A very actual topic in forums is a tactical mistake of novice businessmen: having heard a lot about the super-business, they importunately purchase 10-20 machines at once, and after that they face the problem of their location...

A very actual topic in forums is a tactical mistake of novice businessmen: having heard a lot about the super-business, they importunately purchase 10-20 machines at once (as it’s cheaper to buy at wholesale prices), and after that they face the problem of their location, so the equipment is standing idle for some time. During the first months of vending machine exploitation we constantly have to change its location in search of more profitable places, but idle time extends payback period, and if the equipment is bought on credit or leased – the operator has to pay banking percents for idle, not working machines. Packaged vending machines are staying in garages and sheds, and bought beforehand stuff is also staying there (you are lucky in case it is not a food stuff, or it has a long shelf life). As a result the novice businessman can lose competitive spirit and face the following problems:

- he has to sell the equipment and give up vending;

- he has in a short space of time to find locators - people to help him in building his vending machine route;

Below we’ll discuss rather a prosperous trend of vending – people, professionally dealing with vending machine locating.

In many countries a large number of companies offer vending locator services. Every second company, selling gumball machines, finds it necessary to promise to locate your machines in high traffic areas dirt-cheep on condition you buy equipment from their company.

Professional locators of vending machines can be individuals as well as companies. And various participants of vending industry have different points of view on them. Vending old-timers, who began with several mechanical bulk vendors, and then proceeded to electrons, are sure that the operator is capable of finding a good location for his machines himself (in case he is a good specialist , and has a business streak), coming to an agreement and formalizing all documents. If you pay on average $50 (for locating one bulk machine) and $300-500 (for locating an electronic machine), then you could spend too much money on professional locator service, and in the end it will extend the pay back period very much.

On the contrary, locator companies (rather respectable ones) are anxious to attract clients and they assure that the latter should make use of their service. They give a number of reasons, among them: if the place is not profitable – we relocate your machine free of charge (profitability criteria are stipulated).

Another company refutes: “Don’t believe if somebody promises you to relocate your machine free of charge. But we’ll do it at half price. We will relocate your machine at half price until you’re fully content with the place. We’ll pick a profitable form of work with the place (lease, free installing as a service, commission, charity).

Some locator companies (as well as producers) always have the so called “singers” – the clients content with the work of their company, who grew rich having availed themselves the offer of the company. These “singers” will praise the company highly, make an excursion on the route determined beforehand, shake hands with the content vending machine owners. Beginners are under impression, but professionals brick up their ears.

The companies, producing or selling vending machines, describe in general the process of seeking a locator company, preventing from swindlers an non-professionals. And as we noticed, their recommendations depend on the type of the vending machine they offered. For instance, the company, manufacturing and selling modern electron snack machines, advises:

“A locator company must necessarily demonstrate you the installed machines at work – not just on the photo or in the advertising catalogue, but visiting the working place of your choice. If the company has no vending machines installed and serviced by it – turn tall and run. Show interest, what kind of machines the company locates. It is important for you to get to know, if the company has positive experience in locating exactly your type of equipment (for example, electronic, with transparent front doors, vending the definite stuff in particular). If the locator company suggests purchasing and installing just mechanical machines – leave it. Professional locators don’t deal with mechanical equipment”.

Launching business, modern American businessmen very often don’t even try working on their own and resort to locator services. Thus, if we turn to vending boards and forums, we could find messages like: I’m looking for a locator in such a state, we need to locate so many machines. Certainly, it is a defect rather than advantage, as the businessman doesn’t gain his own experience, and actually his business is just on paper. Soon such “businessmen” will hire people for continual services of their network – that means they will become figure heads. In such state of affairs the owner doesn’t have the possibility of following the money transactions, actual profits and losses (the papers submitted for putting his signature may contain unreal figures), and the main thing is that the machines’ owner is not learning to be an operator, isn’t going deeply “inside vending” and fully relies upon other people’s experience.

Turnkey business or full service business programs are just for those who doesn’t like to move much in work. The services are often suggested to pensioners, amassed some money and thinking over its investment, or to working people, who has no possibility (mainly time) to carry on vending business, but has desire for extra income. Full service business, as the same experienced locators see it, - is absolute nonsense: you buy the equipment, some company locates it in the places you bought, then installs, loads fully with the stuff, does a sample purchase in your presence, gives you a pile of papers and promotional materials, and after that solemnly passes you the keys to your vending machines – you becomes a businessman. Then the company will service, refill, repair, clean the machines – anything whatever you like, you only must pay. According to calculations of operators, there is nothing in work of service companies that the machines’ owner was unable to do by himself – but overpayment is considerable.

Nevertheless, in spite of skepticism of professional operators, they have to admit that in some cases locator services are useful and even necessary. It is impossible to manage without locators in case you need to install a large number of machines (e.g. 30) in a short period of time (e.g. within a week). Imagine how much time it would take the beginner a) to find a suitable outlet on a suitable route; b) come to an agreement with the authorized person, rightly and favorably, c) prepare and sign necessary papers (in each case to find a convenient form of work ); d) calculate the volume of goods necessary for beginning the business; e) again create a positive image of the vending machine in the point of sales, answer endless questions. It’s better the operator saved his nerves and time and committed everything to a professional.

It would be useful for a novice businessman to walk for a while with the locator and study his methods of work, but not every locator would agree to share his knowledge. In this case the operator has no choice but study everything through locator’s paper reports.

A locator will install your gumball machine in the place you need: in the hotel, beauty parlor, canteen, pizzeria, hairdresser’s, service center, cycle shop, laundry, inn, school, sanatorium, children’s hospital etc. Why do we choose these kinds of places? The reason is that in these places people often have to wait, and while waiting they usually don’t mind having a bite, drinking a cup of coffee or chocolate.

In addition to all the professional skills, referred above, a locator mustn’t be a stranger in the area – that means in case of a big city, a locator must know a city dwellers’ psychology, and a trade outlet owners’ psychology. In case of a small town, a locator must be suitable: he must have delicate approach to people of a small town, take into account their income, their attitude to innovations like vending machines, their attitude to new business trends etc. That’s why locator companies in the USA show off that their locators are local residents of the region you what to locate your equipment in, who knows cultural, social, demographic and other peculiarities of the area. This way they emphasize the large size of the company’s locator net.