The Business I'm Starting
The Omni model vs. the HealthyYOU Vending model
Before an investor puts money into a business, they should know what kind of business they want to invest in.
The Omni model imagines that if you can sell *anything* that a location might want or need, this HAS to be a good thing because it opens the door to the operator being essentially an unlimited potential supplier. However, the realities of executing on this business model are fraught with many problems.
Our business at HealthyYOU Vending is built around investors that see the vast market potential in *healthy* vending, and who understand the value of leveraging our program that specializes in starting and growing this specific type of vending business – complete with locations placement, training, and lifetime coaching.
Get a location first then figure out my business?
The Omni model suggests that it’s a good idea to first invest in machines that can sell anything, then get a location and sell whatever that location wants. This idea may sound good, but it doesn’t align at all with the realities of acquiring locations. Location stakeholders will only say ‘Yes’ to an operator bringing in a machine when they know the purpose the machine will serve.
Discount vending companies tell you to hire a locating company that will find you locations for your machines. If the locating company doesn’t know what kind of vending concept it’s pitching to a location, it will be almost impossible for the company to land locations.
Location. Location. Location.
The discount vending company says that locations are the MOST important factor. Do you agree?
As long as the machines purchased can legally be placed in locations in your area we agree that locations are the most important factor. That is why we provide location assistance including working with you for your own customized location strategy. This is a big part of what our coaching team does. The discount company does not help with locations but refers you to others to do the MOST important part of your business.
The other company refers me to “professional locators”. How good of a job do they do?
They do a horrible job. We called the three the discount company commonly refers people to (including one who claims they will kickstart your business). We told them we were looking for a company to help augment our team if that need ever arose. In our calls we found they knew almost nothing about healthy vending. We asked each company for one or two people they had successfully found healthy vending locations for. None of the three would or could provide a single person we could talk to.
People who have bought machines from the discount company have called us asking if they can purchase locations because the “professional locator” was unable to find any locations for them.
Is getting locations really that hard?
It depends on whether you want good locations or not. Look at the web sites of the “professional locators”. They claim to be experts in locating everything from soda machines to gumball machines to massage chairs. Before we sold the first healthy vending machines in the nation in 2007 we sold traditional vending for eight years. There is a HUGE difference between locations for junk food machines and locations for healthy vending machines. It took us a year or two to get really good at it. “Professional” locators don’t do enough healthy vending machines to be motivated to learn how to do it well. They provide mediocre spots at best and take a REALLY long time to get them – which is why the discount vending company says they will store your machines for up to six months.
Will I have to pay commission to locations?
The first thing locators do when they get to a potential location is to say that you will pay the location 20% of your gross revenue. This helps them get locations but it is your money they are giving away. The VAST MAJORITY of our operators have their machines in locations with ZERO commission- and in better locations than locators could ever get. Huge difference. Helping you get great locations is one of the many advantages of working with a full service business like ours.
What’s the problem with a Chinese-made machine?
Discount vending companies just recently started selling a Chinese machine. Our machine is one that we designed along with Seaga manufacturing engineers based in Illinois, and it is made right there at the factory in Freeport. Our machine meets NAMA certification requirements and replacement parts get sent to operators right from the factory in the heartland of the U.S.A. Most parts can be easily replaced without the need of a technician – saving our operators time and money.
Omni focused machines from a discount vending company are made in China. We’ve had experience with Chinese manufacturers and know that parts and material quality are very uncertain with Chinese machines. They simply don’t have the same rigorous standards for production as machines made in the U.S.A.
Also, looking down the road to getting parts for Chinese machines, as well as the actual repairs involved is a disastrous combination. Parts, if and when they can be obtained, almost always involve an expensive technician to fulfill the repairs. And it may be there are no technicians in your area at all, that can help you. Calling China for help is a 12-hour time difference from Eastern time. It is just a bad combination that you wouldn’t want as part of the reality of your business operations, would you?
Why is the American’s with Disabilities Act (ADA) relevant to my business?
