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Vending Glossary

Vending Glossary

Bill Acceptor (aka bill validator): The slot on a vending machine that is able to read and accept currency payments, usually $1 bills but occasionally larger denominations, depending on the kind of vendor.

Bins, columns or spirals: The separate vending spaces of a vending machine to which rows of specific products or items are assigned. Most newer snack vendors utilize spirals that twist to dispense the product. The term column is primarily used for cold-drink vendors.

Bottler-serviced machines or vendors: Beverage machines that are serviced by a soft drink or beverage bottling company, whose original location agreement is arranged by a vending operator who receives a regular commission check.

Box truck: A vehicle occasionally used by vending operators that is similar to many of the larger U-Haul self-moving trucks, which are basically a big “box” attached to a truck chassis behind the cab. These vehicles frequently include an incorporated lift at the rear, which is ideal for raising and lowering stacks of cold drinks and even vending machines.

Bulk vending: The sale of snacks, candies or non-food items in bulk vendors designed to dispense a measured or weighed portion of food or a packaged toy, stickers or other merchandise.

Bulk operator: A vending company or route person who services vending machines that dispense a portion-controlled amount of gumballs, candies or nuts, as well as small toys in plastic capsules or “eggs”.

Business plan: A comprehensive document that will form the framework for your business. A good plan includes several components, including a cover page, executive summary, business overview, state of the industry, competitive analysis and marketing strategies, operations plan, management overview and company finances.

Charity sponsorship: An agreement with a local or national non-profit organization, frequently used by bulk candy and snack vending operators, to pay a small percentage (usually 10 percent or less) to the organization for the use of logos, images and stickers on the vendors. Operators frequently use the sponsorships as a selling point for winning placement approval at locations.

Coin mechanism: The mechanical or electronic part of a vending machine that both counts the coins inserted and dispenses change after a selection is made.

Commission: A percentage of gross sales frequently paid to locations for the right to place a vendor or vendors on the property. These can range from 5 to 35 percent or higher, depending on the individual location agreement.

Cold calling: The act of paying a personal visit to the respective managers of potential vendor locations, none of whom have any advance notice of your visit, to try and create interest in your vending or other business. The act of telephoning the same people without their having any prior knowledge of your business or the purpose of your call.

Free vend: A specific period of time that a vendor is set to dispense its products without charge. Usually done as a perk or reward for a good location during a business meeting or other event.

Full-line vending: The incorporation of frozen and refrigerated foods to the snack and soda line.

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Honor Box Vending: A system of snack trays and drink refrigerators whose products are sold on the “honor system”; in other words, people place their own money for the products in a cash box located directly on the tray.

Income statement or analysis: One of the three parts of the pro forma financial statements, the income analysis details income and expenses for a specific time period, usually a month, quarter or year.

Limited liability company: A business structure available in most states that conveys the advantages of a partnership but without the disadvantages.

Locater: Someone who is paid, usually a set fee, to find and secure locations for a vending operator’s vendors.

Locating company: A business whose primary mission is to provide vendor locating services to vending business owners. Such companies frequently contract their work out to outside locaters, who have no other ties to the company in question. Frequently used by biz-op promoters to provide locations in bulk.

Location: A particular business, company, building, or other structure where a vending operator has vending machines.

Location manager: The person with whom a vending operator deals with and who has the authority to accept vendors and vending agreements and sign a contract, if necessary. Also, the representative of a large vending operation who is responsible for overseeing the vending operations of a particular location.

Meter: A small device attached to a vending machine to count and record the amount of vending cycles.

NAMA: The acronym for the National Automatic Merchandising Association, the largest trade organization servicing the vending and contract food-service industries.

OCS: The acronym for Office Coffee System, which is a service frequently supplied by full-line operators as an added benefit to their best clients. Not considered very profitable, OCS is frequently used as a tool to win a location’s complete vending service business.

Operator: The owner of a vending business, who is sometimes also referred to as a vendor, a term more commonly reserved for describing vending machines.

Planogram: A diagram of a specific vending machine to show which products are to be stocked on specific spirals, bins or columns.

Product markup: The price set for the wholesale or retail cost of an item that will earn the business a profit after the cost of purchasing the product and marketing it are discounted.

Profit: The amount of revenue left over to a business after the cost of products, labor, distribution and infrastructure are taken into account.>

Route: A particular series of vending locations that are located relatively in the same area or encompass the same type of vending items, which are usually serviced on the same day of the week or month on a regular basis.

Route cards or reports: Index or larger size note cards used to record all pertinent information about the particular servicing of a location’s vendors, such as the date, vendor number(s), amount of money collected, number of snacks and beverages sold, refund amounts disbursed, and quantity of products wasted.

Route person or driver: The individual assigned to a particular vending route.

Servicing: The act of replenishing the stock of a vendor, removing the proceeds from the previous week or month of sales and wiping down the exterior services. Vendors are also verified to be operating properly during servicing and repairs done on site, if possible.

Shrinkage: The loss of product to theft or non-payment and a term frequently used in the honor box vending sector. A certain amount of shrinkage is frequently considered acceptable among honor box vendors since the product markup is usually high enough to offset a certain percentage of losses.

Slave machine: A vendor that does not have its own computer or selection buttons and must be attached to another machine where the selections are made.

Snack and soda vending: The most popular form of vending that includes snack machine vendors, which sell chips, candies, nuts and other products, and cold drink machines.

Spiral: The most common form of modern vending machines to vend their products. Individual bags of snack items are “hung” on spirals, which twist or turn the exact amount of distance during the vend for the item to fall into the vend area below.

Step van: A vehicle frequently used by vending operators, which is similar to the ones used by the United Parcel Service and other delivery companies. The interior is tall enough in which to stand up, and the interior isle makes stocking and filling orders easier compared to a standard delivery van.

Vend: The vending machine cycle during which the purchase and delivery of a single item is completed.

Vending location contract: A legal document by which a location manager agrees to the placement of a vendor on the premises by a vending operator, as well as other stipulations, such as the minimum length of time or commission amount, if applicable.

Vending operator: A person who owns, stocks and services vending machines that sell snacks, drinks, small toys or other merchandise.

Vendor: A common name used for any type of vending machine that sells a product in exchange for inserting coins, currency, or magnetic strip cards; also frequently used to describe a vending machine operator or the owner of a vending business.