Bulk vending
Encyclopedia
Bulk vending is the sale of unsorted confections, nut
s, gumball
s, toy
s and novelties
(in capsules) selected at random and dispensed generally through non-electrically operated vending machine
s. Bulk vending is a separate segment of the vending industry from full line vending
— i.e., the snack and soda vending industries — and involves different products and strategies. Bulk vending represents less than 1% of the total vending industry.
before they became popular in the United States
. In the early 1880s, the first commercial coin operated vender was introduced in London
and stocked with postcard
s. In 1888, the Thomas Adams Gum Co. introduced bulk venders to America, using the machines to sell Tutti frutti
gum on elevated subway platforms in New York City
. In 1897, the Pulver Manufacturing Company added animated figures to its gum machines. In 1907, the round candy coated gumball, a staple product in modern vending machines, was introducedhttp://www.gameroomantiques.com/HistoryGum.htm. In 1909, Emerson A. Bolen formed the Northwestern Novelty Company, selling the Yankee, a penny matchstick vending machine; Bolen's company is now one of the most prominent bulk vending machine manufacturers. In 1913, Ford Mason leased 102 machines and placed them in stores and shops of communities in western New York
State; he would eventually found the Ford Gum & Machine Company
, an empire of over 500,000 vending machineshttp://www.fordgum.com/about_us.aspx. In 1948, Oak Manufacturing
opened its doors; it would become one of the largest equipment manufacturers in the industry. In 1949, Roger C. Folz purchased his first vending machine; Folz Vending
was the largest operator of bulk vending equipment in the United States, owning and operating over 150,000 machines nationwidehttp://www.folzvending.com/index.cfm?npageid=6 at their peak.
In 1950, the United States Treasury Department attempted to impose gambling
excise taxes on bulk vendors on the grounds that there was no way for consumers to know for sure which gumball or other product the machine would dispense. For a short time, manufacturers installed viewfinders in bulk vending machines to display the next item to be vended. Vendors organized to found the National Bulk Vendors Association
(NBVA), which successfully lobbied against the taxes, arguing that the items vended were of approximate or equivalent value. The NBVA has since lobbied on behalf of bulk vendors on a variety of issues; for instance, it joined the Coin Coalition
which pushed for elimination of the U.S. one dollar bill in favor of the United States dollar coin
.
photographs, for instance, may end up with several duplicates; hence, the introduction of "trading cards" and similarly themed products, with the idea that consumers will trade the duplicates with one another.
es, such as accounting, income tax
ation, liability insurance
, and so on, also apply to bulk vending. On the other hand, some aspects, such as fixed cost
s and required seed money
, are quite different from most start-ups.
s, for instance, can be purchased in bulk for 2 cents apiece and sold for 25 cents. In addition, the machines are typically inexpensive compared to soda or snack machines. Both the machines and product are relatively portable, and the machines are easier to service than in other types of vending. A lot of machine designs are driven only by gravity and the mechanical energy supplied by turning the handle, so they can be installed and used in areas without an electricity supply. In many states, bulk vendors are exempt from sales tax
. Bulk vending may be a practical choice for an individual simultaneously working a full time job, because many venues that host bulk vending machines, such as retailers and restaurants, are open on weekends and during evening hours.
The business is susceptible to inflation
because product costs rise higher than prices customers are willing to pay. Many bulk candy vending mechanisms are not equipped to accommodate price increases, unlike electronic machines. Locations often do not see a compelling need to have a bulk candy machine. Moreover, because locations know the machines are easily portable, it is not uncommon for bulk vendors to get kicked out of a location.
Vendors generally report that about 1-4% of their machines disappear annually, a problem exacerbated by the fact that machines are usually located close to store entrances, where they are easy to steal. Locations inside existing businesses can be in peril if the business goes bankrupt or evicted from rented premises. Machines have been known to be seized or liquidated by the host businesses' creditors, before the rightful owner has a chance to retrieve them.
Bulk vending machines are susceptible to fraud
. Unlike other vending machines, most bulk vending machines do not read coins' "metallic signature," and a worthless token of the same size as a coin (e.g. a wooden nickel
or a washer
) can, in most cases, operate a bulk vending machine equally as well as a coin can.
Northwestern Corporation (established 1909), Oak Manufacturing
(established 1948) and Beaver Machine Corporation (established 1963) are generally regarded in the vending community as companies that sell high-quality bulk candy machines.
