Industry, Technology

Visit Parlevel’s Booth at NAMA 2015

namaoneshow

NAMA 2015 in Vegas is coming up quickly! Don’t forget to stop by and visit with the Parlevel Crew at booth #1714 (right next to Automatic Merchandiser’s booth) for all your VMS needs or just to chat! Meet the team that keeps helps keep business running smoothly!

Our very own Alan Munson will be in the spotlight with several industry experts talking about what’s trending in vending. Don’t miss out on a great opportunity to learn from some the best in Vending!

Parlevel NAMA Schedule of Events

Weds, April 22

8:30-10:00am Tech Panel with Kasavana: What’s trending in Vending, Refreshment Services & Micro Markets

Gaining a competitive advantage in the marketplace almost always revolves around implementing an innovative, efficient and effective technology application. While there are many established core industry applications, there is also an emerging group of innovative techniques. Come learn about what technology is trending in the industry!

3:00-6:30pm Visit us at Booth #1714

Thurs, April 23

4:15-4:45pm A Candid Conversation About Vending Technology with Alan Munson: Leading Vending Operators Describe Their Experiences Using New VMS Technology To Improve Efficiency and Reduce Costs

11:00-5:00pm Visit us at Booth #1714

Friday, April 24

9:00-1:00pm Visit us at Booth #1714

We work every day to deliver innovative solutions that help operators revolutionize their vending machines, office coffee services and warehouse operations. We are dedicated to delivering powerful yet easy to use technology that provides operators with complete control and accountability of their business anywhere, anytime. We also backed our technology with unparalleled, expert support to ensure seamless implementation and transformative ROI.

We are looking forward to seeing you at the NAMA One Show!

Business Management, Technology

Reduce Waste & Increase Sales using the Vending Sweet Spot

The Vending Sweet Spot: Finding that PERFECT Product Mix

Every operator’s dream is to have machines with only one product left in the spindle or row when the driver comes to service. It means Debbie in Accounting found her favorite brand of trail mix and Joe in Receiving enjoyed his afternoon soda, both not having to worry about an empty slot. But most important, it means the operator knew the right number of the right product was the right machine; the perfect product mix.

It’s the secret sauce in vending. Sell just the right amount, but not enough for the machine to look empty. Sales are high, shrinkage is low, and drivers are busy keeping the machines full. But how do you get to this zen state of vending? What does it take to find the right product mix?

Know Your Customer

It all starts with knowing your customers at a client’s location. When you first sign on a new client, the best way to find out what the customers want is to take a simple survey. Find out what they like. Are they partial to particular types of chips? Do they like fresh items? Are healthy snacks high on their list?

You probably won’t be able to offer them everything on the survey, but it gives you a good idea of what they like and how popular that item is. These surveys help you order product and begin to set the machines up. Remember, you probably won’t get the mix right the first time, but that’s okay. Just be ready to be flexible as sales roll in.

Location, Location, Location

Another key factor in optimization is putting the right number of machines in the right location. While you probably won’t get to pick the locations, you can decide how many soda and snack machines will go in the location. But your client may decide that ‘out of the way break room’ is a part of the deal. So be ready to factor that into your planning.

Consistency is the key to sustainable sales and the best way to achieve it is with a planogram or a standard product layout. From spreadsheets to vending management solutions, keeping track of and seeing what product goes where helps not only in your planning, but with customers who typically are creatures of habit. Move those Cheetos and you probably will disrupt their day.

It’s All In the Pre-Kit

Before pre-kitting came along, most drivers had to load the truck with whatever product they thought might be moving. That usually meant more product on the truck than might be necessary. It also resulted in potential shrinkage when drivers had to get rid of stale product.

Not long ago, pre-kitting was introduced to the industry. Now operators can load tote boxes with smaller amounts of product, destined for specific locations. So how does pre-kitting factor into getting the right product mix?

