I have been in the business on the vending machine since 2012 and sometimes you get cash crunch since I have a lot of bills to pay outside the business. It would be advisable to apply for credit terms from suppliers since once you get approved then you can carry more variety of items and supply.
I have accounts with Coca Cola Refreshments of Canada and Vending Products of Canada and they offer me about 20 to 30 days credit terms which is very good since at times you run out of money to purchase inventory. It would be very convenient on your part too since if you make a minimum order they will have it delivered at your assigned destination and you will have more time to do more of your locations and freeing up your time for other activities.
And if you are always paying on time you will have a good credit standing and applying for other vendors will come along easily. Sometimes if you are out of cash you can also use your credit card I which you can pay it off after 30 days and doing so will be building up your credit rating too and if your business expands so too will be your purchases and buying power.
I remember that when I was starting out in the vending machine business I always run out of cash so I have been using my credit terms with coca cola and vending products of Canada and it was very beneficial for me because you don’t have to wait for the 30 days check to clear but you can actually make orders once a week and issue 30 days post dated check to the supplier and this will work quite well and you will have unlimited supply for your snack and combo machines and keep everyone happy.
So actually when you are running the vending machine business, you can leverage the 30 days credit terms to your benefit, the only foreseeable problem is that you have to catch up and make sure the check is funded before the day of the post dated check to clear.
The best strategy is to make small orders on a weekly basis and make sure that when visiting the locations, you have to set aside enough money to pay for the check that will be clearing. This also works for Coca Cola Refreshments, wherein you can make some forecast on your orders on a weekly basis.
You actually save time and gasoline if you correctly order from your vendors and have them deliver be it to your house, storage or warehouse location.
Please do not abuse this method or way of doing business because once you cannot catch up the payments or go into default you will be blacklisted forever and cannot do long term business with suppliers anymore and also your credit rating will be very poor.
My method is actually small orders using my credit terms and I also go to other vendors like Costco, Dollarama and Wholesale Club in Burnaby at Kingsway and simply just pay debit or cash, this will balance your finances and you will not be pressured to playing catch up on the post dated checks that you have issued to your suppliers.
I also specifically like to use Mastercard Credit Cards since you do not have play catch up in paying off your post dated checks but when you are late for 2 weeks on your credit cards you simple just pay the payment that is required for the month and payoff everything when you have the money, because sometimes there are unforeseeable circumstances like you need to have your cargo van serviced and you missed out servicing your locations on that day and it carried on to the next week or something like that, there are many scenarios in which you cannot exactly come up with the money on time, a very good example is long weekends.
If you have a lot of excellent locations in downtown offices and there is a long weekend coming up and cannot service it on Friday or Monday since it is a stat day then your cash flow will be affected in case if you used the Post Dated Check Method of 30 days paying to your supplier.
Here is the rundown on my best system that is being used after years of experience.
1. Small orders on 30 days Post Dated Checks
2. Small orders on Debit Cash on other suppliers
3. Small orders using MasterCard Credit Card on other suppliers
You have to combine the all (3) above so that you have enough cash flow in the bank, if you always use debit cash then you will always have no cash and money in the bank, you have to balance on debit cash, credit card and post dated checks.
Sometimes I go and cross to the border to USA and visit some liquidation stores and buy products that have around 5 to 6 months to go but not yet expired and they are priced a lot lower than the Canadian prices and you will have a lot of profit margin. This is very time-consuming for me, most of the time I will just buy locally here in Canada since I already have a lot of machines to maintain unlike when I was starting out, I used to go to the US and buy liquidation items and buy a variety of chocolate bars.
But I noticed that my time is not well spent because you can do some other things that you are passionate about like Online Business, E commerce or simply go out with your family for simple movie popcorn fun or just go MALLING.
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