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Outsourced or Self-Op?

Compare the Difference

This 5 minute You Tube presentation will explain why schools earn 5 to 1o times more income from self-op vending as opposed to using an outsourced ‘professional’ vending service: 6 Reasons why School Self-op Vending offers 500% more money to schools

The reason that schools can earn a minimum of 500% more income through self-operated vending machines is that the expenses of an outsourced vending company become the net profits of school operated vending machines.

Outsourced Vending Operator School Self-Op Vending
$40K route Truck Expense Profit
$50K Route Driver Expense Profit
Fuel/DOT Fees Expense Profit
Offsite Storage Expense Profit
Owners Profits Profit
Income Taxes Expense Profit
Insurances Expense Profit
Accounting Expense Profit
Commisions Expense Profit

 

Even loaned vending machines can cost dramatically more, due to their product restrictions and the far higher beverage prices that are expected to be purchased for resale in those supposedly “FREE” vending machines. When a school can buy water bottles for less than 20 cents but have to pay over 50 cents for water bottles to load into their “FREE” vending machine, that “Free” machine can cost them $$$$ more every year than owning their own machines and loading them with whatever they choose from whatever suppliers offer the best selection at the best price. Albany High School in California replaced two “Free” beverage vending machines with two MAX machines from Vend-ucation. Their sales went from $8,000 annually to over $36,000 annually. Their net profit margin jumped from 40% to over 55%. Those “FREE” vending machines were costing them about $19,000 per year in lost income.

The Dreaded “R Factor”
crossed-fingersSchools basing decisions on vending suppliers on the basis of RFP commission quotes should research the vending R Factor. Just Google R Factor Vending and you will see that vending commissions have no basis in truth. Most (if not all) vending accounting software packages have the capacity to keep two sets of accounting records, with one fabricated set of records generated to offer a deceptive computer report to validate any false sales reporting they may choose.

THE ONLY POSSIBLE WAY TO AUDIT VENDING SALES IS TO REVIEW THE NON-RESETTABLE SALES METER ON EACH MACHINE ON AN ONGOING BASIS. Even telemetry based reporting systems offer the capacity to relay false sales reports to commission based vending clients. This an industry wide practice!!! This is not isolated. If you do not visually audit the non-resettable meters on each commission based vending machine at your school on a regular basis, then you are being cheated.

The Nutrition Challenge
Vending companies do not share the same supply chain as School Nutrition Departments. Vending companies will not offer the fresh made foods that a school cafeteria can sell through their vending machines. Schools can load their vending machines with fresh fruit, sandwiches, fresh made yogurt/fruit parfaits, fresh kitchen baked cookies or muffins, baby carrots with a ranch condiment cup, celery with peanut butter, fresh kitchen made muffins, cereal, a bag of grapes, a bag of strawberries and bananas, and a host other fresh, nutritious snacks, beverages and food that an outsourced vending company cannot and will not offer.

Socially Unacceptable Out-sourced Vending Concerns:

  1. Dept of Justice Federal Fines: In March of 2012 new vending regulations were imposed to accommodate wheelchair access. This Civil Rights legislation imposes fines from the Federal Dept of Justice of up to $55,000 against whatever public facility that allows a vending machine to be installed that does not provide a 48” vending payment access as well as a 15-48” retrieval access.
  2. Green Energy: There are specific vending machines that are engineered with more efficient refrigeration and more efficient insulation, but they cost more. Outsourced vending companies have no incentive to invest more in green energy when they aren’t the ones who pay for the energy consumption of school vending machines. The annual energy cost difference between the best and worst refrigerated vending machines can easily be several hundred dollars.
  3. USDA fines for school vending violations are increasing. The traditional vending industry has entirely separate supply chains from School Food Service Departments.