Most American-made machines are made in compliance with the requirements of the ADA. That’s of course true for our machine made in Illinois. Omni Machines from China are not. Why is this important to a small business owner running a vending business? Because machines that don’t comply with ADA requirements cannot legally be put in any public setting. All operable parts of the machine must be below 48” high so that it is accessible to a person in a wheelchair. Fines associated with violating the ADA are the responsibility of the machine owner – not the manufacturer in China, nor the discount vending company that may have sold the machine. Fines are retro back to the date the machine was placed in the location, not from the date it was reported, and these fines can total upwards of $50,000 for you, the vending machine owner. Would you want to limit your machine placement to only private settings?
Omni focused machines sold by a discount vending company have touch screens that are out of reach of potential wheelchair patrons. Would you want to put your business at financial risk by having a non-ADA compliant machine in a public location?
You can vend almost anything – but do you want to?
The complications of running a business where you have to know dozens and dozens of supply channel options to acquire your product is a headache. If you’re selling things like laundry soap, hair extensions, emergency kits, food of different kinds, T-shirts, etc. your product storage area and inventory management is a flea market of epic proportions! Specializing in healthy snack and food items, and knowing that’s what you want to do, is a much easier business to manage. Do one thing, and do it well, is a good business model and we and our operators ascribe to that philosophy.
When the machine’s elevator goes down the whole machine is down – who can fix it?
Chinese machines with elevator delivery systems look cool, but only have the potential to affect profitability negatively. No additional product is ever sold because of the elevator arm. However, if that arm or conveyor belt goes down, the entire machine is rendered useless. And who can fix the elevator arm and conveyor system? Chinese machines are not typically sold in the U.S. and most technicians are not trained on them. If someone is not certified to fix your machine, they will not take the job, and you might not want them ‘having a go’ at it. It requires a specialist. If there isn’t one in your area, it could be a real problem.
Conversely, if a single coil fails in a coil driven machine like ours, every other product can still be sold. And swapping out a coil motor in our machine is done very easily – you don’t even need tools or a specialist, and it takes about 3 minutes to complete the job.
What about the ratio of snacks to drinks in the machine?
Discount vending companies make the claim that because far more drinks have been sold from vending machines than snacks, you’ll want your machine to be able to sell far more drinks than snacks. In traditional vending, drinks sold annually will exceed snacks sold because there are more ‘drink only’ machines than ‘snack only’ machines. As the nation’s largest healthy vending company we designed our machine to sell both drinks and snacks in the healthy vending space. In healthy vending the sale of snacks matches or exceeds the sale of drinks. None of our over 1,800 operators has ever told us their business suffers because of the ratio of snacks to drinks.
What if I want customized graphics and an adjustable machine?
Some discount vending machine companies extoll custom graphics as a key feature and imply that somehow our machine can’t have custom graphics. This simply is not true. What is true is that there are a number of wraps that can be chosen from, or if you wanted to customize your own you can do that.
The same goes for the claim that only their machine is adjustable or ‘convertible’. Our machine can be configured to sell different sized items if desired, and it’s not difficult to do. However, we’ve done a lot of research and set our machine configuration to optimize product space and sell ratios of snack types that work well in the healthy vending space, and most operators don’t make changes to the configuration.
What about lasers and guaranteed vend sensors?
Some vending machine sellers claim that if a machine doesn’t have laser sensors guaranteeing vends, you’ll be getting angry calls all the time and even lose your great locations because of it. Lasers are not the only way to guarantee vends, and our system uses coil turn sensor technology, along with full product stocking training that will result in machines being loaded properly. When something doesn’t vend right from a machine, it’s not the machine’s fault, it’s the operator who has loaded product carelessly. We have operators who have dozens of machines placed and can go years in between hearing anything at all about misvends because they take care in working with their machines. And our drink section meets the Pepsi misvend standard of less than 1 misvend in 1,000 vends – the highest standard in the industry. Our manufacturer is a major manufacturer of machines for Pepsi. Incidentally, Pepsi Asia does not use Chinese-made machines.
Discount vending operations claim to sell used HealthyYOU machines. How and why?
Some discount vending companies will highlight that they have HealthyYOU Vending machines for sale, if you want to buy from them at discounted rates. What’s not stated, is that it may be one or two machines which they bought from someone making a life change, and they use our name, which is the most recognizable name in the healthy vending space, to start a conversation about the healthy vending business. Then the ‘bait and switch’ to talking about their Omni focused machines occurs. They couldn’t sell you a set of 5 or 10 of our machines if they wanted to. They simply don’t have them.
