Everything I Learned in Business I Learned Running My Concession Business

Mar 30 2013

I know what you’re thinking.  “How in the hell does he have time to run a concession business?”  It started about 15 years ago.  Stocking a business with candy, chips and pop on a weekly basis. I wasn’t in the vending business but there was an employee of our business that had a side business stocking fresh fruit in convenient stores and next thing I knew I had bought two machines and I had a route.   I thought it would be fun, could buy a few machines on ebay, get a concession license,  and would make enough money that I could pay for the machines, could pay for my drinks and lunches all week for a little bit of work.  Eventually it grew to a bit more giving me a little extra spending money.  Now it goes straight to my daughters college fund. But I have never had any desire to do more.  It’s a pretty simple business.  I buy snacks, put them in a machines and on racks and keep them full.  I do it once or twice a week and it takes about 1.5 to 2 hours a week including buying the product.  I do it for one reason.  I enjoy it and it pays well enough for me to keep doing it.   Here are ten things I’ve learned over the years for the little business.

1. It’s not what the buyer likes, its what sells.  I would never eat half of the junk people buy.  The candy bars I enjoy are not the best sellers.  What I like or dislike has no impact at all on how I stock the machines.  It’s not like politics.  You actually have to cater to your customers not vote based on what you like and dislike

2. You can’t beat the prices of the shopping clubs like CostCo and Sam’s.  They simply have the best prices of anyone, including wholesalers.  I buy all my stuff at Sam’s Club and it’s 40% cheaper that ordering it from a snack supply company.  And that’s after paying for my time and gas.  Americans take for granted how much money they are saving by having these suppliers.

3.  Water is the biggest money maker of everything in the store aka you are being ripped off.   A case of Aquifina (the best selling for me) is $5 for 30.  I am super cheap at 50 cents (most charge $.75 or $1 each) and I still make $10 a case.  The amusement parks and venues that sell it for $3 are making incredible margins.

4. Americans have terrible eating habits.  I have tried to put healthier foods out and the simply don’t sell.  They want candy bars, chips, and cinnamon rolls.  People will by three or four things, a can of pop, and call it a lunch.

5.  Pop is a loss leader for grocery stores.   Sam’s club pop is more expensive than a grocery store.  Why? Because they won’t lose money on any item and if they matched the grocers they would.  A case of Coke or Pepsi cost the retailer more than $5 yet often you can buy a case for $5 or $6 dollars.  That is why there is usually a limit of 2 or 4.  Fountain syrup on the other hand is dirt cheap.   12 ounces of soda cost approx. 13 cents to make

6.  You learn very quickly that people are attached to brands.  Off brands absolutely do not sell. You have to stick with the big chip and pop names if you want to sell.

7.  There are so many brands and different varieties of snacks that it’s actually a very tough decision which ones to carry.  Diet this, cherry that. Cool ranch, pretzels. I can see how competitive it is for store shelves.  I have only so many vending slots and I’m always trying new things and analyzing sales but you can’t have everything.  I basically have one pop slot and three snacks to try new.  It’s actually not enough money to make it worth the thought I put into it but it’s like a game to me.  Most of what I do is not measured in money but in success.  Money is just how I keep score

8.  Lowering price to sell more does not usually work.  I have experimented with pricing and if I lower the price I may sell more but when I add it up I would have made more money if I just kept it the same.  Sales should be measured in profit dollars not sales or units sold

9.  I’m pretty sure every business that takes change is not declaring a lot of income on their taxes.  Laundry mats, car washes, vending machines.  Almost impossible to track.  I’m probably not perfect as well.  I probably do a much better job than most guys.  I really don’t feel like getting fined or in tax trouble for few thousand dollars so I track it the best I can.  But I have to admit it’s tough.  You find yourself dumping all the cash into a jar and counting later (or taking it to a change machine at the bank)  because counting takes more time than the stocking

10.  I am a hypocrite.  Deep inside I think overweight people are lazy and selfish.  I feel like they don’t care enough about themselves or the people that rely on them to keep their health in check.  They aren’t willing to put in the work or self constraint necessary to give them a better chance of being here in the future.  And then I sell them the worst possible food in the world.

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Outsmarting the Dumb, Outworking the Smart

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  1. RJ

    thanks for sharing…very interesting. I do think that there are regional differences in snack choices. I worked on wall street and we had snack machines in the banks with high end healthy choices / luna bars, baked chips, pita chips etc seemed to sell better than the snickers etc

  2. DeliveryMaker.

    Mostly its down to cost, the cheaper stuff is often more high in sugar or more high in salt, you can buy healthier food but its generally more expensive – the manufacturer targets his market and locations.

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