Using a management solution with sales data and pre-kitting, an operator can tell exactly how well products are moving in the machines. Couple that with near real-time information from the machines and drivers can know exactly what to take to the location.

It’s All About the Data

If there’s one lesson operators can learn from the world’s largest retailer, it’s how important the data is in operations. Wal-Mart began years ago collecting data on its products, customers, and locations. In fact, there are studies surrounding “beer and baby diapers” theory that many attribute to Wally World.

But even though the story may not be entirely true, it does drive home a valuable lesson regarding data analytics. According to the article, “Companies can now think through how and what people buy and layout stores more efficiently.  They can offer coupons on items bought together, and have extra stock when demand is going to increase.”

Wal-Mart and other major retailers invest millions in data warehouses and the experts to explore them. With just some simple reports and tools a vending operator can learn about what and when customers are buying particular products. Add a little common sense and an operator can discover what is working and what is not.

Experimentation

Let’s go back to that first setup. After a few months, it would probably be a good time to look at the sales figures in the machines to see how products are moving. While it’s important to satisfy the customer, things can change. Debbie in Accounting may have switched to healthy snacks. People move around, join, or leave the company.

Looking at the data, you probably see products that either need changes to the par level or could be moved to another location. In some cases where products are selling out every time between servicing, it might be a good idea to add another spindle or slot.

That’s the beauty of leveraging a vending management solution (VMS). You get to experiment with product quantity and placement by leveraging the data and pre-kitting. But while it might be tempting to move products like pieces on a chessboard, remember that your customers are looking for consistency. They don’t like hunting for products every time they stop by for a snack.

Keeping Up With the Trends

Sometimes product demand changes based on the season or some event. Think about students on campus during finals week. Who doesn’t pull an all-nighter cramming for that test the next morning? That’s when a machine empty of energy drinks results in not only missed sales, but some unhappy customers.

Some people watch the Super Bowl just for the commercials. Knowing what products will be promoted can give you an edge with your sales. That funny chip commercial during the big game could lead to an uptick in chip sales the next week. Check out the commercials ahead of time, looking for products you might sell.

Another way is to watch the social media feeds for promotions. To help you out, we’ve started a Snack Vendors Twitter list you can subscribe to or bookmark that will be kept updated with more vendors.

To get ready for those periods, sometimes you have to alert your suppliers to make sure you have adequate product ahead of the competition. It’s the same strategy big retailers use to meet their customer’s demand.

Looking To the Future

Planograms or standard product layouts provided operators with more control of their vending operations, creating consistency based on experience. Pre-kitting has helped by reducing inventory to what is needed, instead of guessing. Real-time telemetry has given operators more visibility into actual sales, further optimizing routes.

But this is just the beginning. Layering demographic data onto your coverage map can offer more visibility into the needs of your customers. As big data continues to grow in the business world, having the ability to add these additional dimensions to the data can help give you better business intelligence and insight.

The Value of Automation

Vending used to be about operator experience and spreadsheets. Those years of driving the routes and getting to know your customers could not be matched. Spreadsheets came along and that experience could be captured. But it took a lot of work to really keep up with the numbers. Even worse was when you lost one of your experienced drivers.

Today, with vending management solutions, the data is captured for you automatically. The right reports on that data are built from the years of experience of operators. New tools for analyzing that information can help spot trends and exceptions.

 

 

Business Management

Vending Trends you can’t ignore in 2015

Vending machines have been around for decades, but that doesn’t mean the market is stable. Just with every other industry segment, changing technology and customer needs are driving innovation in the industry. So what should vending operators be keeping an eye on this coming year.

We sat down with Alan Munson, co-founder of Parlevel Systems, to talk about the top things to consider in 2015. He started by saying there aren’t that many things changing in vending, but the changes that are happening will have a big impact in the industry. Some of the topics he reviewed included mobile payments, micro markets, telemetry, and a look at how the industry is shaping out.