The ideal color of the machine may depend on the clientele. In retail locations frequented by children, an eye-catching red or yellow may be best. Chinese restaurant
s, for instance, typically favor red. In offices where adults are the customers, a more subdued blue, grey, silver, or black may be better. If a location has a color coordination, it may be good to keep with the color coordination.
Stands mostly come in two colors, black and chrome. Chrome has a tendency to rust when exposed to moisture from mopped floors, humidity, etc. Black stands suffer from the same problems, but can be repainted with inexpensive black gloss spray paint more cheaply than chrome stands can be rechromed.
Sticker adhesive can be removed from machines by applying lighter fluid
and then rinsing with dish soap. To find out what cleaners work best on a particular machine, it may be good to keep a machine in the house and try everything on it to see what works. There are products that can remove scratches from canisters, for instance.
The best choice of machine type largely depends on location. A gimmicky machine, such as one that has flashing lights following a gumball down a spiral, is better suited to shopping mall
s and other locations with many new customers visiting who are unfamiliar with the machine (and thus have not become jaded about it). For most locations, a simple single- or double-head stand is sufficient. In some high-traffic locations, a four selection machine is the best but can cause product to go stale in a location with fewer sales.
Machines with separate heads are the ones most commonly encountered. Grocery stores, malls, and laundromats may have stands with a half-dozen or more separate head machines. Most of them have a large presentation area and allow the product to be seen from all angles, and therefore are more eye-catching than triple machines. Gumballs and toys sell well from these machines. Oak seems to specialize in separate head machines, although Northwestern also sells reputable separate head machines. Beaver Machine Corporation sells attractive separate head machines that are durable and last for years and years. Most experienced vendors recommend buying single- and double-head machines new , since they usually only cost $50–75 per head.
Triple-selection machines have had some success in office settings, where the target customers are adults. An advantage of triple-selection machines over stands with separate heads is that they are quicker to service because one key opens the whole machine. Moreover, most triple selection machines have a spill tray, which can help prevent store owners from becoming annoyed at having to sweep up spilled candy. A disadvantage is that the presentation area is smaller than with a globe or panel head, and customers cannot see all products from all angles. In addition, three choices of candy are not always necessary, and may result in spoilage if one product moves slowly.
as well as mail-order wholesale outfits.
Some food products sold from bulk vending machines include:
Some non-food products include:
The type of products suitable for a location depends on the potential customers. Toys sell well among children, and sometimes adolescents. Some vendors have reported high sales of doggy treats at veterinary offices when they used the SPCA
as a charity. The type of products that will sell well is always somewhat unpredictable, and can change as particular customers' tastes change or as they start or stop frequenting the location.
More so than in other types of vending, the operator should take customers' requests for specific candy with a grain of salt. Sometimes customers will recommend unusual items, but when the item is stocked, sales will be poor. In addition, certain products are not vendible. Gummi bears and similar soft, squishy candies, for instance, will jam the machine.
When a product does not sell well at a location, vendors may move the product to another location to see if it sells better there. This is an advantage to having more than one location. When trying a new product, it may also be helpful to start out with a small bag, instead of ordering a whole case, in case it does not sell.
According to the 2007 annual Census of the Industry compiled by Vending Times, here are the number of machines, average annual revenue, and average per machine for these different types of machines for 2006:
A bulk candy vendor is constantly having to seek new locations as accounts turn over. A company's regional manager may visit a branch, for instance, and decide that he doesn't like the bulk candy machine. Or a competing operator may offer the owner a better commission. The prime locations are fiercely fought over, and operators may need to pay as much as 50% to the store owner in order to keep a high volume location. It usually takes about 300 locations for an operator to live solely on bulk candy profits.
According to Bryon Krug's Vending Business-in-a-Box, certain factors can make a location more profitable for a bulk vendor:
The presence of a few individuals who each buy a few handfuls of candy a day can dramatically improve sales. Because it is hard to know in advance where these candy lovers may be, usually the only way to find out the profitability of a location is to place a machine and see what happens. Another consideration in finding locations may be a desire to create a "tight route," seeking locations in the same geographical area in order to improve efficiency in servicing them.
Nut (fruit)
A nut is a hard-shelled fruit of some plants having an indehiscent seed. While a wide variety of dried seeds and fruits are called nuts in English, only a certain number of them are considered by biologists to be true nuts...
s, gumball
Gumball
Gumball may refer to:*A ball made of bubblegum often dispensed from a gumball machine*Gumball , a video game for the Apple released in 1983 by Broderbund Software*Gumball , an alternative rock band from the 1990s...
s, toy
Toy
A toy is any object that can be used for play. Toys are associated commonly with children and pets. Playing with toys is often thought to be an enjoyable means of training the young for life in human society. Different materials are used to make toys enjoyable and cuddly to both young and old...
s and novelties
Novelties
A novelty item is a small manufactured adornment, especially a personal adornment.- Novelty item :This term covers a range of small manufactured goods, such as*antiques*collectables*chocolates*esoterica*executive toys*gadgets*tools and implements...
