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C O VE R ST O R Y :
S M A R T VE N D I N G
in the vending machines. After all, the vending machine is simply a distribution channel. For example, at a hospital my
company services, we installed cashless acceptors. I decided to take two of the 40 items and con- vert to non-food items. I bought iPhone/iPod charger kits and head- phones and placed them in two separate slots. My thinking was that anyone
who wanted a snack would still purchase from any of the other 38 slots. But at a hospital, people may often come and forget their head- phone or charger. We priced these two slots at $12.50 each. Again, I knew that no one would have purchased these items with cash. But with cashless, they can. I fi gured I could watch the sales of these two items, and
at minimum, whatever they sold would be purely incremental sales. These two items soon accounted for one-third of the machine's sales by dollar volume! And even better,
could use during a picnic. We converted one entire shelf to items like water guns, sunscreen, hand wipes, etc. The water guns cost me 50 cents a piece (two per pack of
THESE two items soon accounted
for one-third of the machine's sales by dollar volume!
my margin on the items was signifi - cantly higher than on food items. I was paying $2.75 and selling for $12.50. Think about that! That price was almost fi ve times cost. Another account was a park.
For that, I went to the dollar store and bought things I thought people
$1.00, but we sold them individu- ally), and I priced them at $2.50 each. I fi gured no parent would buy just one water gun, so I priced it at $2.50 so they could get two for $5. My cost is 50 cents, but I again am charging fi ve times cost.
C ONT INUED ▶
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Automatic Merchandiser VendingMarketWatch.com April 2012
