Automatic Age

Issue: 1937 May

AUTOMATIC AGE
12
M ay, 1937
4 By Hubert F. Messe
U -------------Li
T UH A T DOES the future hold in
store for the coin machine in­
dustry? That is the question that is
on the lips of manufacturers, distrib­
utors, jobbers, and operators alike.
Each year many old timers drop
from the ranks while just as many,
if not more, new faces are welcomed
into the industry. An important rea­
son for so many men dropping by
the wayside is their lack of faith in
the coin machine industry. Nothing
can be accomplished with lack of
confidence. Above all, believe in the
business you are in and 60% of the
battle is won. Steady yourself to
survive adversities. All businesses
have their trying periods and peak
times. This industry is no exception.
Manufacturers have turned out ma­
chines that have been losers and cost
them a small fortune.
Does this
mean they should become discour­
aged? Absolutely not!
The coin
machine industry is too gigantic in
scope to let one hard blow knock
it out. Probably the next ma­
chine this manufacturer introduces
will be a sensational success that will
much more than pay up the losses of
his former failure-
Operators too, must not lose faith.
The operator who has the courage
to stand up in the face of the many
difficulties he has to encounter is the
operator who will win out in the end.
Every man and woman connected
with the coin machine industry in
any way whatsoever is on the ground
floor of an industry gigantic in scope,
that is still in its infancy.
There is a real demand for auto­
matic merchandising all over the
United States. Clerks who are no
more than automatons are joining
labor organizations and demanding
higher wages.
A coin controlled
vending machine would be more effi­
cient from a store proprietor’s point
of view because there is no chance
of labor trouble or petty thieves, and
most important, exhorbitant wages
are eliminated. If one chain grocery
or 5 & 10 cent store were to operate
one automatic unit as a test they
would probably be gratified with the
results and our manufacturers would
be kept humming keeping up with
the orders that would result.
It
stands to reason that the manufact­
urers in business today would be
called upon to construct these auto­
matic stores because of their valuable
knowledge of slug problems, mech­
anical difficulties, etc.
Operators reading this article might
say, “That’s all fine for the manu­
facturer; but where do we come in?”
With the popular acceptance of coin
controlled merchandising, complete
recognition of our industry will fol­
low. Unfair legislation and taxation
will be a thing of the past. Promi­
nent hotels, theatres, high class clubs,
all will be ready with open arms to
allow the operation of coin machines
in their establishments. New ingen­
ious amusement devices probably
costing many thousands of dollars
per unit will be constructed and the
public will wonder and marvel at the
genius in back of their manufacture.
The coin machine industry will rise
above the petty problems we now
face and the men and women that
will cash in on this trend will be the
ones who have successfully withstood
the bitter conditions that some of us
are forced to cope with. Above all
have faith. You have chosen this
field for your means of making a
livelihood.
Your choice has been
wise. The coin machine industry is
second to none in the possibilities of
a prominent future that it has to
offer.
* * * * *
Each month more people turn
to the possibilities of the vending
machine business. A certain propor­
tion are amusement machine oper­
ators without any previous experience
in the operation of venders. A few
words about commissions might be
timely and well in order for their
benefit and for the benefit of the
vending machine branch of the in­
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dustry. Business will be better for
all concerned if newcomers avoid ser­
ious mistakes.
Vending machine commissions must
be figured in a much different man­
ner than amusement machine com­
missions.
They are determined by
cost of merchandise, operating costs,
reasonable profit margin and estab­
lished standards of selling price. An
amusement machine does not sell
merchandise but entertainment. It
costs an operator no more to install
and service a machine that takes in
$5.00 a day than one that only takes
in 25c a day. However, vending ma­
chines are different. Each customer
must receive full value in merchan­
dise for each coin inserted. There­
fore a machine that takes in $1.00 a
day costs much more to operate than
one that takes in 25c. The vending
machine must return a margin of
profit for each coin inserted. The
commission rate must be the same
for a busy machine as for the less
patronized ones even though the
more a machine sells the more the
operator makes.
A pretty well established rate of
commission is 20% of the gross sales.
O f course this figure can be increased
or decreased depending upon the cost
of merchandise. The adjusting of
portions vended would probably take
care of any difference in the price
between different vending commod­
ities.
Most operators in the vending ma­
chine field are seasoned business men.
They have been forced to consider and
master such business fundamentals
as sound profit margins, retirement
of investments, depreciation, replace­
ment of equipment, overhead and
maintainance costs, and systematic
bookkeeping. The vending machine
operators can well set a good exam­
ple for men operating amusement
machines. If they followed in the
vending men’s footsteps the exhorbi­
tant rates of commission and cut­
throat competition would cease.