(in capsules) selected at random and dispensed generally through non-electrically operated vending machine
Vending machine
A vending machine is a machine which dispenses items such as snacks, beverages, alcohol, cigarettes, lottery tickets, consumer products and even gold and gems to customers automatically, after the customer inserts currency or credit into the machine....
s. Bulk vending is a separate segment of the vending industry from full line vending
Full line vending
A Full-line vending business uses vending machines to sell cans or bottles of soft drink and individual packages of snacks. Soda sold is usually 12 fl. oz. and 20 oz. in North America, or 330ml and 500ml in Europe. Snacks, bags of chips and similar edibles are usually about 1-3 oz.-Trends:In the...
— i.e., the snack and soda vending industries — and involves different products and strategies. Bulk vending represents less than 1% of the total vending industry.
History
Bulk vending dates back at least to the late 19th century. Vending machines were widely used in EuropeEurope
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
before they became popular in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. In the early 1880s, the first commercial coin operated vender was introduced in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
and stocked with postcard
Postcard
A postcard or post card is a rectangular piece of thick paper or thin cardboard intended for writing and mailing without an envelope....
s. In 1888, the Thomas Adams Gum Co. introduced bulk venders to America, using the machines to sell Tutti frutti
Tutti frutti
Tutti frutti may refer to:-Food and drink:*Tutti frutti , a confection containing a variety of chopped fruits and/or flavors-Music:...
gum on elevated subway platforms in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
. In 1897, the Pulver Manufacturing Company added animated figures to its gum machines. In 1907, the round candy coated gumball, a staple product in modern vending machines, was introducedhttp://www.gameroomantiques.com/HistoryGum.htm. In 1909, Emerson A. Bolen formed the Northwestern Novelty Company, selling the Yankee, a penny matchstick vending machine; Bolen's company is now one of the most prominent bulk vending machine manufacturers. In 1913, Ford Mason leased 102 machines and placed them in stores and shops of communities in western New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
State; he would eventually found the Ford Gum & Machine Company
Ford Gum
Ford Gum is a brand of bubble gum and chewing gum often found in gum machines. It is produced by Ford Gum & Machine Co. The history of the company goes back to 1913, when Ford Mason leased 102 machines and placed them in stores and shops in New York...
, an empire of over 500,000 vending machineshttp://www.fordgum.com/about_us.aspx. In 1948, Oak Manufacturing
Oak Manufacturing
Oak Manufacturing, founded in 1948, is a vending machine company located in Vernon, California. Along with Northwestern Corporation, it is regarded by most people in the vending community as a producer of high-quality equipment....
opened its doors; it would become one of the largest equipment manufacturers in the industry. In 1949, Roger C. Folz purchased his first vending machine; Folz Vending
Folz Vending
Folz Vending is the largest bulk vending company in the United States. The company was founded by brothers Harold J. Folz and Roger C. Folz in 1949. Today, Folz Vending owns and operates 150,000 machines throughout United States and has sales in excess of $55 million dollars....
was the largest operator of bulk vending equipment in the United States, owning and operating over 150,000 machines nationwidehttp://www.folzvending.com/index.cfm?npageid=6 at their peak.
In 1950, the United States Treasury Department attempted to impose gambling
Gambling
Gambling is the wagering of money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods...
excise taxes on bulk vendors on the grounds that there was no way for consumers to know for sure which gumball or other product the machine would dispense. For a short time, manufacturers installed viewfinders in bulk vending machines to display the next item to be vended. Vendors organized to found the National Bulk Vendors Association
National Bulk Vendors Association
The National Bulk Vendors Association is a nonprofit trade association of bulk vendors, founded in 1950. The NBVA lobbies for legislation that will help bulk vendors; for instance, NBVA worked through the Coin Coalition to support the United States dollar coin....
(NBVA), which successfully lobbied against the taxes, arguing that the items vended were of approximate or equivalent value. The NBVA has since lobbied on behalf of bulk vendors on a variety of issues; for instance, it joined the Coin Coalition
Coin Coalition
The Coin Coalition is an organization supporting the elimination of pennies and dollar bills from U.S. currency. It is funded by vending machine companies, video arcade owners, and the soft drink industry, who all have an interest in eliminating maintenance costs associated with dollar bill...
which pushed for elimination of the U.S. one dollar bill in favor of the United States dollar coin
United States dollar coin
Dollar coins have been minted in the United States in gold, silver, and base metal versions. The term silver dollar is often used for any large white metal coin issued by the United States with a face value of one dollar, although purists insist that a dollar is not silver unless it contains some...
