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Vending Machine 2006 Census Numbers

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Published: 03Dec2009
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The 2006 Vending Times reported their vending census findings; they reported that the largest segment of the vending industry, the vending machine segment grossed forty six billion, eight hundred and twenty million dollars.

They also report that the coin operated amusement segment of the vending industry grossed six billion, two hundred and eighteen million dollars.

Are these numbers accurate? NO! Here is the reason why; Vending Times census relies on vending companies filling out their little census card that is placed in their publication. So lets examine why this is a flawed report.

Key reasons Vending Times (VT) Census is flawed:

• Eighty seven percent of the total vending companies in the U.S. are mom and pop operations with 500 or less machines in the field and employee four or less people.

• Vending is an all cash business; therefore not all vending companies report 100% of their earnings.

• Some vending companies operate without sales tax ID numbers and do not file taxes of any kind.

• If a vendor does not buy a county vending sticker, they are not put on the state sales tax roles unless they file their sales taxes they are not counted.

• Only a small portion of the total vending industry subscribes to VT.

• Not all of the subscribers to VT fill out the census card.

• Vendors that do fill out the VT census card often under report their gross sales.

• Many vendors buy used or refurbished vending machines with cash.

• Over 80% of all route software packages have what is referred to as the “R-Factor” (the reduction factor) imbedded in their systems; this allows vending companies to run two sets of books and under report gross sales to their clients.

My vending management company does everything possible to assure our clients that our 3rd party vendors do accurate reporting. Monitoring our vendor’s monthly gross sales was not an easy task before the DEX system was rolled out in 1889. Since that date ALL quality vending machines have the DEX system; that means all you have to do is open the machine’s door and push in a series of numbers on the machines key pad, this action allows you to check gross sales and unit sales per selection and combined gross sales and units sold for the entire machine.

What is a DEX system? The DEX system is the machine’s hard-drive; this little gem starts complying data that can be translated into dozens and dozens of reports the instant the machine is plugged in and doesn’t stop unless the circuit board goes down. The DEX system will tell you if a machines door was left unlatched, how many miss-vends a machine performs, the date and time of each miss-vend and sale, what denomination of coinage and paper money was deposited for each and every selection/sale, how many pieces were sold from each selection and how much money each selection grossed in sales every minute of every day. The system also has to different accounting systems; a perpetual system that cannot be set back and a thirty day system that can be set back at the beginning of every month. The only way the perpetual system can be wiped clean is if you replace the circuit board with a new one.

So when we assign one of our locations to a 3rd party vendor we take the DEX meter readings for each of the machines being placed in that location; we then enter those numbers into our computer program and we give a copy to our contact person at the location the machines were place in for their commission records. This makes it impossible for vending companies doing business under our banner with our clients to under report gross sales; therefore they cannot under pay our joint clients monthly commissions.

I’m sure you now understand why we estimate that the annual VT census is deeply flawed and under reported.

Jimmy has a long history of success and solutions in the vending industry. His books on vending, restaurants, corporate credit building and small business incorporation sold on e Business Media Online are from real life vending machine route experiences and successes, not from bulk vending or arm chair theory. He is one of the few authors of e books that puts his money where his mouth is by giving away Free books at http://www.vendingforprofit.net .

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