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AUTOMATIC AGE
M ay, 1937
13
Now is the Time to Assert Our Industry
By Arthur W. Luchs
HOUSE divided against itself
cannot stand.” It was Abraham
Lincoln who spoke those words in the
trying period of Civil W ar days. It
was the rallying cry of the times and
the focal point of his plan to main­
tain the Union at all costs. Lincoln
was far sighted enough to see that
disruption and dismemberment would
be the inevitable outcome for the
Union, unless all factions cooperated
and pulled together for the common
good.
The coin-operated machine indus­
try today is in a similar position to
this country during the stress and
strife of the pre-Civil W ar and the
Civil W ar period of history. It is
being assailed on many sides by fac­
tions, who in many cases are moti­
vated entirely by selfish interests, by
unscrupulous politicians, and the
usual run of limelight seeking
preachers and club members. These
groups are always alert to point a
finger at the entire coin-operated ma­
chine industry and direct propaganda
and the press against it. They dis­
tort facts and create fanciful tales
of fiction about fabulous wealth which
is now being garnered by coin ma­
chine operators. They call us robbers
and people who prey upon children,
while they allow gambling in all
forms to flourish around these same
children in convenient stores and
gathering places in practically every
well populated city block. It is be­
cause many of these same “holier
than thou” propagandists have their
finger in the gambling pie, that they
wish to divert attention away from
their own nefarious practices, to our
industry. They endeavor to build up
and hide behind a wall of camouflage
by throwing mud at the coin machine
industry, directing public attention to
it, so that they themselves might con­
duct their own illicit business prac­
tices without interruption.
Industry Is Unjustly Attacked
It appears as though people who
want public approbation and approval
deem it their “duty” to attack or “ex­
pose” something or somebody that
is going along doing its own work,
molesting no one and endeavoring to
make a living for its members and
their families. Something established
and doing a good constructive busi­
ness, is usually the object of these
eloquent spell binders, whose fre­
quent mouthings are heard by us
from all sides — press, radio and
speeches. It is always their purpose
to clean up this terrible menace
which confronts “our children.” They
create malicious propaganda and en­
deavor to sway public opinion. The
usual motive is not their zeal to de­
fend the children and public from
menacing practices, but to advance
their own cause, either political or
public, for their own personal aggran­
dizement.
It is about time for the entire coin­
operated machine industry to do an
about face in regard to absorbing all
of these unfair methods which are
being used to sway public opinion
and legislation against us. We have
been more or less content to sit back
and allow the malicious attacks to be
continued against us without retaliat­
ing in kind, or educating the public
to the correct facts of the situation.
Are we going to continue turning the
other cheek, or are we going to stand
up on our own feet and fight for our
rights and recognition? There is no
time better than the present for the
entire industry to get together and
put in some constructive licks for it­
self, which will offset, if not remove
the attacks directed upon us.
We Must Stand Together
We must continue to bear in mind
that if we pull together we will stand
and make headway, but if we are
divided in our thoughts and actions,
we will lose the fight. There is the
old adage that it takes fire to fight
fire. Let us fight our attackers with
their own weapons, the printed word
and the spoken word. W hat is needed
is a nationwide educational policy,
which will present all of the facts
pertaining to the industry, and its
place in business. We should inform
the public of the amount of money
invested in the coin machine industry,
© International Arcade Museum
the number of people employed, the
number of direct and indirect wage
earners, the value of the products
used annually and the amount of
taxes paid to our already harassed
government. This can only be done
by cooperation and unification of the
entire industry. Not just the manu­
facturers alone, or the operators
alone, or the jobbers alone. Every­
body must do their part and keep
plugging along day by day, fighting
lies with facts, educating the public
to the fact that the majority of coin­
operated machines are strictly legal
and that the industry is one of the
major one’s of the entire country.
We Are Besieged with Rackets
It is time to attack the penny
raffles, grab bags, bank nights and
the many hundreds of other devices
which are flaunted in our faces on
all sides, endeavoring to entice
money from our pockets and our
childrens’ pockets. They cater en­
tirely to the gambling element, the
“take a chance” element, and give
nothing in return. Strong of will in­
deed is the young child who leaves
the corner store without succumbing
to the many prizes of cheap candy
or merchandise offered to him if he
picks the correct colored piece of
candy from a box, at one ccnt a
selection. The merchant withholds
some of the prize-winning candies,
putting a few in each layer, because
the children will not play them un­
less there are some of the big prizes
remaining. This is going on all about
us and nothing is being said or done
about it.
The industry should step out bold­
ly and expose the many gambling
rackets that are in operation, but in
addition they should begin a con­
structive educational policy to present
the facts about the coin machine in ­
dustry to the general public. The
best media for this purpose is the
press and the radio. All of this costs
money, yes, but it takes money to
fight money. Much money is being
spent to sway opinion against us, so
{Continued on page 23)
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