.
From the consumer's perspective
Operation of bulk vending equipment is usually fairly straightforward for the consumer, involving placing the appropriate coin or coins in the machine and turning a knob or pulling a lever. If candy in a machine is low, however, and it appears unevenly distributed, the customer may wish to rock or whack the machine in order to knock some candy into the candy wheel, which is located in the bottom of the canister in the center. Depending on the design of the machine, though – which usually involves a wheel making a one-third turn with every vend – it may already be too late to ensure that the next vend bears fruit. A distinguishing feature of bulk vending is that the items are dispensed at random, so it is usually impossible to choose which item comes out of the machine next. A child trying to get a complete set of Britney SpearsBritney Spears
Britney Jean Spears is an American recording artist and entertainer. Born in McComb, Mississippi, and raised in Kentwood, Louisiana, Spears began performing as a child, landing acting roles in stage productions and television shows. She signed with Jive Records in 1997 and released her debut album...
photographs, for instance, may end up with several duplicates; hence, the introduction of "trading cards" and similarly themed products, with the idea that consumers will trade the duplicates with one another.
Advantages and disadvantages of bulk vending
Bulk vending is a hands-on business requiring research and planning, as well as sales ability and investment of time, to be successful. Many of the same considerations that apply to other small businessSmall business
A small business is a business that is privately owned and operated, with a small number of employees and relatively low volume of sales. Small businesses are normally privately owned corporations, partnerships, or sole proprietorships...
es, such as accounting, income tax
Income tax
An income tax is a tax levied on the income of individuals or businesses . Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate...
ation, liability insurance
Liability insurance
Liability insurance is a part of the general insurance system of risk financing to protect the purchaser from the risks of liabilities imposed by lawsuits and similar claims. It protects the insured in the event he or she is sued for claims that come within the coverage of the insurance policy...
, and so on, also apply to bulk vending. On the other hand, some aspects, such as fixed cost
Fixed cost
In economics, fixed costs are business expenses that are not dependent on the level of goods or services produced by the business. They tend to be time-related, such as salaries or rents being paid per month, and are often referred to as overhead costs...
s and required seed money
Seed money
Seed money, sometimes known as seed funding, friends and family funding or angel funding , is a securities offering whereby one or more parties that have some connection to a new enterprise invest the funds necessary to start the business so that it has enough funds to sustain itself for a period...
, are quite different from most start-ups.
Advantages of bulk vending
The gross margins in the bulk candy business can be quite high – gumballGumball
Gumball may refer to:*A ball made of bubblegum often dispensed from a gumball machine*Gumball , a video game for the Apple released in 1983 by Broderbund Software*Gumball , an alternative rock band from the 1990s...
s, for instance, can be purchased in bulk for 2 cents apiece and sold for 25 cents. In addition, the machines are typically inexpensive compared to soda or snack machines. Both the machines and product are relatively portable, and the machines are easier to service than in other types of vending. A lot of machine designs are driven only by gravity and the mechanical energy supplied by turning the handle, so they can be installed and used in areas without an electricity supply. In many states, bulk vendors are exempt from sales tax
Sales tax
A sales tax is a tax, usually paid by the consumer at the point of purchase, itemized separately from the base price, for certain goods and services. The tax amount is usually calculated by applying a percentage rate to the taxable price of a sale....
. Bulk vending may be a practical choice for an individual simultaneously working a full time job, because many venues that host bulk vending machines, such as retailers and restaurants, are open on weekends and during evening hours.
Disadvantages of bulk vending
Initially, the cost of insurance for a beginning operation may be cost prohibitive. Consequently, many beginning operators do not carry liability insurance on their machines. Complicating the situation is that there are limited companies which offer insurance for Bulk Vendors.The business is susceptible to inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
because product costs rise higher than prices customers are willing to pay. Many bulk candy vending mechanisms are not equipped to accommodate price increases, unlike electronic machines. Locations often do not see a compelling need to have a bulk candy machine. Moreover, because locations know the machines are easily portable, it is not uncommon for bulk vendors to get kicked out of a location.
