Two different business cycles in the vending business: account sales and retail sales of product.
Spring is the time of growth and renewal – more sales and opportunities. Time to sell product sometimes due to the warmer weather. On the account sales side, refrigeration equipment tends to begin showing problems which is a customer service issue but also an account sales opportunity. Any time you have a lot of service calls it’s a good time for account sales.
Summer, retail sales shift from snacks to drinks. As the temperature increases people tend to buy non-carbonated beverages. Summer account sales are tough because people take vacations and their mind isn’t on vending typically.
Episode Transcript:
Vending Business Seasonal Sales Part One Tom Shivers: I’m Tom with the Vending Business Show, here again with Larry Towner who is a vending business consultant and today we’re talking about vending business cycles in the average vending business over a year, annual basis.
Tom Shivers: So, thanks for being here Larry. How do we get started with this?
Larry Towner: Well, Tom. Vending Business Seasonal Sales Part One. One of the things that we deal with when we’re dealing with a business cycle is it has a little bit to do with human nature and what people’s cycles are throughout the year. So, I’m gonna ask you some questions too, because after all the last time I checked you were a human being.
Larry Towner: I always start with spring, because spring is the time of renewal and things like that. It’s when it’s exciting. For you, in the springtime are you … Do you look forward to spring? I mean, is spring a time that you enjoy as a general rule?
Tom Shivers: Absolutely. Oh, yeah. It’s a great time, because it’s right after a cold winter.
Larry Towner: A long, cold, and dismal winter. We’re gonna talk about wintertime last. Let’s start with spring. But, again it gets back to human nature.
Larry Towner: People tend to cycle. They go through yearly cycles, they go through monthly cycles. There’s a lot of things that affect how people do business, what they purchase, and when.
Larry Towner: It’s simple things like life events, job changes, things like the weather. The weather has a huge amount to do with the Vending business, whether you believe it or not. But, we’ll go into some of those specifics.
Larry Towner: One of the things that … I’m gonna break this out into two areas too, because Tom, do you agree with this? That there’s two different business cycles in the vending business?
Larry Towner: There is the account sales portion of the vending business, which is when you’re selling to actually go achieve accounts. And then, there’s the retail sales portion of it for the actual sales of product and service out there. Does that sound about right to you?
Tom Shivers: Yeah. I can see that.
Larry Towner: Yep. So, I’m gonna address … When we address these issues we’ll address the retail side of it first, and then I’ll talk a little bit about the account sales side of it. Some of these things are cyclical or most of these things have a cycle anyway through them.
Larry Towner: So, let’s start off with spring. Springtime is generally the time of growth and renewal, I like to call it. It’s when your business starts to pick up and you start to start seeing more sales than you do in the wintertime … I’ll get to winter towards the end, but you start to see things picking up.
Larry Towner: It picks up in the vending business. Now, most of my operations I did in the south. Although, I did work in the greater Boston area for a number of years and these cycles work pretty much the same even north and south. They’re somewhat geared more towards the south, but they still work for the north.
Larry Towner: Springtime. Springtime is the time to sell product. In the springtime we tend to have an increase in product sales, largely because of the weather. It’s cold in the morning, it’s warm in the afternoon. That’s lends a great amount of credence to selling snacks in the morning and selling cold drinks in the afternoon.
Larry Towner: And then, of course coffee if you sell coffee. That sells always usually when it’s cold, but good coffee drinkers drink coffee all the time. So, we’ll leave that one out. But, that’s what springtime does for you.
Larry Towner: Spring is time to sell and people … Their money’s loosening up a little bit, and they’re looking forward to warm weather, and it tends to give them a very positive attitude, which in turn helps with your sales.
Larry Towner: It’s gonna help people feel better about themselves and that will lend to your sales on a retail basis. Now, on the account sales side springtime is kind of a tough time to sell. You need to be doing your calls in the spring, but the calls that you do in the spring are gonna be geared until a little later on in the year.
Larry Towner: One thing I always mention about sales calls in the spring is, spring is the time when you start to see some problems with machines. Particularly the refrigeration side of the business. Because, as the machines are coming out of winner they’re not … The machines aren’t cycling on and off a lot.
Larry Towner: And so, what happens is, is when the weather starts to warm up a little bit the refrigeration units start to kick on and off and that’s usually the time that you’ll start seeing some problems with refrigeration equipment. Largely drink machines start to have failures in the springtime, particularly as there’s big changes in humidity.
Larry Towner: What that spurs is that gives you an opportunity to go in and sell from an account standpoint, because if the existing vendor isn’t out there making his service calls and isn’t aware that the springtime is gonna create service problems he’s gonna have a bunch of service calls saying the drinks are hot, this and that.
Larry Towner: Anytime you have service calls it’s a good time to go with selling accounts. That’s the time when you want to sell accounts. Summer time. We’ll go into summertime. Retail sales in summertime your whole product line shifts from snacks over to drink, because as we like to say it’s 80 to 100 degrees out.
Larry Towner: People aren’t really hungry, they want cold drinks and you’d even be surprised they’re gonna drink more … As the temperature increases they drink more and more of the noncarbonated kind of drinks. They’re gonna drink sports drinks, water, things like that. Noncarbonated stuff.
Larry Towner: Nobody wants a lot of sugar when it’s really, really hot. There’s always exceptions to these rules, but as a general rule this is what you’re gonna see from a realistic standpoint. Fall time … Oh. Account sales. Summertime account sale’s really tough and this goes for the retail side too.
Larry Towner: People take a lot of vacations in the summertime, so what you see is your workforce gets diluted a little bit. If you’re in the traditional vending account where you’re within somebody’s business, a lot of people on vacation means your numbers are down, so your sales fall a little bit.
Larry Towner: But, getting to account managers in the summertime is difficult. They’re on vacation, they’re not really … Their mind isn’t really on vending per se, it’s more on production and on getting their business up and running than it is on changing out the vending company.
Larry Towner: Again, service calls. If they have service calls it’s a perfect time to go sell. If they have any issues or they have recurring issues in particular, good time to go sell.
Larry Towner: You got to make your calls, but your chances of success are less so than they are at other times of the year. Fall time. From a retail-
Tom Shivers: Hey, Larry. Can I interrupt right here? I think that’s about all the time we have for this show, can we pick up with fall and go into winter in the next one?
Larry Towner: We certainly can.
Tom Shivers: Okay. Great. You’ve been watching Vending Business Seasonal Sales Part One at the Vending Business Show, a production of A&M Equipment Sales.