Mobile payments is an area that vending operators should be watching, especially with the introduction of Apple Pay towards the end of last year. Up until then, vendors like Payrange and Byndl offered mobile solutions outside of the card swipe environment. With Apple Pay and NFC, operators could integrate mobile payments using NFC-enabled swipe terminals, giving them more payment flexibility.

Apple_Pay_logo.svgBut with any new technology, customers need to be made aware of its availability and how to use it. Operators should make sure machines are labeled that take Apple Pay. The best locations are those with a younger demographic like college campuses.

One segment that came onto the scene a couple of years ago was micro markets. This is probably an area where vending operators can truly compete with convenience stores. “A lot of micro markets are popping up and innovating, driving the price down,” Munson said.

One segment he’s watching is creating a kiosk-less micro market, leveraging self-service and cashless payments. That alone can lower the cost of entry and allow more flexibility. But even with the potential of 30-35% more sales, micro markets do require closer management, both in product mix and performance.

Two technology trends that go hand in hand are telemetry and vending management solutions. While telemetry was on the rise in 2014, there is still plenty of room for growth this coming year. With costs dropping in terms of both hardware and network, Munson expects operators will connect more of their machines.

But telemetry alone doesn’t solve the problem. When those machines connect, they load their data to a vending management solution, which is where the real magic happens. The biggest benefit is in pre-kitting, where drivers know what their route needs are before even leaving the warehouse.

However, the real gold with telemetry and the software is in the analytics. “When I was an operator, we used to run commission spreadsheets. Now all that information can be in one application,” he said. “When you move to more informed operators, you begin to see where full control can be gained.”

To prepare for this onslaught of new data, you need to have the structures and processes in place to be ready to react to what the data is telling you, he said. Up to this point, the data may not have been presented in easily understandable formats, but that’s going to change.

Looking at the industry, Munson said that the past year saw several companies folded into larger ones, reducing the competitiveness of the market. Independent, medium sized operators are the real backbone of the industry, he said. Those operators provide more diversity of product offerings and sometimes better prices.

But to stay competitive, those operators will need technology to help them compete with the large companies. This is where Parlevel Systems plans to focus on during the coming year.

Click here to find out how ParLevel System’s can help you grow in 2015!

Technology

3 Easy Steps to Maximize Sales Using the 80/20 Rule

You’ve heard it before. 80% of your sales come from 20% of your machines, or customers, or products, or … you get the point. It’s called the Pareto Principle, but it’s really just about good common sense when providing great customer service. We are going to outline 3 simple steps to rapidly maximize sales utilizing the 80/20 rule in your vending operations today.

We all have our favorites and that fact applies to the vending industry as much as it does to our favorite burgers at fast food outlets or our favorite places to shop. But when you have to satisfy all your customers, how do you optimize your vending machines?

 

Three easy steps can help vending operators find that right mix of product for optimal sales.funny_pictures_holding-the-vending-machine-guy-hostage_16132

  1.  Know your customers

In most cases, it’s all about making sure you know your clients and their employees, students, or customers. It means looking at the locations and making sure you have the right number of machines where the traffic is most. One easy way is to create a survey for new customers to find out more about who they are and what they like. This is a great starting point to make the most out of your vending machines.

  1. Track machine performance

It also means stocking the right number of products in the machine and tracking how they sell. In the case of items with shorter shelf life, sometimes that means not completely filling a spindle or row. Then you can use that excess product in another machine or client. Software solutions are the best for tracking, but even a simple spreadsheet can do the trick.

  1. Optimize your re-stocking

Make sure you visit the machines when they need servicing. By keeping fast moving products stocked, that’s more opportunity to sell. An empty shelf doesn’t make you money. But this also means looking at low performing products and possibly experimenting with different positions or locations. Using the solution or spreadsheet, you can see how often you need to service a machine.

So how can you keep up with what sells and what doesn’t when you’ve got a lot of machines spread across multiple clients or locations?

In this day and age of data, vending management solutions are becoming the tool of choice when maximizing your sales and routes. By tracking sales as they happen and reporting those sales, operators can have a better handle on what is selling and what isn’t.