Vendors generally report that about 1-4% of their machines disappear annually, a problem exacerbated by the fact that machines are usually located close to store entrances, where they are easy to steal. Locations inside existing businesses can be in peril if the business goes bankrupt or evicted from rented premises. Machines have been known to be seized or liquidated by the host businesses' creditors, before the rightful owner has a chance to retrieve them.
Bulk vending machines are susceptible to fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
. Unlike other vending machines, most bulk vending machines do not read coins' "metallic signature," and a worthless token of the same size as a coin (e.g. a wooden nickel
Wooden nickel
A wooden nickel, in the United States, is a wood token coin, which are usually issued by a merchant or bank as a promotion, sometimes redeemable for a specific item such as a drink. Wooden nickels were most commonly issued in the U.S. in the 1930s, after the Great Depression...
or a washer
Washer (hardware)
A washer is a thin plate with a hole that is normally used to distribute the load of a threaded fastener, such as a screw or nut. Other uses are as a spacer, spring , wear pad, preload indicating device, locking device, and to reduce vibration...
) can, in most cases, operate a bulk vending machine equally as well as a coin can.
General considerations
Vendors have a wide variety of machines to choose from. The selection of a machine is important because it can affect sales, time spent servicing the machine, willingness of locations to allow placement of the machine, and a variety of other factors affecting overall profits. Like a car, once a vending machine is placed in service, its resale value drops dramatically. This is especially true for machines that were overpriced to begin with.Northwestern Corporation (established 1909), Oak Manufacturing
Oak Manufacturing
Oak Manufacturing, founded in 1948, is a vending machine company located in Vernon, California. Along with Northwestern Corporation, it is regarded by most people in the vending community as a producer of high-quality equipment....
(established 1948) and Beaver Machine Corporation (established 1963) are generally regarded in the vending community as companies that sell high-quality bulk candy machines.
The ideal color of the machine may depend on the clientele. In retail locations frequented by children, an eye-catching red or yellow may be best. Chinese restaurant
Chinese cuisine
Chinese cuisine is any of several styles originating in the regions of China, some of which have become highly popular in other parts of the world – from Asia to the Americas, Australia, Western Europe and Southern Africa...
s, for instance, typically favor red. In offices where adults are the customers, a more subdued blue, grey, silver, or black may be better. If a location has a color coordination, it may be good to keep with the color coordination.
Stands mostly come in two colors, black and chrome. Chrome has a tendency to rust when exposed to moisture from mopped floors, humidity, etc. Black stands suffer from the same problems, but can be repainted with inexpensive black gloss spray paint more cheaply than chrome stands can be rechromed.
Sticker adhesive can be removed from machines by applying lighter fluid
Naphtha
Naphtha normally refers to a number of different flammable liquid mixtures of hydrocarbons, i.e., a component of natural gas condensate or a distillation product from petroleum, coal tar or peat boiling in a certain range and containing certain hydrocarbons. It is a broad term covering among the...
and then rinsing with dish soap. To find out what cleaners work best on a particular machine, it may be good to keep a machine in the house and try everything on it to see what works. There are products that can remove scratches from canisters, for instance.
Machine types
Shopping mall
A shopping mall, shopping centre, shopping arcade, shopping precinct or simply mall is one or more buildings forming a complex of shops representing merchandisers, with interconnecting walkways enabling visitors to easily walk from unit to unit, along with a parking area — a modern, indoor version...
s and other locations with many new customers visiting who are unfamiliar with the machine (and thus have not become jaded about it). For most locations, a simple single- or double-head stand is sufficient. In some high-traffic locations, a four selection machine is the best but can cause product to go stale in a location with fewer sales.
Separate head machines
Machines with separate heads are the ones most commonly encountered. Grocery stores, malls, and laundromats may have stands with a half-dozen or more separate head machines. Most of them have a large presentation area and allow the product to be seen from all angles, and therefore are more eye-catching than triple machines. Gumballs and toys sell well from these machines. Oak seems to specialize in separate head machines, although Northwestern also sells reputable separate head machines. Beaver Machine Corporation sells attractive separate head machines that are durable and last for years and years. Most experienced vendors recommend buying single- and double-head machines new , since they usually only cost $50–75 per head.
Triple machines
Triple-selection machines have had some success in office settings, where the target customers are adults. An advantage of triple-selection machines over stands with separate heads is that they are quicker to service because one key opens the whole machine. Moreover, most triple selection machines have a spill tray, which can help prevent store owners from becoming annoyed at having to sweep up spilled candy. A disadvantage is that the presentation area is smaller than with a globe or panel head, and customers cannot see all products from all angles. In addition, three choices of candy are not always necessary, and may result in spoilage if one product moves slowly.
