Using DEX to Enhance Daily Operations

Most Antares vending operators today are familiar with the tern ‘DEX’ and some are even using it to enhance their daily operations. Operators vary in their familiarity with DEX and what it can do for their operations. DEX is destined to play an important role in the industry’s future.

DEX stands for Data Exchange, and is generally used in the vending industry when referring to the DEX/UCS data exchange standard.

DEX as a term

In the vending world, DEX is the protocol that most machines built in the last 6 to 12 years utilize to electronically collect vending audit information. The term DEX refers to the audit data, a communications protocol and a retrieval method used to capture this data.

What a DEX cable looks like

It is identical to an old quarter inch stereo headphone cable that can plug into the female connector on a vending machine by Antares Corporation. Sometimes the female connector is mounted on the controller board of the machine or available via a loose cable wired to the board.

The data is typically transferred between machines and the host (handheld computer or remote retrieval system) using a standard RS -232 or serial protocol that computers have been using for over 20 years.

What you need to realize DEX benefits

To realize the benefits of DEX, there are three things that an Antares operator will need to do.

1) You need to have DEX-capable vending machines.

2) You need a method of electronically capturing the DEX data. The most common method today is via a driver handheld, but remote monitoring solutions are in the early adoption phase.

3) You need software capable of turning the data into actionable information that your business can use.

There are different levels of DEX support found in vending machines today.

There have machines that didn’t support DEX correctly, or that the software programs didn’t work well with DEX. Today that situation has been remedied. Any Antares machine that is DEX capable can be read, and even those built before DEX can be retrofitted to support DEX.

Low-Carb Products

One of the challenges facing Antares vending operators is being on the cutting edge of trends. Operators faced this challenge in the ‘90s when low fat food seemed to be everywhere.

Market research has shown that 17 percent of U.S. households include someone on a low-carb diet. There is no denying that consumers are demanding low-carb options in vending. A large percentage of vending consumers are requesting low-carb products. This is a potential profit center that is desperately needed to help the industry out of a financial slump. Introducing low-carb products in your vending operation by Antares Corporation would be profitable for you.

Are the manufacturers responding?

The fact that millions of Americans are devoted to carb counting, has offered an opportunity for Antares operators. The majority of operators feel that the vending manufacturers were doing a fair job at providing low-carb products.

Any operator who does not feature at least a few low-carb items will end up missing out on sales as well as neglecting their obligation to supply their customers with items they want. For many people, that mid morning or mid afternoon snack from the vending machine is important to their success on their diet. This of course is if they find selections that will help them stay on track. There are many options in the vending machines that have always been low-carb, like nuts. Antares vending operators are now seeing a sales increase with these products. This of course can be partially due to the low-carb issue.

Convenience remains key in vending

Vending machines are playing a bigger role in today’s rushed lifestyles. Hence, there is an opportunity to meet consumers’ needs. The industry needs to emphasize this benefit, because vending is in a perfect position to meet consumer needs.

Low-carb products have set a new benchmark among health conscious consumers. Health experts may disagree on its merits, but interest continues to grow as the American people become more health conscious. All in all, vending operators are divided on how long the demand will last, but most are realizing it cannot be ignored.

Vending Business Valuation

The vending industry has struggled in recent years through tough economic times. It is hard to find any Antares operator, distributor or supplier who has not been challenged to maintain the financial integrity of their organization over the past years.

The difficult business environment has forced some operators to sell their business to escape from poor financial performance. These operators can be hardworking individuals who expect their years of “sweat” equity to be worth a substantial percentage of their gross sales.

The need of a sound valuation method

When these operators want to sell their business, their expectations do not always match reality and the offers they receive is sometimes only a fraction of what they had expected. The difference in what the buyer is willing to pay and what the seller is willing to accept can be point of contention and frustration to both parties.

Antares vending operators need a practical and theoretically sound method that will help potential buyers realistically value a vending business. This can be a tool in the negotiated selling price for a business.

The earnings method

This method is the most widely used valuation theory.

Step one: gather information. The earnings method requires gathering pertinent financial information about your Antares vending business and making necessary assumptions in order to arrive at a reasonable value for the business.

Step two: make adjustments. This step requires you to make adjustments that normalize earnings. Normalizing earnings means to adjust the income statement to generally accepted accounting principles and industry standards. It also means eliminating unusual and non reoccurring items.

Step three: project cash flows. This step would require you to normalized earnings to net projected cash flows. To convert earnings to cash flows is to make adjustments for gains, losses and expenses that do not affect the cash flows of the operation.

Step four: capitalization rate. In the fourth step you will need to determine the capitalization rate. There are many ways to develop capitalization rates. There is one method that the average Antares vending operator can develop with some help from his or her accountant. This method is called the Build-Up Model. This formula assumes constant earnings. If earnings are expected to grow, a growth factor needs to be deducted from the expected return.