Why does the machine from the discount vending company cost less?
Companies that sell just equipment and no associated long term help – a full business solution like what we sell- will always be cheaper. You’ll be adding to the cheaper cost your payment to a location company to find you a location – perhaps $1,000 per machine, but that still doesn’t include lifetime coaching, real business training, a 24/7 Support Center, a lifetime warranty, etc.
And Chinese-made will always cost less than U.S. made because of inferior components and production standards. It costs less to make a machine that’s not certified. Many states require that machines be certified by either the National Automatic Merchandising Association (NAMA) or the National Sanitation Foundation (NSF). The Chinese-made machines sold by the discount vending company are not certified.
Training and Support
How important is setting a business foundation?
No building gets built without plans that include many details about the foundation the building will be built upon. At HealthyYOU Vending, we provide operators a business foundation based on years of experience in the healthy vending space, and it includes the all important details around location acquisition and strategy, product mix optimization strategy, price point sensitivity analysis, location engagement needs, a long-term coaching engagement plan, and a business growth mapping strategy that allows someone to become a ‘super operator’ if that’s the goal. And in addition to that, we have our excellent custom designed machine and software.
Discount vending companies just sell machines. They aren’t helping you start a business. They don’t help you find locations. They sell you a machine as the ‘foundation’ of your business, train you for a few hours on how it works, tell you the business details will take care of themselves, and claim that vending is easy in every respect after getting their machine – that ‘it’s just vending.’
What is the difference between machine training and 2 day traning with Lifetime Support?
Knowing how the machines work, and hands-on training in working with the machines is important. Discount vending companies may provide a few hours of training in person on the machine but because you are only buying a machine from them, that’s all the training you really get.
The Healthy YOUniversity training our operators get, is a two-day comprehensive business startup training, which of course includes several hours of hands-on training with the machines. It also includes the benefit of other new operators being trained alongside you as well. We have all experienced the benefit of good questions being asked by other people, which helps with the learning process. Solo training from a discount vending company doesn’t provide that added benefit.
Coaching vs. “I’ll take your call”
Our program includes lifetime coaching support from a team of full-time coaches who are expert in this business. Their time is fully dedicated to helping you with any question you may have – business strategy, location engagement best practices, product strategy, working with the machines – all things you’ll need help with from time to time.
One or two-person discount vending companies train you on the machine then indicate to call them if you have questions. With one or two people in the entire operation, it doesn’t take a lot of imagination to understand that taking sales calls, doing in-person training, and fielding support calls when they come in can only lead to prioritization challenges when providing help and support. What kind of help does your business deserve?
Helping you increase revenue – it’s what we do
Our goal is to help you succeed in your business. Your revenue will increase when you apply the best practices strategies that are taught at our training, and as you work with our coaching staff to fine tune your business.
Discount vending companies sell you a machine and then literally tell you that you will easily figure out the rest. How much do you know right now about product pricing best practices, machine specific location promotions to run, what business entity is most advantageous for you to set up, where and how to find deals on relevant products in the space, location expansion strategy?
We can even look strategically at your area, get a visual on what is selling best and what is being charged for these products, so you keep your business in-line and don’t under price a product.
We also provide you a 24/7 accessible support site, which includes a collection of all the things we’ve learned over the years that could be helpful to an operator – right at their fingertips. Included on the support site are even training videos you can replay any time, to help you remember machine details you can apply when working with your machines in the field.
Discount vending companies don’t offer this type of resource. With them, you need a good memory, and will be learning from the school of application and hard knocks, to get your business in working order.
Do discount vending companies know anything about healthy vending and related products?
What to sell in your healthy vending machine and where to best get it, is something we’ve learned over the more than 13 years in the healthy vending space. Discount vending companies aren’t helping anyone start a business; they are just selling machines. They have no official product resources or strategies to talk to you about. They tell you you’ll figure out your business after you buy machines from them. And they even suggest that you might find you want to sell any number of things instead. Before you invest any money, we always say ‘First, know what kind of business you want to get into and why.’
How can I get best prices on products?
With our connection to United Natural Foods, Inc. (UNFI), our operators leverage a specific buying group and get below wholesale pricing on whatever they buy. Discount vending companies have no established buying connections. They don’t care what you sell, they just want you to buy their machine and figure it out as you go.
