Linear Route Planning

A successful vending machine operator shares insights on route optimization and location selection for maximizing profits through efficient operations.

Route Planning Strategy

• Creates linear routes between point A and B
• Selects locations strategically along the route path
• Optimizes for one truck to service all machines efficiently
• Focuses on time efficiency in restocking operations

Target Location Types

• Lower income hotels and motels
• Assisted living facilities
• Low income apartment complexes
• Prioritizes locations with high consumption rates of core products

Business Model Fundamentals

• Revenue Generation

  • Buys Coke from Costco for 33¢, sells for $1
  • Targets locations with high repeat purchase rates
  • Focus on customers who consume multiple drinks daily
  • One heavy user can generate $5/day in revenue

• Location Agreements

  • Industry standard is 10-20% revenue share with property owners
  • Uses "value sell" approach instead of revenue sharing
  • Pitches improved tenant experience to property managers
  • Maintains 100% of revenue through strategic negotiation

Scale Potential

• Individual Operator Level

  • Example of operator with 1,600 machines
  • $5-10M revenue potential
  • ~50% profit margins

• Enterprise Level

  • Canteen (largest US operator) does $15B in sales
  • Operates as logistics/supply chain company at scale
  • Demonstrates massive scaling potential of the model

Operational Evolution

• Starts with direct servicing
• Transitions to warehouse operations as volume grows
• Focuses on popular products (Coke, Monster Energy)
• Moving towards "honesty market" concept (higher-end unattended retail)