Why is the price for an item higher in a vending machine or a micro market than what I can buy that item for in a store?
This is actually a great question and one that we hear from time to time. First, stores try to have a certain number of lost leaders. These are special prices that get a consumer’s attention because they are a great deal. Sometimes these items are even sold at a loss. Well, let me clarify this. They really do not sell them at a loss because manufacturers give stores special price incentives if the store advertises the manufacturers’ products in the newspapers, etc. With the incentive dollars offsetting the low price for the product, the stores are not really losing money. Vending is a completely different channel and is not eligible for these advertising incentives.
A vending or micro market operator also has many more costs associated to selling their products than do stores. Remember, a large part of the appeal for vending and micro markets is the convenience factor. Stores have the products shipped to them and the consumers go to the store to buy the products. We, on the other hand, bring the products to the areas that request them. If you want a cold beverage, sandwich or snack, we provide it right down the hall or in the break room.
So what is wrapped up in this “convenience factor”? 1) In addition to having a warehouse with warehouse people receiving the products, like a store, we deliver this product to each location by investing in the drivers, the trucks and the operational costs associated to the trucks. Most stores have the product manufacturer’s inventory the product on their shelves and place the orders to refill the stores’ shelves. Some of the product manufacturers also pay for shelf space and provide their own people to fill the shelves (jobbers). 2) Our next investment is in all of the equipment that the products are sold from. Some of the equipment we provide might not even generate revenue, i.e. bill changers, micro waves, etc. 3) We also have service technicians and their vehicles which are required to provide prompt repair service. 4) Finally, we incur the overhead cost of managing these people, paying each municipality’s different sales tax, machine licenses, and more.
At A.H., our goal is to provide:
- Delicious and quality products
- Friendly and responsive service
- Technology that offers a great customer experience
….and to provide it to our customers conveniently.