Not only can you follow the sales, but experimenting with new or different products offers less risk since the system can keep up with the numbers. Even if the client or a customer requests an item, using the numbers will let you put the right amount and avoid waste.

Business Management

Does your driver have these 4 critical traits to be successful?

A vending route driver is an integral part of the vending business. Without them, machines would not be serviced, customers will not be served, and money will not be made. From small to large vending companies, vending route drivers are the keys to success, so why would anyone want to hire a bad route driver?

The cost of hiring a bad employee can be tremendous, and normally, there is a negative return on investment, as shown in this infographic, once the employee is let go. However, beyond the financial cost of hiring a bad employee, there is a cost on the company and the team. As careerbuilder.com explains, having a bad employee is like a “cancer.” In the same manner as cancer spreads throughout the body, a bad employee spreads their negativity, incompetence, and backbiting and gives everyone a bad taste in their mouths. Keeping a bad employee around can severely hurt or destroy a business.

Hiring a bad route driver can eventually mean lost accounts, less machines serviced, and customers left with a bad taste in their mouths. It could also hurt other employees when they see that their hard work is treated the same way as the bad employee’s work.

However, good employees are not always easy to find. As one vendor told me, he averages about 1 out of 14 route drivers stay on in his business; the rest quit in one or two days or even longer, making business go bad. In order to prevent bad employees from festering in your business, here are some things to look out for when hiring route drivers.

1. Honesty

Most likely one of the most important traits a route driver must have is honesty. He or she will be dealing with vendors’ money on a daily basis, and most of the time, that money is not always tracked effectively. There are ways, without telemetry or a VMS, that a vendor could track the numbers, but they are very inefficient and time consuming. Beyond money, a vendor has to trust that the route driver will go to each location and fill the machines to their par levels and also talk with customers and take care of their needs in terms of refunds or service questions. The last thing a vendor wants is to be receiving phone calls from customers in their accounts complaining that machines have not been serviced or product has expired in the machines. An honest vending route driver would do their job in its fullest without stealing money.

2. Teamwork

I had a long conversation with a vendor about how teamwork really plays a part in a vending business. Even though route drivers are on their own 98% of the time they are working, they still serve as a part of a larger team. The money that they pull from the machines not only goes to the company, but also everyone working for that company. If a route driver has an expertise in car repair, for example, he or she can lend a hand when a truck breaks down. A vending business is not normally a segregated workplace; people help each other out because they are all working together for the same goal, the advancement of the business. Route drivers should have this sense about them in order to be an asset to the organization.

3. Merchandising/Retail Experience

Why is it that people flock to Apple Stores? Why do people purchase so many products from large box stores, like Wal Mart? If products look great, people are more attracted to them and are more likely to purchase them. I spoke with a vendor who told me that one of his route drivers was a manager of a pharmacy, and he turned a route that did not make much money to the most profitable route in the company. All it took was servicing the machines at the proper times and making the products look good in the machine. Making sure that the expiration dates are in full view, for example, give customers a good sense of security when they are making their purchases. If the route driver does his or her job well, the products will not reach their expiration date, and customers will have positive experiences at the vending machine.

4. Competency

There are a couple of things route drivers must know how to do well in order to be successful at their jobs. For example, they have to have great customer service skills, be able to drive a truck or cargo van, able to lift a certain amount of weight, able to stock a vending machine quickly, able to work the technology in vending machines, etc. However, a truly competent route driver is someone with a great deal of endurance and perseverance. During my time as a route driver, I had to run in the rain with a dolly full of product, lift dozens of cases of sodas while my wrists were hurt, and even when my day was going poorly, I had to give my customers a smile and care for their needs. It is a physically demanding job, and it must be done quickly and efficiently in order to achieve the best results. Vendors should look for behaviors in the potential route driver’s history that show that he or she demonstrates critical competencies.

