Foxes adorn more than the logo at Fox Vending Inc. in Bridgeview, Ill. Three of them guard the lobby and remind the staff that it takes cleverness to start a business and keep it running. The operation has survived more than half a century through dedicated customer service and an eye on profit margins. Under the founder James Fox to second generation president Jennifer Fox, the company has grown to service a 50-mile radius around Chicago and swelled to 18 routes. Fox Vending’s success stems from launching into new types of services and never compromising profits to get new business.
One machine started it all .
James Fox worked as an Aramark vending route driver in 1961 after being discharged from the army. He loved his job — the hours, the independence, the idea. He was lured away by better pay and tried other delivery jobs, but Fox decided he preferred vending. He started his own business, A-OK Vending, in 1962 with one cigarette machine on the Southside of Chicago. His main point of difference was he never operated on credit.
“In building this business, I didn’t borrow any money,” explained Fox. “If I didn’t have the money, I didn’t buy it.” Fox even owns the building in Bridgeview and rents it back to the operation.
Fox Vending also adopted money saving strategies early on that would be considered green now. Fox added skylights to the warehouse roof in 1993 and now no electric lights are required, even in winter. Around the same time, the company added a cardboard compactor that condenses all the boxes into pallets that Fox Vending sells.
Assuming a new name
In 1975, the Fox Vending name became available and James Fox decided to personalize his business. He also added the image of a fox to the logo for the purpose of marketing. Adding his phone number and name to the top of downtown delivery vehicles was also part of his marketing strategy.
The company grew organically and through acquisitions, some of which brought office coffee service opportunities. Fox Vending got into Keurig single cup brewers when it purchased All Seasons in January 2004. While the management likes the quality and flexibility of k-cups, they are also investigating other cartridge-style single cup coffee in order to remain competitively priced. In 2005, it purchased Park Manor Coffee, which added two dedicated coffee service routes. Fox Vending doesn’t roast its own coffee, but instead partners with local roasters. Technology was the next major change for Fox Vending. Fox added handhelds and vending management software in 2009 to improve route efficiencies and cash accountability.
Going second generation
In 2000, Fox wanted to step back a bit from the everyday challenges of being an operator, but wanted someone at the top he could trust. His daughter, Jennifer Fox, had just graduated with a graphic design degree and was trying to get a job. He asked her to try out the vending business. Having grown up around the company, calling the long-time service technician ‘Uncle Charlie’ and riding on veteran and award winning route driver Jim Milton’s product cart, Jennifer knew the industry, but had plans of her own. Still, she couldn’t say no to her father.
“I never intended to stay,” said Jennifer. It’s now 13 years later, and she’s the president of the operation.
Jennifer likes to keep Fox Vending unique and interesting, so she recently launched the company’s first micro market after investigating them with the help of a friendly competitor. She chose the Breakroom Provisions market and it has exceeded her expectations.
“One great benefit of having a micro market is the ability to pass on the sales tax to the end user,” said Jennifer. On some products, the sales tax can be 9.75 percent in the Chicago area and consumers don’t realize it’s included in the vend price. Adding it separately in micro markets has been a win for Fox Vending. Jennifer also likes that micro markets have a greater flexibility in what can be sold, since there’s no coil to fit into.
“While vending has become ho hum, micro markets allow for so much more creativity,” said Jennifer. Her latest market product consideration is trendy greeting cards. “Sometimes you need to pick up a card for an occasion,” she said.
The biggest challenge for Jennifer has been the fresh food sales — ordering enough. “I haven’t ever seen anything like it,” she said. Fox Vending uses a professional foodservice company to produce fresh food for the markets, which is different than the food the company provides for vending machines.
It’s a different customer,” said Jennifer. The average price for a fresh food item is $3.00 to $6.00 in the market. From experience she knows no one would pay that in a vending machine. A part-time driver delivers food to the micro market twice a week and handles inventory.
Another benefit to micro markets Jennifer likes is the quick price changes. Fox Vending will often choose to adjust the price of a promotional “product of the week” or reduce a new item by a certain amount to encourage customers to try it.
Micro markets also eliminate commissions, which Fox Vending has been steadily reducing even in vending locations. “Maybe 10 percent of accounts have commissions now,” said Jennifer. “Most are 15 percent or less.”
Also, the higher price point is a plus in markets. Some operators are trying to offer vending prices in micro markets, but Jennifer believes it’s the wrong approach. “It’s our responsibility as vendors to write the book on how micro markets will work,” said Jennifer. And she wants them to be profitable.
Drivers are independent
James Fox recognized early on that vending drivers are a certain kind of person. They have to be self-starters who like people. He’s worked hard to put together a good team for Fox Vending and he’s proud of them.
“They’re all great guys,” he said. Fox Vending drivers are given freedom to choose products for their locations and pack the trucks themselves. The company doesn’t use plan-o-grams or prekit, although it has plans to add prekitting in the future.
Personal customer service
Fox Vending has no answering machines or automated phone system. “You’ll always get a live person to answer the phone — 24/7,” said Jennifer, who employs an answering service after hours. It goes with the company’s slogan “big enough to serve you, small enough to know you.” It’s something Jennifer picked up from her father, who continues to value in-person and verbal communication.
Retrofitting helps save money
Customers always ask Jennifer what’s new in vending machines and can they have it. She considered it a real challenge at first, but she has since started using the Revision Door from Vendors Exchange. Fox Vending rebuilds the vending machine, repaints it in its onsite paint booth and installs a revision door. “For a fraction of the cost of a new machine, the new door makes the machine look, act and operate like brand new,” explained Jennifer.
Cashless payment systems are another technology that Jennifer believes in. “Most machines that leave here have one [a credit/debit card reader],” said Jennifer. She’s noticed they are easier to install now with wireless technology as opposed to 8 years ago when operators were forced to hardwire the systems. Still, like any part of the vending business, Jennifer believes in managing it. Not every machine or location warrants cashless and Fox Vending will often pass on the processing fees to these locations who demand cashless.
Business in a populated area like Chicago is cutthroat, but Fox Vending’s dedication to the customer and business acumen keeps it successful. Jennifer’s strategy for the next 50 years of business is to expand the micro market and OCS business while adding more efficiencies, like prekitting, to the warehouse. Jennifer sees a profitable future for the company she grew up in.