Some distributors have had vending integrated into their service offerings for years, but others are just now dipping their toes in the water. Here are three challenges many are facing as they move forward.
These are featured in the latest article in the MDM Special Report on the Industrial Vending Boom, Industrial Vending’s Growing Pains. Read that full article here.
Finding the Right Approach for Profitability
The cost of vending machines can be anywhere from $5,000 to $20,000, or even higher than that, depending on the technology in the machine. That puts many distributors in a position where they have to evaluate whether even entering the market is worth their time and money. Package that with finding the right product mix to serve a customer’s needs, as well as a potential drop in revenue from that customer as usage goes down (thanks to the vending model), and many distributors are still reluctant to jump in with both feet.
Meeting Customer Expectations
To really provide value to customers, distributors have to meet their expectations. For example, distributors can’t have stock-outs. “ … If you do a good job, the customers know it. If you’re doing a bad job, they’re going to know it. There’s no hiding these errors,” says Scott Nadler of the University of Central Arkansas’ College of Business. And if distributors do work with customers to align and then meet expectations, consultant Jon Schreibfeder of Effective Inventory Management Inc. says it’s more likely customers will stay put.
Moving from Defensive to Offensive
Switching to a more offensive position requires a more strategic focus on vending as part of your overall offerings, according to Steve Pixley, founder of Autocrib. “If you’re just trying to defend your top three accounts (by introducing vending), in the long run you’re going to lose because your heart’s not in it,” he says. The companies that are actively investing in vending are the ones who will win.
Read the full article: Industrial Vending’s Growing Pains.
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