These are four important qualities potential route drivers must have in order to be successful and an asset to the company. Great route drivers make a huge difference in a vending business, as any vendor would tell you. Looking for more information on the vending industry? Check back on our blog for the latest info you need to run your vending business better.

Have any more ideas on what qualities make great route drivers? Share them in the comments section or engage us on Facebook or Twitter.

Business Management, Industry

The Opportunities in Non-Traditional Vending

 

In a recent article by Emily Refermat of Vending Market Watch, she talks about non-traditional vending as a potential side business or a new business model for vendors. However, the response she has received from people in the vending industry was mostly negative towards the idea of reconfiguring vending machines and selling things that are not snacks or drinks. We, however, believe there is potential in this type of vending business.

There are vendors out there who have made a successful business through non-traditional vending. Fastenal, for example, has installed more than 8,400 new machines in the first six months of 2013. Output Night Club in a partnership with The Monocle Order have found success with vending machines that dispense sunglasses at night clubs on New York roofs. 24 Hour Florist dispenses flowers from local flower shops for people who cannot reach the brick and mortar shops. Even companies like MedBox, which safely vends prescription medication, have found success, finding a solution to a problem like having too many employees people deal with sensitive drugs.

To make non-traditional vending work, there has to be a need that can be fulfilled from a vending machine, obviously. Discovering that need takes some creative thinking and looking for things people sometimes forget they need or want to do. For example, Green Aid developed bulk vending machines that sell “seedbombs,” a combination of clay, compost, and seeds. What people can do with these seedbombs is throw them in areas where there is “too much grey,” like in sidewalk cracks, empty lots, or other derelict urban sites. The idea is to transform ugly areas into areas worth caring for and looking at. This fulfills a need that most people would not think about, caring for the environment in which they live. There are machines all over the US and Europe, and the seedbombs have been thrown all over the world. There are many other ideas people can come up with in order to make non-traditional vending work for them and their community.

Another thing that makes non-traditional vending work is that it has to be surprising, like something you would not expect in a vending machine. For example, a German entrepreneur named Thomas Geissler got the idea of dispensing gold from vending machines. When people think of vending machines, they do not think of them dispensing gold. This business idea has made Geissler very successful, and gold dispensing vending machines have been popping up all over the world. They use the Internet to keep the gold prices up-to-date and fair, according to their website. Vending machines like these get people’s attention, but it also generates sales because the idea makes sense for a certain group of people who want to create wealth with gold.

Non-traditional vending can work even for vendors who have done traditional vending for most of their career. I spoke with my friend from Chow Time Vending, and he told me about how he leveraged the account location to increase his sales by providing a need for his customers. He had a great account at a local college, but the school had asked him if he wanted to vend laundry supplies for the students. He was able to find a supplier, got the laundry supplies for cheap, and sold them at a great profit without needing to give commission to the school. This not only improved the relationship he had with the school, but it made him a lot of money in the process.

Non-traditional vending can work; the opportunities just need to be identified and taken. It may not work for every vendor, but for those entrepreneurial vendors who want to continue making money, solidify relationships with accounts, and try something different, non-traditional vending is the way to go.

Have you ever thought about non-traditional vending? Let us know in the comments and share your story!

Company Culture

The Beginners Guide to Company Culture in Vending

Company culture, or the way a company behaves, manages, and communicates with their employees and customers, is a big topic of discussion for people looking for jobs they can enjoy and companies looking for excellent people to hire. In this series of blogs, I will feature some helpful resources for people to find out their perfect fit and how vending companies can use this information to make their organizations better.

There is not a lot of talk that I have heard of within the vending industry when it comes to company culture. There could be a number of reasons why that is, but I am not here to speculate. I assert that considering company culture and trying to find people that fit with that culture is important to keep an organization running and a business growing. According to an infographic produced by Resoomay, a software company that has made an easy way for people to be interviewed and screened remotely using video, the cost of having a bad employee in an organization is high. For vendors, a bad employee could be one who steals money from you, is dishonest, or is reckless with your assets, among other things that could damage your business and cost you money.

