Rolling your way to profits

Black Enterprise, Nov, 1998 by Wendy M. Beech

Using vending carts to sell everything from hot dogs to handbags has become big business. Here's how to turn your modular merchandising venture into a moneymaking machine.

Vera Moore, owner of Vera Moore Cosmetics, discovered the true meaning -- and beauty -- of mobile merchandising after locating her 150-sq.-ft. kiosk in the Green Acres Mall in Valley Stream, New York. But it took a while. In 1982, after waiting three years to obtain a spot, Moore, who sells a complete line of skin-care products and cosmetics, was told she could open an in-line store (a regular retail venue in a mall) next to the food court on the second floor. Then, in 1992, when a major conglomerate bought out the entire second floor, Moore had to move.

"When the mall operators shifted people around during the renovations, they put me downstairs on the first floor," says the entrepreneur. "But it was a blessing in disguise. I went from a second-floor store in the back of the mall to a free-standing kiosk on the first floor with high visibility. Now I'm right in front of Sears and the traffic is great."

Doing business from a kiosk is not a bad way to make a living, says Moore, the first black tenant in the history of the mall. Today, she earns nearly $400,000 annually, come rain or shine.

It can also be lucrative to run your business outdoors. Ask Denise Clark what her first day in the vending care business was like on New Year's Day 1988, and she'll have but one word to describe it -- profitable.

Waking at 3 a.m. on a Saturday, Clark, who lives in Compton, California, loaded her two-door yellow Volkswagen with bags of buns, cases of canned sodas, packs of hot dogs, a freezer chest of ice, and containers of mustard, ketchup and relish. She then hitched her 5-ft. frankfurter cart to the back of her VW and headed for Pasadena to sell at the Rose Bowl Parade.

"I was driving about 30 miles an hour trailing my cart behind me," recalls Clark. "I think I got cursed out in every language because I was driving so slow," she laughs. But arriving before most of the competition, Clark readied her cart for a crowd of some 250,000 people. And before the parade even started, she had not one hot dog or cold soda left. "It was incredible," says the 30-something vendor. "I made $3,178 that day."

From New York to Los Angeles, thousands of people like Moore and Clark are rolling their way to profits in the vending cart business. They sell everything from hot dogs to handbags to handmade scarves from simple pushcarts on street corners and fancy kiosks in malls, airports, train and bus stations throughout the country.

But starting and running a vending cart business is not as easy as it may look. "A lot of folks think that they can just buy a cart, roll it up to any location and start collecting money," says Jeffrey Morris, president and owner of All A Cart Manufacturing Inc., a vending cart company in Columbus, Ohio. However, it takes more than just a few sandwiches and sodas to turn your modular unit into a moneymaking machine.

First, you have to understand what makes the wheels really turn. Then, with the right marketing plan, an attractive cart, a super location and a great big smile, the profits will start rolling your way.

ON THE SUNNY SIDE OF THE STREET

For years, street vendors have been looked upon as second-class businesspeople who peddle goods for a quick buck. But the vending industry, which includes pushcarts, kiosks and vending machines, has become a well-respected form of enterprise that currently generates over $27 billion in sales annually. According to a study published by the Illinois Department of Commerce and Community Affairs in Springfield, street vending sales in New York City, Philadelphia and Washington, D.C., alone are estimated to total $1.7 billion per year.

"There's a lot of money to be made in this business and it's not just in the major metropolitans," says Bruce Stockberger, president of Stockberger Marketing in North Palm Beach, Florida, a firm specializing in mobile merchandising system marketing and sales development. "I know guys who have made $75,000-$85,000 a week selling at the Ohio and Texas State Fairs. They just take 40-ft. trailers, cut the sides out and sell hot dogs, sausages, beverages and pizza." While those numbers certainly look tasty, it's more realistic to expect to average $200-$800 in gross sales per day.

Minimal start-up costs (less than $5,000 in some regions), a quick return on investment (most pay off in a matter of months, if not weeks) and flexibility also make vending an attractive start-up venture. And if one spot is unsuccessful, you can always pick up and move to another with little inconvenience.

RESEARCH BEFORE YOU ROLL

Before you purchase that brand-new cart, first check the rules and regulations governing mobile units in the area where you want to do business. Most cities and states permit vending carts, but the law may impose limitations on the size and type of cart you may own and who is allowed to vend. In Atlantic City, New Jersey, for example, only war veterans are allowed to operate vending carts. Some jurisdictions ban vending carts altogether. If public vending is not allowed, private vending opportunities usually exist on university campuses or by gas stations. You may also find that only a certain number of licenses are awarded in your area at any given time and are issued on a first-come, first-served basis or through a lottery system.