Parts
- Merchandise wheel: There are many different types of wheels available. A deep dish candy wheel, for instance, vends more candy than a shallow candy wheel. Candy wheels can also be adjusted to dispense different amounts of product. Capsule wheels and gumball wheels are used to vend capsules and gumballs, respectively. For gumballs, a two-for-one wheel can be used to give customers more product for their money.
- Stirrer or agitator: A stirrer can be installed to prevent candy from becoming unevenly distributed. In the absence of a stirrer, as more and more vends take place, the product will tend to become unevenly distributed, assuming a funnel shape as it drains out through the center. When the center of the canister becomes empty, the product will stop falling into the wheel and the machine will accept money without dispensing any product. This can lead to customers getting angry if the canister appears full from the front. Especially in locations such as break rooms where business depends on repeat customers, if word gets around that the machine has been taking people's money, it could lead to a dropoff in sales or the operator getting kicked out of the location.
- Lock: Quality machines almost always come with quality locks such as Chicago Lock Co.Chicago LockChicago Lock Co. is a lock manufacturer, founded in Chicago in 1920. Since 1933, it has sold a tubular lock marketed under the registered trademark "Ace." Millions of Ace locks have been sold; for instance, these locks are used in Northwestern Corporation's Triple Play bulk vending...
's Ace Locks. The Vendesign 4in1 Carousel is unique insofar as it has two separate locking coin boxes. - Coin mechanism: Metal coin mechanisms last longer than plastic ones and can take more abuse without breaking.
- Fall through mechanism: A fall through mechanism allows tokens, foreign coins, wrong denomination coins, slugs, and so on, to fall through into the cash box, rather than getting stuck and causing lost sales. Oak Manufacturing Co. invented the fall through mechanism.
Products
Bulk candy and other products can be obtained cheaply from wholesale stores such as Sam's ClubSam's Club
Sam's Club is a chain of membership-only retail warehouse clubs owned and operated by Wal-Mart Stores, Inc., founded in 1983 and named after Wal-Mart founder Sam Walton. , the Sam's Club chain serves more than 47 million U.S. members...
as well as mail-order wholesale outfits.
Some food products sold from bulk vending machines include:
- Peanut M&M'sM&M'sM&M's are dragée-like "colorful button-shaped candies" produced by Mars, Incorporated...
, one of the best sellers, but relatively expensive and vulnerable to cracking and melting if temperature varies greatly. Shielding them from sunlight can prolong their life. Peanut M&M's usually sell slightly better than their plain counterparts. - Reese's PiecesReese's PiecesReese's Pieces are a peanut butter flavored candy manufactured by The Hershey Company for the North American market; they are also available in Ireland & The United Kingdom. They are circular in shape and covered in candy shells that are colored either yellow, orange, or brown. They can be...
, another good seller that is cheaper than M&Ms. - Skittles, which have OK sales but last a long time before going bad.
- Mike and Ikes and Hot TamalesHot TamalesHot Tamales are a cinnamon candy manufactured by the Just Born.They are shaped like Mike and Ike candies and were introduced in 1950.In addition to the hot and spicy flavor, there is also Hot Tamales Fire which is more intense than the original, a darker red in color, and less opaque.A spearmint...
, also a good seller, degrade in humid environments. Spraying a large plastic spoon with an unflavored, non-stick cooking sprayCooking sprayCooking spray is a spray form of an oil as a lubricant, lecithin as an emulsifier, and a propellant such as food-grade alcohol, nitrous oxide, carbon dioxide or propane. Cooking spray is applied to frying pans and other cookware to prevent food from sticking. Traditionally, cooks used butter,...
and then stirring the candy around until it has a shiny look to it can prevent the pieces from sticking together. It is important not to use too much cooking spray, or the candy will seem greasy. - RuntsRuntsRunts are hard candies sold by Nestlé under their Willy Wonka Candy Company brand. First seen on the market in 1982, they are fruit flavored candies in the shape of their respective fruits...