Therefore, being able to understand people before you hire them and see how they fit in an organization can not only make working in vending better, but it can also save thousands of dollars over time.

For the first of this series of blogs, I want to introduce a service that I use often and am very excited about: Good.co.

With Good.co, all it takes is to take a simple quiz with less than 20 questions. Afterwards, the system will measure your personality based on your answers and give you a result. Most people will be a mixture of personality profiles, such as “Socialite,” “Inventor,” or “Strategist.” You can check out mine here:

Using archetypes to define your personality, Good.co then explains in further detail what it all means and how you prefer to work with others. For example, as a “Humanitarian,” I enjoy helping others and encouraging them. As a “Caretaker,” I am compassionate with my team, and as an “Advocate,” I strongly support others and thrive in a close knit team. This all explains why I enjoy working in my current place of work, ParLevel Systems.

After spending some time reading about your results, you can take a different test to get the personality of your employer. Good.co measures your “FitScore” with your employer or company. Are you not liking your current job, or are you finding that the job is really satisfying? The FitScore can help shed some light on why things are going poorly or well at your job, and it can also help determine the best way people can work together.

For the vending industry, this would work great for vendors looking to hire people for their company. It gives them a means to measure their culture and the personalities of those looking to be hired by the company. It can make working in vending that much sweeter knowing that the people around you all are working toward the same goal.

The best part about all of this is that it is very easy to use. You can start with a free Good.co account by simply logging on to the website and using the code “ParLevel” (without quotations). Anyone you want to have use this website can also use the code “ParLevel,” and you can immediately see the results.

When you go to Good.co, look at the top right hand corner of the screen. You should see this button. Once you press it, type in your email address and the code “ParLevel.”

email address entry

From there, Good.co will walk you through the process, and you can start measuring your personality, how well you fit with others, and how people fit with your company.

Many thanks to the people at Good.co for providing us with this offer code and chance for the vending industry to try out something amazing!

Business Management, Technology

Cash Accountability

employee theft

A vending machine can last from 20 to 30 years or more if maintained properly. This makes it difficult for vendors to accept new innovations in vending machine technology into their businesses without incurring large upfront costs. This is why having a vending management system (VMS) from ParLevel can update your machines and give you the intelligence necessary to maximize profit in your business.

For this series of blogs, we will be discussing the benefits of a VMS for you to have a better understanding of how using our system can make your business much more efficient and profitable. To begin with, we will discuss how a VMS can give you cash accountability like never before.

Vending is a cash business for the most part. With people carrying less cash than before, there has been a movement towards cashless payments, but many vending machines do not have credit card readers.

Therefore, when machines are serviced, the drivers take the cash from the machines and report how much has been earned. This gives drivers a large opportunity to steal. They can take a handful of coins or a few dollar bills from the machines or even go as far as stocking the machines with their own product and reporting that the machine is not selling.

Vendors have to put a lot of trust in their drivers to deliver all of the money earned on each machine because there is no way for vendors to know how much money is in their machines beforehand. With a VMS, cash accountability becomes a reality.

A VMS offers real time updates on when products are being sold and how much money will be in every machine. Before drivers go out on their routes, vendors can see how much money they should be expecting by the end of the day. If there are any discrepancies, that will be a red flag on the driver.

With ParLevel, this information is stored in the cloud, giving the vendor a chance to access the information securely from any computer, smartphone, or tablet.

Our VMS takes away all of the guesswork in a vendor’s business and gives vendors true cash accountability. Employee theft will be significantly reduced if not eliminated.

Since a VMS can inform vendors how much and when their vending machines are selling, for our next blog post, we will discuss how VMS can also inform vendors on when their machines break down.

Business Management, Equipment, Technology

Breakdown Alerts

Broken Machine

 

Alan is a vending machine owner with over 300 machines in two cities. He has a number of different routes that he takes each week to service those machines. Almost every time he goes out to service his machines, there is always a machine that has broken down in one way or another.