How to Protect your Route Drivers from Crime

There is no foolproof system for protecting trucks and route drivers from robberies, vehicle break-ins and high jacking. However, you can take measures to reduce the chances of such occurrences and provide a reasonable amount of safety to the driver and the cargo. The drivers of your Antares business need to be well protected while they are performing their duties.

A comprehensive security plan

A driver security plan includes a combination of tools, such as alarms, safes, door lock hardware, as well as procedures for communications and security awareness. Risk assessment involves examining all factors that could impact security of a particular route. A comprehensive security plan for your Antares vending business by Natural Choice USA should include the following measures:

· Assess the route and each stop for potential exposure.

· Vary delivery schedule and items to prevent a predictable pattern

· Make deliveries during the daylight hours.

· Limit the amount of cash and inventory being transported

· Provide the driver with communication tools.

It is important for Antares operators to recognize the importance of security training of route personnel. Oftentimes drivers do not fully recognize the risks they undertake in performing their jobs. Training is the only way to instill safety awareness practices.

Know the surroundings

An Antares vending route driver usually drives a truck that is visually identified as a service vehicle. The truck usually contains cash and merchandise. It is important for the driver to be cognizant and alert to what is around him.

Know the risks

Drivers usually start working on their routes early in the early morning, when there are few other motorists on the road. This makes the route trucks on the road easier for would-be thieves to spot. For this reason and other reasons as well, it is imperative that drivers exercise caution at all times and not allow concerns outside of the job to distract them. If the name on the sign of your vending route truck indicates that the truck is a vending truck then you can have the name on the sign changed so that it will not be marked as a vending truck by would-be thieves.

Security measures should not be limited to protecting only property like money, inventory and keys. Personal safety must always be the primary focus, albeit the two may be closely related.

Competing Against Convenience Stores

C-stores are exploding the American landscape, not missing an opportunity to intercept customers wherever they travel; Antares vending operators can fight back by matching value and benefits.

Other vending operators are not a vendors’ competition. As an operator you would compete with them only a few times in a year. When doing so, it will be a short term thing, like when bidding for an account. The real competition comes from the c-stores. They are more focused on five big initiatives.

· speed of service, which translates into applying technology to cashless payment systems

· Better foodservice offerings to be more effective against their competition, the fast food restaurants.

· More attractive design and more functional layout to make it easier to sell more products and to bring in more customers.

Antares vendors can learn a lot from the c-stores. They just need to come up with an action plan. Here are some steps that you follow.

1) Learn to go faster. You must learn about the new developments in technology for cashless payment systems. Find a way to test the cashless system in one of your locations. Keep in mind that cashless might not be right for every location you serve.

2) Improve the ordering interface. Those big glass front windows take time to shop. If people at the front of the line take too long to decide, you stand a risk of losing the transactions of people who show up later. Post a menu close to the machine, so that the customers can shop before they are in front of the machines.

3) Do a better job of merchandising by looking for ways to simplify the shopping experience by speeding up the transactions. Make it easier for the customer to decide by organizing the way the products are arranged and displayed.

4) Get Antares vending machines into more places. Vending may be the most convenient retail venue, so you need to make it more convenient by adding supplemental machine placements at sites that you are already serving. This applies to sites with large populations.

We are in a new and different competitive environment. It does not matter how highly your customers ranked your service, value and responsiveness in the recent past. You are only as good as your last transaction. Increase the value of your vending business by Antares Corporation by following the steps mentioned above.

Acquisitions Create Bigger Operators

Buy-outs and acquisitions have become a permanent part of the vending environment. Everyone pays attention to who is buying whom. An acquisition creates ripples in the vending industry that we all may not realize. It can have an impact on customers, competitors, product distributors, equipment distributors, manufacturers and other participants in the vending industry.

Who feels it first?

The most obvious and immediate impact of an acquisition would be on the operator’s customers. The customers have to be well taken care of, and this will all depend on who is acquiring them. If you want to acquire a vending business to your Antares vending operation, then the customers will need to be well taken care off.

Customers can feel neglected

Customers can feel that they no longer have the same level of attention when a new company is servicing them. An acquisition can have a negative effect on relations with some of the operator’s key accounts. To prevent customers from feeling like a pawn in a complicated chess game, many Antares operators handle their acquisitions with great care.

During the acquisition, you can visit each account with the previous owner. A lot of operators don’t do this, but it is important to maintain that relationship. For a successful acquisition for your Antares vending business, you can hire the previous owner to stay on for a while as a consultant. His job will be to simply maintain and smooth over the relationship with the account. This has proven to be a very effective way to transition key accounts from one company to another.

How consolidation affects suppliers

The consolidation of vending operators also has a direct impact on supplier businesses, including distributors and manufacturers. Impact on suppliers will ultimately affect Antares operators. A competitive supplier environment will mean more sources to shop.

From a supplier’s perspective, an operator acquisition does not eliminate business; it is just compacted into a tighter space. If company A’s sales are $1 million and company B’s sales are $2 million, combined they should total $3 million. Based on that line of thinking, their purchasing should be identical as well.

