The Two Thousand Six Vending Census
Vending Times reports in two thousand six the vending machine segment of this $64
Billion Dollar ndustry grossed forty six billion, eight hundred and twenty million dollars.
They also report that the coin operated amusement segment of the vending industry grossed six billion, two hundred and eighteen million dollars.
Are these numbers accurate? NO! Here is the reason why; Vending Times census relies on vending companies filling out their little census card that is placed in their publication. So lets examine why this is a flawed report.
Key reasons Vending Times (VT) Census is flawed:
Eighty seven percent of the total vending companies in the U.S. are mom and pop operations with 500 or less machines in the field and employee four or less people.
Unlike so many business, the vending business is an all cash business; therefore not all vending companies report 100% of their earnings.
Some vending companies operate without sales tax ID numbers and do not file taxes of any kind.
If a vendor does not buy a county vending sticker, they are not put on the state sales tax roles unless they file their sales taxes they are not counted.
Only a small portion of the total vending industry subscribes to VT.
Not all of the subscribers to VT fill out the census card.
Vendors that do fill out the VT census card often under report their gross sales.
Many vendors buy used or refurbished vending machines with cash.
It is reported that over three fourths of the software used to collect vending route numbers is imbedded with the "Reduction Factor"; this allows vending companies to run two sets of books and under report gross sales to their clients.
My vending management company does everything possible to assure our clients that our 3rd party vendors do accurate reporting. It wasn't always easy to keep good records for our third party vendors until the DEX Automatic Accounting System was placed on machines, pre 1990. From that day on almost all coin operated vending machines come equipped with a DEX Accounting System; that means all you have to do is open the machines door and push in a series of numbers on the machines key pad, this action allows you to check gross sales and unit sales per selection and combined gross sales and units sold for the entire machine.
What is a DEX system? The DEX system is the machines hard-drive; this little gem starts complying data that can be translated into dozens and dozens of reports the instant the machine is plugged in and doesnt stop unless the circuit board goes down. The DEX system will tell you if a machines door was left unlatched, how many miss-vends a machine performs, the date and time of each miss-vend and sale, what denomination of coinage and paper money was deposited for each and every selection/sale, how many pieces were sold from each selection and how much money each selection grossed in sales every minute of every day. The system also has to different accounting systems; a perpetual system that cannot be set back and a thirty day system that can be set back at the beginning of every month. The only way the perpetual system can be wiped clean is if you replace the circuit board with a new one.
We always have our vendors give us the meter readings from the machine's DEX System that is placed in that location; we then enter those numbers into our computer program and we give a copy to our contact person at the location the machines were place in for their commission records. We try to make it very hard for third party vendors doing business with our management company to cheat our locations by reporting lower than honest sales numbers; because of this it is very difficult for them to cheat our locations on their agreed upon commissions.
Im sure you now understand why we estimate that the annual VT census is deeply flawed and under reported.
Copyright (c) 2009 Jimmy Ingram
by: Jimmy Ingram
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