Vending Industry Challenges

Pricing is one of the important components of marketing mix. Price can make or break your business if not properly set. While setting the price of a product, there are several things that need to be considered. Few of them are demand of the product, target customers, targeted profit margin and competitors pricing strategy. The location in which you place your machine also influences its pricing. For instance if you place your machine in a middle class locality and price high, then there is every chance of decline in sales.

Vending is no doubt a great business but operators still face some challenges when it comes to changing prices. Even the slightest variation in prices can affect the overall profitability. While fixing prices, other factors like taxes, commissions, cost of good, equipment depreciation, spoilage and other overhead costs need to be considered. All these determine the profitability of an operator.

Operators need to monitor profitability across various locations and also consider the profit saving options. Raising prices may not be as easy as it may sound. Most customers resist price hikes in the initial stages but over a period of time they may accept it. This is true in relation to products that have regular demand. Customers have no option but to buy them even at the new price. Another profit saving option includes reducing commission, removing piece of equipment and increasing the frequency of servicing.

Before deciding on which method to adopt, operator needs to gather information about the sales and expenses pertaining to one particular location. Sometimes profits can be improved by improving the efficiency of vending machine. This might be easier when compared to increasing the price or concession in commission. You can relocate this machine to another location where it might work better. For more information you can also get in touch with Planet Antares support staff for any guidance or insight into this.

Several software packages are made available in the market that help you track your financials. However, operator needs to maintain accurate accounting books for implementing this software. These are some of the challenges faced by vending operators.