Alan does not know how long his machines have been down, but he notices that there are fewer dollars in the machine than the last time he serviced it, and it is mostly stocked with product that is about to expire. A number of customers come to him and talk to him about how the machine had been broken for a while and want their money back.

Vendors, like Alan, are rarely notified when a machine breaks down; they only find out when they are told by someone in the location or find the machine broken when on their routes. Whatever money that could have been earned is lost, and customers are less likely to use those machines again because they found it broken before.

Vending machines break down; there is no escaping that. However, with a vending management system (VMS) from ParLevel, vendors will know when their machines are not working or if something is going wrong. They can act much more quickly and proactively instead of hoping the machines are working properly when they go to service them. All it takes for this to happen is our ParLevel box and our software, which can be accessed from anywhere.

The ParLevel Box connects the vending machine to our online VMS, allowing vendors to check the status of their machines anywhere they are. When the hardware reads that something has gone wrong with the machine, the message is sent to vendors immediately. With our software, we can inform vendors what has been broken and what parts are necessary to fix it. In this manner, the next time a driver goes to service the machine or if vendors will have someone else fix machines on a specific route, there is enough information to bring the correct parts and estimate how long the repair will last.

This service offers more than just peace of mind; it offers vendors a chance to act quickly and decisively to avoid any lost product and profit due to broken machines. It also offers the opportunity to keep more customers because machines will be more reliable to vendors when they are not broken for extended periods of time. With vending management, everyone wins.

Now that we have discussed how remote management can help with informing vendors on the status of their machines, for our next blog, we will discuss how a vending management system can help vendors make informed economic decisions when it comes to inventory control.

Business Management, Inventory Management

Inventory Control

inventory control

A vendor’s inventory is the core of their business. Every snack, drink, DVD, toy, etc. are all potential revenue or inventory loss. Maintaining inventory efficiently and knowing when to purchase and how much are very difficult. Also, it is often risky to introduce new product because tracking sales accurately is difficult.

In the last blog post, we talked about Alan’s issues with broken machines. Alan, like many other vendors, also has issues with tracking his inventory. For example, in 2012, he spent over $20,000 on product that was never sold and expired. It is difficult to say if this number is common or smaller compared to other vendors, but $20,000 is a substantial amount of money to have lost, especially when dealing with the profit margins vendors have in the industry.

A vending management system (VMS) prevents such a loss and offers opportunity for vendors, like Alan, to be more efficient in their inventory management.

The VMS will inform vendors what they need to buy and when to buy it. Based on previous sales and how quickly product is sold through machines, the VMS software will anticipate when vendors need to restock on certain product at the best time. Instead of finding out that a product is low when needing to restock machines, the software can place orders for vendors if they wish or create a printable “shopping list” for vendors to take with them when they go to make inventory purchases.

The VMS will also allow vendors to purchase the best selling products to maximize revenue. The system will inform vendors what people are buying not only from their machines, but also from machines other vendors have planted in similar locations, such as offices, malls, parks, etc. This way, vendors will know that they will need to keep more of a certain product stocked in a machine and less of the other products, saving money and earning money because more people can purchase the better selling products.

Vendors will be protected from having a large percent of their inventory from expiration because their product is strategically purchased and sold without suffering as much loss. This prevents situations like Alan’s situation last year when he lost a large amount of product because he had purchased too much inventory.

With buying the right products and knowing where to put them, vendors now need less inventory space to sustain their operations. This leaves room for expansion or the ability to save money on a smaller warehouse. With a smaller overhead, vendors worry less about the cost of doing business and can hire less employees for inventory. All of this translates to more money for the business.

Inventory management is essential in running a vending business, and with a vending management system, there are less mistakes made and more money saved.

Going along the same lines as inventory management, for our next blog, we will discuss how a vending management system benefits merchandising for vendors.