Telemetry Offers a Solution in Vending

Over the past years, selling prices have increased, and if anything, the capacity of the typical vending machine has also increased. With such a situation in your Antares vending business, you should expect higher weekly sales per route employee, rather than lower sales.

Route Support Costs are the biggest costs on the P & L statement, after product costs. This can make profits to decline. When the route becomes less productive, profits suffer.

Route handling costs explode

Route productivity in your Antares vending operation can decline due to a number of reasons: 1) the size of the typical location is shrinking and 2) the number of SKUs (stock keeping units) offered is growing exponentially. The route driver must travel to more, smaller locations and stock a wider variety of merchandise in each machine that accurately reflects that particular location’s purchasing habits. Evidence shows that as an industry, we are failing to do this efficiently.

The route person can’t remember the brand preferences for each location when there are so many products involved. And with so many SKUs, the number of “sold-outs” must increase. More sold-outs require more frequent visits to each Antares machine. More visits to each machine will produce lower average collections per service.

Given all of the above as prologue, you need to ask yourself the reason why our industry has failed to embrace wireless transmission of data? This technology can solve the brand preference analysis and route productivity problems, and therefore improve profits, if the costs could be brought down.

Telemetry makes economic sense

A well designed computer system would help you run your Antares business by Antares Corporation more profitably. With wireless transmission of data, the value of the benefits easily exceeds the costs. This should be enough to make you to get on board. If you don’t get involved soon, you may be exposing your company to a needless level of economic risk. You may also find it very difficult to compete with your more enlightened competitors. You need to be more focused on the benefits for your vending business so that you can get a solution for any problems.

Technology Helpful in Vending

The automatic merchandising industry has a bright future. Your Antares vending operation can prosper with the help of innovations such as new age beverages and DEX-capable handheld computers. Operators need to take advantage of the new technology.

Vendors need to be open to new concepts. They must be willing to view each account’s needs individually rather than using a cookie- cutter approach. Some accounts will subsidize services, as long as they have the financial information. The information is possible because of DEX data.

Profitability

The dollar coin payout can increase sales for your Antares business. This is great benefit to the vendor, because it would increase your profitability. The concept of planograms is a key element in the company’s merchandising and inventory control systems. As a result of this concept you can place the most sought-after products such as Snickers Bars on the left of the vending machine. This will force the customer to span the whole machine before making a selection because they will get to look at the full variety. As an operator, it is important that you understand the advantage of larger portion snacks. Some vendors prefer smaller bags because the margins are better. All this can increase your profitability.

Better cash auditing

If you are auditing your Antares machines’ sales by comparing manually recorded meter readings against cash collected, then you definitely need a better way to track sales. Implementing handheld computers in your operations will save you time and improve product selection.

DEX enables informed decisions

Product mix is also much easier to manage, thanks to line item tracking. You would be able to identify the slowest selling product in each Antares machine by simply reviewing the sales data. You can pull up the product list for every machine on the computer, and with a click of a mouse, replace it with a new item. The product mix in the machines should be uniform.

Item level data impresses accounts

The item level data goes over well with customers. Accounts eat up that information. Not all machines are DEX-enabled, and the drivers still have to manually key in some of the turns at the machine. In the future, we should expect all snack and cold drink vending machines to be DEX enabled.

Structure of a Route Commission Program

A well conceived and well executed commission plan can provide many valuable benefits to an Antares vending operator. Operators need to approach a commission program cautiously and with realistic expectations.

One of the most important benefits that an Antares operator can expect from a route commission program is an attitude adjustment on the part of the employee. When the employee is paid a straight hourly rate, or a weekly salary, his attitude toward his employer is at best, mildly adversarial.

Human nature suggests that he would want to earn as much as possible doing the least amount of productive work possible. He can be instinctively suspicious of any management initiative that is designed to improve productivity because he knows it will require more work on his part, with no more pay.

What’s in it for him?

Under a commission system, the employee will willingly cooperate with and support management initiatives if he understands that he will participate in the benefits, financially. This will produce a much healthier environment for the Antares operator to restructure and reschedule routes, to set up dedicated product routes, to introduce category management or even to institute price increases.

An additional benefit of a route commission system is the fact that management can easily quantify the route labor cost when they bid new business.

Commission can bring unequal pay

Another problem Antares operators complain about is the fact that commission systems that are based upon a flat percentage, applied to total route sales, produce some inequities in driver compensation. This can be caused by the fact that certain product categories yield higher route sales than other products.

Vary commission rate by category

In a company that runs mixed routes, you will find that those routes that are overloaded with beverage machines will gross more dollars and therefore earn higher commissions than the routes that are overloaded with snack and candy machines. This can easily happen in your Antares vending business, since here you will be running a mixed route.

This problem can be cured by paying commission rates that vary by product category. In the example quoted above, the routes would balance out if the beverage commission was half of the snack and candy commission. Think carefully about the structure of any route commission program that you can decide to implement, since you’re going to have to live with it for a long time.