Automatic Age

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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