The Top 4 Blunders Sean Kelly, H.U.M.A.N. CEO, had to overcome before the business model was completely optimized…
Blunder #1: I didn’t REALLY know the ins and outs of the vending industry. I had no idea how opposed the industry is to progression, innovative technologies, and health promotion. In the beginning, I tried to work completely WITHIN the old-school good ol’ boys club that is the traditional vending industry. This simply caused me to waste months of time and thousands of dollars in a stagnant industry that didn’t want to budge.
Solution #1: I analyzed and improved upon our business from the progressive, innovative, and demanding perspective of a discerning, health-conscious customer, instead of a traditional vending operator. This means our machines attract customers, rather than being the last resort of a passer-by.
Blunder #2: I tried to have us operate all of our own machines. To maintain complete control of our operations and maximize profit, I thought it would be a good idea for us to operate machines across the country by ourselves, or more specifically, via people that we hired on an hourly basis. This wreaked-havoc on our supply chain, slowed-down expansion, and created logistical nightmares. We weren’t fully opening-up our arms to others, and this minimized, not maximized, profits.
Solution #2: I now share our expertise, experience, and innovation with open arms by having our partners operate all H.U.M.A.N. machines, while we help them by managing locations and advertising.
Blunder #3: I set-up 100% in-house product distribution. Another BIG time whammy! We stored and shipped-out every product order ourselves, focusing a great deal of effort on the wholesale side of our business. Even though this generated profit, it meant higher prices, slower delivery times, and less-the-optimal service for our vending operators. My focus was not where it should have been.
Solution #3: I refined our business model so that we now completely outsource our product distribution to 20 warehouses across the country, meaning w make zero profit from our product sales in order to ensure that our partner vending operators receive the lowest possible product prices with the fastest delivery time.
Blunder #4: I allowed partner vending operators to start-off with fewer that five machines. Talk about a bad decision for everyone! Almost always, operating a route of only 1, 2, or 3 vending machines requires too much time and hassle for the reciprocal amount of profit that is produced. My parnter vending operators could have been making more money in less time, but my planning was off-target.
Solution #4: I placed our partner vending operators’ profits as my top priority, and therefore, require operators to start-off with at least five healthy vending machines to maximize their “profit to time” ratio, experience immediate positive cash-flow, and set themselves up for long-term success.
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