Automatic Merchandiser

OCT 2012

Automatic Merchandiser serves the business management, marketing, technology and product information needs of its readers including vending operators, coffee service operators, product brokers, and product and equipment distributors in print.

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C O V E R ST O R Y: O P E R A T I O N PR O F I L E Eric Bone, left, the dedicated micro market driver, inspects a micro market location with Mike Pearce, the com- pany's Avanti manager. Matt Pierce, left, route manager, and Tim Dicker, operations manager, inspect the machines at a location. is about one hour equidistant from Phoenix to the north and Tucson to the South. And while they didn't have vending experience, they knew the importance of hav- ing a professional appearance. They invested in uniforms and literature, and approached prospective accounts as if they were already an established company. "We acted like a big company from the get go," Van Hazel said. "We looked like a professional vending company." Stooks already had a success- ful track record in sales at Coke, and getting accounts did not prove too difficult. Many vending accounts were dissatisfied with the service they were getting from the existing providers. Arizona: a unique vending market Arizona has always been a unique vending market since there are not a lot of large industrial accounts that typi- cally form the customer base of large vending operations. The market has long been domi- nated by small operators, many of which are retirees. Once Stooks, Van Hazel and Walton got an account, they bought the equipment, installed it and began providing service. Beverage machines were a "no brainer" since the bottlers provide them for free. But snack machines were a different story. Focusing on cost, they first tried used snack machines, which proved a mistake. "It was a nightmare," Van Hazel said, in reference to servicing used equipment. "We were naïve. We jumped in without looking." They immediately began buy- ing new equipment from the local Automatic Products, ltd. distribu- tor. The new equipment cost more money but saved many service calls. After six months, sales were sufficient enough to justify a 1,500 square-foot warehouse for the young and growing company. After one year, with 50 accounts, they hired a full-time driver. Only one account, an auto parts dealer, wanted cold food and hot beverages. After installing and ser- vicing the cold food and hot bever- age machines, the partners decided it was not the business they wanted to be in. However, larger accounts still wanted food and hot beverages, so they looked for alternative ways to meet this demand. Instead of cold food machines, they offered frozen food machines. Van Hazel said most customers who want food can be convinced to accept a frozen machine, which also offers ice cream. Instead of hot beverage machines, they offered countertop coffee brew- ers, an offering that eventually grew into a separate OCS division. Machine planograms early on Being newcomers to vending, the partners did not follow established C ONT INUED ▶ '' The office coffee business is really what has kept us profitable. '' October 2012 VendingMarketWatch.com Automatic Merchandiser 19

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