the house functions.

Combined Antares businesses will function with much less payroll than the total of the two payrolls when they run as separate businesses.

For all the reasons listed above, it is not unusual for the acquired portion of the Antares business to generate pre tax cash flows that are in excess of 25 percent for the buyer, as compared to a much more modest profit (or even loss) when it is operated by the seller as a stand alone business. Almost any size Antares operation can be successfully folded into an existing operation if the building is large enough. A well executed fold-in can be extremely profitable for your Antares business.

However, a buyer may also be willing to acquire a smaller operation under certain circumstances. For example, the buyer may feel that he needs a presence in the seller’s geographic market for strategic purposes. Or maybe the potential exists for quickly growing the Antares business through internal sales or the acquisition of additional operations in the area.