Challenges Faced By Vending Business
All the four P’s of marketing mix are very sensitive even to the slightest fluctuations in the market. Even a small change in them can make or break your business. For instance when it comes to setting price of a product, you need to consider your target customers, profit margin and even your competitors pricing and their strategy. The location in which you place your machine also influences its pricing.
Vending is undoubtedly a very profitable business but this does not mean that operating this business is very easy. Operators do face major 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.
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.
For more information and knowledge about the vending business, get in touch with Planet Antares staff.
Labels: planet antares, planet antares vending
posted by Karola Marx @ 8:25 AM
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