, a hard fruity candy, are well-suited to surviving hot, humid summer months. - GumballGumballGumball may refer to:*A ball made of bubblegum often dispensed from a gumball machine*Gumball , a video game for the Apple released in 1983 by Broderbund Software*Gumball , an alternative rock band from the 1990s...
s and chicleChicleManilkara chicle is a tropical evergreen tree native to Mexico and Central America. The tree ranges from Veracruz in Mexico south to Atlántico in Colombia...
s, a classic seller that can last for two years or more. Bubble gum sells well to children, while chewing gum sells better to adults. Dubble BubbleDubble BubbleDubble Bubble is a brand of bubble gum invented in 1928 by Philadelphia-based Fleer. Walter E. Diemer — an accountant at Fleer — enjoyed experimenting with recipes during his free time. In an interview a few years before his death, he said, "It was an accident"...
is reported to be a lower quality gum than Ford GumFord GumFord Gum is a brand of bubble gum and chewing gum often found in gum machines. It is produced by Ford Gum & Machine Co. The history of the company goes back to 1913, when Ford Mason leased 102 machines and placed them in stores and shops in New York...
and other brands. Gumballs sell best in machines by themselves, as opposed to being an option in a triple-selection machine. Gum is likely to become more popular among adults as more workplaces become smoke-free. - PeanutPeanutThe peanut, or groundnut , is a species in the legume or "bean" family , so it is not a nut. The peanut was probably first cultivated in the valleys of Peru. It is an annual herbaceous plant growing tall...
s, cashewCashewThe cashew is a tree in the family Anacardiaceae. Its English name derives from the Portuguese name for the fruit of the cashew tree, caju, which in turn derives from the indigenous Tupi name, acajú. It is now widely grown in tropical climates for its cashew nuts and cashew apples.-Etymology:The...
s and other oil-containing nuts, which usually can only last a few months before going bad. Brazil nutBrazil NutThe Brazil nut is a South American tree in the family Lecythidaceae, and also the name of the tree's commercially harvested edible seed.- Order :...
s may need to be broken into two pieces to avoid jamming the mechanism. - Trail mixTrail MixTrail mix is a combination of dried fruit, grains, nuts, and sometimes chocolate, developed as a snack food to be taken along on outdoor hikes....
, which reportedly sells well in locations frequented by truck drivers, but otherwise generally sells poorly. Trail mix is as perishable as the nuts it contains. An abundance of fruit that has a lot of pectinPectinPectin is a structural heteropolysaccharide contained in the primary cell walls of terrestrial plants. It was first isolated and described in 1825 by Henri Braconnot...
(i.e. it is sticky when moist) may tend to stick together and prevent the machine from vending. The solution is to coat the mix so that it won't be so gummy. With certain Wal-Mart varieties of trail mix, for instance, the raisins are coated with a fine salt powder which keeps them from sticking. The cranberries are dried, but additionally the skin helps to keep them from sticking. In the case of trail mix with fruit that has a lot of the flesh exposed, one might try a fine popcorn salt. Powdered sugarPowdered sugarPowdered sugar, also known as confectioners' sugar or icing sugar, is very fine sugar. When intended for home use, it typically contains a small amount of anti-caking agent....
is likely to gum up as well. The only other commonly available food item would probably be corn starch, but it is questionable whether it would impart a flavorable taste. Moreover, stirrers will tend to crush the raisins and make them stick, causing everything to mush together. - Chocolate covered raisins are a vendible product, but heat will turn the product white.
- Jelly beanJelly beanJelly beans are a small bean-shaped type of confectionery with a hard candy shell and a gummy interior which come in a wide variety of flavors. The confection is primarily made of sugar.-History:...
s, such as Jelly BellyJelly BellyThe Jelly Belly Candy, or simply Jelly Belly, is the maker of The Jelly Belly and other candy, formerly known as The Herman Goelitz Candy Company...
gourmet jelly beans, are a vendible product, but the product costs can be rather high for premium brands.
Some non-food products include:
- Bouncy ballBouncy ballA bouncy ball, power ball or super ball is a popular polybutadiene rubber toy ball which rebounds proportionally to the amount of force used when thrown at a hard surface. The first such ball was the proprietary Super Ball. The Sky Ball is an example of another bouncy ball...
s, a classic toy that can, however, cause choking if customers mistake one for a gumball. - Cheap jewelry, which sells well among children looking for inexpensive accessories.
- ToyToyA toy is any object that can be used for play. Toys are associated commonly with children and pets. Playing with toys is often thought to be an enjoyable means of training the young for life in human society. Different materials are used to make toys enjoyable and cuddly to both young and old...
s (e.g. large diceDiceA die is a small throwable object with multiple resting positions, used for generating random numbers...
and miniature Rubik's CubeRubik's CubeRubik's Cube is a 3-D mechanical puzzle invented in 1974 by Hungarian sculptor and professor of architecture Ernő Rubik.Originally called the "Magic Cube", the puzzle was licensed by Rubik to be sold by Ideal Toy Corp. in 1980 and won the German Game of the Year special award for Best Puzzle that...
