Automatic Age

Issue: 1942 February

STOP THE LEAK IN
YOUR PROFITS!
A FEW TIPS TO THE O P E R A T O R O F M E R C H A N D IS E
V E N D IN G
EQ U IP M E N T O N
K EEPIN G THE PR O FIT S
By R. H. A D A IR
Operators will a g r e e that
from now on it will take careful
planning and serious work to
make the same basic profit today
from their route as it used to
produce for them.
It is not necessary to tell any
operator of merchandise ma­
chines how prices have gone up
on bulk merchandise, p e n n y
candy bars, and nickel candies.
Not only has the operator been
faced with the increased costs of
his goods, but in addition his
servicing costs have also gone
up. It is true, of course, that
sales have turned up quite a bit
on candies because of increased
employment and more money be­
ing in circulation. However, the
fact still remains that the in­
crease is not offset by the ex­
penses which are now hitting the
operators.
Right now, the operator can­
not plan to expand his route
with additional vendors as fast
as he would like to, and in keep­
ing with the increased sales
from all types of merchandise
vendors, because of the govern­
ment curtailment upon new ma­
chine production.
To look at the situation coldly;
your present route with your
present inventory of machines
will have to earn by themselves
the profits you want. Realizing
this situation, how can you make
more profit from that route of
yours? Here are some ideas for
you to consider which you may
have overlooked.
Systematic Purchasing of Candy
Cuts Down Costs
First, how do you purchase
your candy bars or bulk mer­
chandise? Do you make sure to
order in 100 pound lots when
sending for goods from out of
town? Plan to lump your buy­
ing in 100 pound lots wherever
possible, rather than have three
or four 25 or 30 pound ship­
ments come in during the month.
After all, when you consider
that it costs you practically the
same am ount of money in
freight charges for 100 pounds
of goods as it does on 20 pounds
or so, you can easily see where
quite a bit of your profit can
leak away without your notic­
ing it.
Select Best Selling Bars
Turning to 5c candy bars for
the moment. It should be pointed
out that some operators know
little or nothing about purchas­
ing their candy. With them it is
largely a matter of guess work,
and it is no wonder they lose
much of their profits. It used to
be all right to gamble in buying
several cases of candy in the
hope that it might sell in the
candy machines. Take a little
care in your experimenting as
you cannot afford to dump cases
of unused candy away at a total
loss.
We quite agree that the oper­
ator should always be on the
look out for new bars for his se­
lective vendors. Just make sure
the bars sell before you purchase
in large quantities. It takes only
a few to test whether the candy
will sell or not in your particu­
lar type of locations. A large
portion of wasted profit is to be
found in unwise purchases of
candy. This is one leak which
you can stop by common sense
buying.
Do you keep an accurate check
on your cash r e c e i p t s from
vendors? It is recommended
that a coin counter of some type
be used. It does not have to be
an expensive m o d e l b y a n y
means. The small hand counters
selling for about a dollar or so
can serve the operator’s purpose
just as well.
The use of a counter of some
type means that the chances of
mistakes are largely eliminated.
Over a month’s period quite a
bit of your profits can trickle
away by not counting receipts
accurately.
Adjustment of Penny Portions
Turning back to bulk mer­
chandise most all operators are
quite familiar with the proper
adjustment of penny machines.
To the new man in the vending
merchandise business we believe
the best and clearest explanation
of this is to be found in the fol­
lowing data supplied to oper-
DISTRIBUTOR ORGANIZATION CONVENES IN NEW ORLEANS
Prior to National Wurlitzer Days, Wurlitzer's coast to coast field organization gathered in
New Orleans to hear Wurlitzer officials speak on the plans and problems facing the industry in
1942. Pictured above at the Roosevelt Hotel, the group witnessed the unveiling of the Wur­
litzer Victory Model 950 and the new Wurlitzer Remote Control Equipment designed for the
coming year. Wurlitzer president Rolfing, vice president Johnson, and general sales manager
Hammergren were among the speakers.
10
© International Arcade Museum
AUTOMATIC AGE
February, 1942
http://www.arcade-museum.com/
© G E T T H E G E N U IN E <§>
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ORDER NOW!—AVOID HIGHER WAR PRICES!
OTHER VENDING SPECIALTIES
Bulk Midget Chicks
lc Regular Size Stick Gum
5c 5-Stick Cellophaned Packs
Prize Ball Gum, “Victory”
Spotted or Striped
lc & 5c Chicks in Cartons
AMERICAN CHEWING PRORVCTS CORP.
"KEEP 'EM FLYIN G !"
ators by Pan Confections, Chi­
cago. In their article, “Success­
ful Candy Merchandising,” they
bring out the following impor­
tant point:
“Know the approximate num­
ber of pieces to the pound of
candy. The candy manufacturer
should supply this information.
Then decide how many pieces
you can afford to give for a
penny or nickel, and adjust your
machine accordingly. For in­
stance, if the candy costs you
12c per pound and there are ap­
proximately 650 pieces to the
pound and you decide that a
penny’s worth consists of 10
pieces—you would figure your
profit:
10 pieces for i c .................... 650 pieces to &
Machine take in.........................65c per pound
Your investment.........................12c per pound
Your Gross Profit.......................53c per pound
Gross
Profit 50°/o fo 60°/o
It has been proven time and
again that to get by with a rea­
sonable net margin of profit the
operator should figure his gross
BUY DEFENSE BONDS AND STAMPS!
profit on bulk merchandise of
from 50% to 60% of each dollar
that goes in the machine. To
show how this works let us take
the case of Spanish Peanuts.
The count per pound is about
1300 pieces. Divide this by 50%
and you get a figure of 26 pea­
nuts per penny which is what
the machine should vend. On
the basis of 26 peanuts for each
penny you will have 50c for
each pound of nuts. This same
method is used on other bulk
merchandise. S o m e operators
prefer to use the 60% basis and
it should be used wherever pos­
sible.
Poor Quality is Poor Economy
In closing let us make refer­
ence to the quality of the mer­
chandise you are vending
whether it be peanuts, bulk
candy, or 5c candy bars. By all
means do not make the mistake
of using inferior merchandise
even though it is quite a tempta­
tion when you realize, in many
February, 1942
© International Arcade Museum
AUTOMATIC AGE
*—
N EW A R K, N EW JE R S E Y
cases, the extra profits which
could be yours. However, when
you consider the margin of profit
you receive on candy or nuts, it
is hardly fair to offer in your
machines nothing less than good,
QUALITY merchandise. This is
one place where you should not
attempt economy.
Let us pound hard again on
this point for in nine cases out
of ten when an operator’s ex­
penses go up— usually the first
thing he looks at is paying less
for his merchandise. By far,
this is the start of the largest
leak in your profits and one
which cannot be repaired after
it is once done.
The profits you derive from
your merchandise vending
equipment is all a matter of re­
peat sales. What you vend is
all important. See that it is the
very best your money can buy
and in return you will have no
difficulty in selling your mer­
chandise—and keep on selling
it at a profit for yourself!
11
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