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Monday, January 29, 2007

Raising Prices in Your Vending Business

Raising prices has always been a major challenge to U.S vending operators. Customers always expect vending machines to be always a low cost alternative. This is reason why many people would rather buy a snack or a beverage from a vending machine rather than a retail store. The two competitors of vending, convenience stores and fast food restaurants have enjoyed hiking their prices while vending prices have trended flat. This has always been a challenge for vending operators everywhere, including Planet Antares vending operators.

Caught in a bind by suppliers who are charging more for items, Planet Antares vending operators often find themselves caught between a rock and a hard place when they come after the end consumer by increasing prices. If there is a need to increase your prices, you should do that, even if it will mean losing a few accounts.
A dual challenge
A strategically thinking vending operator will recover the accounts he looses on account of price increases. This is what you need to remember as you try to refashion yourself from a universal crowd pleaser barely making ends meet into a smart selector of drink and snack options who understands the art of regular, price hikes.
The challenge is twofold: 1) to demonstrate to the account manager that the need for a price hike is driven by your own rising costs, and 2) to show the raises are in the interest of assuring all customers of continued service excellence.
The challenge never ends
The challenge for many Planet Antares operators is to navigating between relentless penny price hikes inflicted by the bottlers and other suppliers and the touchy world of demanding more from the customers. Asking customers to pay for the products can be almost impossible in most situations.
If you are not making any profit from a certain account, then you will be better off without the account. You started a Planet Antares vending business to make money, so if there is an increase in your costs rise, it will mean that you can only continue to make profits by increasing your prices. When there is a need for price increases, you can send a sales/PR person to each account to explain when it will be effective. On that date, route people should post letters on the fronts of the vending machines, explaining the price hike as kindly but as firmly as possible. You will also need to explain the fact that in order to continue to provide good service, you must recover your own costs.


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