knockoffs) inside vendible capsules. - StickerStickerA sticker is a type of a piece of paper or plastic, adhesive, sticky on one side, and usually with a design on the other. They can be used for decoration, depending on the situation. They can come in many different shapes, sizes and colours and are put on things such as lunchboxes, in children's...
s (e.g. holographic, glow-in-the-dark, etc.) - Temporary TattooTemporary tattooA Temporary Tattoo is a non-permanent image on the skin resembling a true tattoo. Temporary tattoos can be drawn, painted, or airbrushed, as a form of body painting, but most of the time these tattoos are transferred to the skin. Temporary tattoos of any kind are used for numerous purposes...
s - Figurines, including licensed figurines of Spider-Man, etc. and non-licensed figurines
- Licensed collectables
- Electronics Accessories, like screen cleaners
The type of products suitable for a location depends on the potential customers. Toys sell well among children, and sometimes adolescents. Some vendors have reported high sales of doggy treats at veterinary offices when they used the SPCA
American Society for the Prevention of Cruelty to Animals
The American Society for the Prevention of Cruelty to Animals is a non-profit organization dedicated to preventing cruelty towards animals...
as a charity. The type of products that will sell well is always somewhat unpredictable, and can change as particular customers' tastes change or as they start or stop frequenting the location.
More so than in other types of vending, the operator should take customers' requests for specific candy with a grain of salt. Sometimes customers will recommend unusual items, but when the item is stocked, sales will be poor. In addition, certain products are not vendible. Gummi bears and similar soft, squishy candies, for instance, will jam the machine.
When a product does not sell well at a location, vendors may move the product to another location to see if it sells better there. This is an advantage to having more than one location. When trying a new product, it may also be helpful to start out with a small bag, instead of ordering a whole case, in case it does not sell.
According to the 2007 annual Census of the Industry compiled by Vending Times, here are the number of machines, average annual revenue, and average per machine for these different types of machines for 2006:
| Type of machine | Number of machines | Average annual revenue | Average per machine |
|---|---|---|---|
| Capsule Venders | 692,000 | $178,536,000 | $258 |
| Novelty Capsule Venders | 13,000 | $5,135,000 | $395 |
| Nut/Pan Candy Vender | 413,000 | $85,078,000 | $202 |
| Ball Gum Vender | 911,000 | $110,231,000 | $121 |
| Flat Vending - Stickers & Temporary Tattoos | 185,850 | $36,960,000 | $176 |
Locations
A bulk candy vendor must be willing to act as a salesman in order to persuade businesses to allow location of machines. Since managers are busy, he must be able to state his case concisely and close the sale effectively. Even experienced vendors often report a high rejection rate, on the order of 9 out of 10. Many operators donate a percentage of the profits to charity so that locations will allow them to place the machines for free; others pay the location a commission.A bulk candy vendor is constantly having to seek new locations as accounts turn over. A company's regional manager may visit a branch, for instance, and decide that he doesn't like the bulk candy machine. Or a competing operator may offer the owner a better commission. The prime locations are fiercely fought over, and operators may need to pay as much as 50% to the store owner in order to keep a high volume location. It usually takes about 300 locations for an operator to live solely on bulk candy profits.
According to Bryon Krug's Vending Business-in-a-Box, certain factors can make a location more profitable for a bulk vendor:
- Long hours of operation (e.g. a 24-hour restaurantRestaurantA restaurant is an establishment which prepares and serves food and drink to customers in return for money. Meals are generally served and eaten on premises, but many restaurants also offer take-out and food delivery services...
) - Large numbers of customers who will pass by (e.g. a busy retailRetailRetail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...
store) - People waiting for the business to complete something (e.g. waiting to be seated, waiting for a car's oil to be changed, etc.)
- Lots of children (e.g. a recreation center)
- Hungry people (e.g. a restaurant)
- People present who have quarters on them (e.g. a laundromat)
- No other bulk candy machines at the location
- A large number of people working at the same time of day with no other sources of food (e.g. an officeOfficeAn office is generally a room or other area in which people work, but may also denote a position within an organization with specific duties attached to it ; the latter is in fact an earlier usage, office as place originally referring to the location of one's duty. When used as an adjective, the...
).
The presence of a few individuals who each buy a few handfuls of candy a day can dramatically improve sales. Because it is hard to know in advance where these candy lovers may be, usually the only way to find out the profitability of a location is to place a machine and see what happens. Another consideration in finding locations may be a desire to create a "tight route," seeking locations in the same geographical area in order to improve efficiency in servicing them.