What does product availability and selection strategy have to do with increased revenue?
Our model includes helping you with product strategies. UNFI buyers have flexible ordering capabilities that allow them to be much more strategic. For example, big box wholesaler multi-packs are filled with a set number of product flavors you could sell in your machine, but what if one of the flavors sells really well for you, another just does okay, and another hardly sells at all? You have one winner, one that’s average, and one you’d rather not have at all. With UNFI, you can order just the flavor that’s doing well, and there is an almost limitless supply of products and flavors to pick from. You’ll also have access to their best seller’s lists, so you can always choose from national best sellers as a starting point, and tailor your needs further by location.
Strategic product availability and selection drives increased revenue. Someone selling products that just do okay, will have a business that just does okay. We know that products and product knowledge are key to this business, where a discount vending company brushes off products as being almost irrelevant and inconsequential and something you’ll just figure out because it’s all so simple. Do you want a great business or one that just does okay?
Consumer Protection Laws
Is it true that the discount vending company doesn’t have to follow the consumer protection/business opportunity laws that you and other companies follow?
It depends on who you talk to. If you ask the state and federal regulators they say yes. If you ask the discount vending company they say no. Why? They say it is because they don’t really help people start a business but just sell equipment. We believe that they are already under investigation by several states for violation of the law.
Why should I care if THEY are the ones that are violating the law?
Ask the customers of the last couple of companies who were forced out of business by the regulators. Once they went out of business their customers lost their machine warranty and the little support they provide. Worse, customers who did not have all their machines never got their machines. This is why states require that once you pay that your machines be shipped into your area and under your control. The discount vending company violates the law by not shipping your machines.
But they’ve been in business for years? Wouldn’t they be out of business if they were really violating the law?
It is only recently that they starting pretending to help people start a business. In the past they were strictly an equipment seller. One company shut down by the government had been in business longer than the discount vending company. They paid a $1Million fine for violating the law.
And we believe 2020 will be like 2008 when state governments took action during the recession to protect their consumers. We do not believe that the discount vending company is a scam BUT they will be treated as such by the states for knowingly violating the law.
If you decide to buy from a discount vending company protect yourself and have them ship all of your equipment to a local warehouse. Then they can pay for up to six months storage in a place where YOU control the machines.
Talking to Other Business Owners
Shouldn’t I talk to someone in this business before I invest?
Our position has always been that it’s a good idea to talk to someone who has invested with the company you’re thinking about investing with, to get some first-hand perspective on what the business is like, as well as what it’s like to do business with the company you’re partnering with. By doing this, it provides you insight into things like day-to-day operations, what it’s like to work with the machines, and you can even learn about ROI capacity for the business. All these things are really important to know about before you invest.
**If you haven’t received a list of people you can call, please contact our offices.**
How do people do who buy machines from discount vending companies?
How DOES it go when you just buy machines? Find locations on your own? Figure out products and product suppliers yourself? Discount vending companies will give you exactly zero references, and no one you can speak to about the realities of their experiences in working with the discount vending operation. Do you want to start a business and work with a company that can give you no references?
And here’s a little bit about our history that is very relevant to this question. WE actually tried that business model ourselves in the very early going. It’s much cheaper to sell just machines and offer no substantive help. But EVERYONE struggled, and it wasn’t good for OUR business to have people floundering. THAT is why we have the full system in place that we do today. We want our operators to be successful, and we know the program that’s best suited for that success – and it’s NOT selling just machines.
The Bottom Line
What’s the measure of an investment?
As we see it, it comes down to whether you want to start a business in healthy vending, with a company that specializes in this, and who has helped more people do this specific thing than any other company out there; or do you want to buy a few machines, tinker with vending as a general concept on your own, and then see where it goes from there?
In the end, it’s your business decision that matters. As we see it, one of these choices is fraught with much more risk than the other. It’s not about what the investment costs you that’s the important thing, but what does the investment BECOME. You can save money on the front end by going a cheaper route, but if it flounders and becomes nothing at all, it wasn’t a good investment to make. We learned through our own experience over the years that operators who have a structured proven system to leverage are much more likely to grow a business than those that don’t. Which business philosophy do you think would work best for you?