What Will A Price Increase Do?Price increases will help improve your profit margin. It will also help absorb the wholesale increases.
Here Are The Most Common Reasons To Delay A Price IncreaseYou are afraid your customers will notice the increase and be angry or disappointed in you. You feel comfortable with your current level of income. You don't know how much you should raise your prices. You are not seeing your competition raising their prices. You're afraid you will just have to work harder to sell the same amount of merchandise.
Five Ways You Can Smoothly Handle Raising Your PricesIncrease your prices regularly. Slowly raising prices at regular intervals will help you keep up with inflation and may even keep you ahead of inflation. By raising your prices once a year in small increments you won't attract much attention.
Pick A Month You Will Raise PricesSo many vending companies get out of the habit of raising their prices. Then they find themselves forced to make a major price increase. A major increase draws the attention of your customers and will come as a surprise to them.
It is much better to raise your prices more frequently in smaller amounts. Raising the price of chips one year, candy the following year and pastries the year after that helps to lessen the shock of a price increase.
In the vending business your wholesale prices will slowly increase. Many times a wholesale increase will be as low as .25 cent per unit. Many vendors are lulled to sleep with such a small increase but over time they do add up.
After a few years without a price increase the vendor finds themselves without the capital to make needed improvements. Take the philosophy that the wholesaler takes and increase more regularly in smaller amounts.
Establish Quality And The Price Will FollowQuality needs to be established before a price increase can be warranted. When I speak of quality I'm speaking of both product quality and quality customer service. In the vending business service and product quality must go hand in hand.
Quality of your service comes in the form of deliveries being made on a regular schedule. This includes the machines being kept clean, filled to the prescribed fill level and, of course, working. As the owner of a vending company you need to have a program in place that ensures the driver is doing a good job and not cutting corners.
Name Brands Sell. An example of this would be Baby Ruth and not Baby Ruth Crisp. The crisp bar does come at a lower price but with the limited amount of space a vending machine has it's not advisable to try saving a few pennies this way.
Establish quality in your service and the products you carry. By doing this you have a winning combination that is hard to beat and customers don't mind paying for.
Offer Different Sizes
You can add new sizes of product to your machines to enable an increase. If you are only handling the vend size chip add the LSS (large single serve) bags to your line up. When you add the bigger bags it is a good time to raise the price on your vend size bags. By giving your customers a choice of sizes they will respond more favorably to the small bags new price.
Serve Your Customer BetterAs we talked earlier, give the customer what they want: quality products and good service. You will find the price issue just goes away. People enjoy doing business with people they like and trust. Remember, always listen to what your customers want and over deliver. They will be willing to pay for it.
Let Your Customers Know Why You Are Increasing Your PricesThere are different feelings on how to let your customers know of an increase. I tell my contact at every location in person. I then like to put a sign on the machine that reads like the statement below:
We value our customers and appreciate the patronage that you have given us over the years. However, due to manufacturer increases our suppliers have increased their prices. To help offset some of the costs we will be increasing our prices.
ABC Vending Company