If you have spent any time around people in the vending machine business you have likely heard them using the term FIFO (fee-foh) frequently.
FIFO is an acronym for First In First Out and the reason you hear it used so often is that properly understanding and using the principle of FIFO is crucial to profitability in the vending business.
But the correct method of using FIFO and the importance is often misunderstood.
With that in mind we will clearly define how FIFO should be used and why it is important.
What is FIFO? In the broadest sense FIFO means making sure that the your oldest still fresh product is the first product delivered when someone uses your vending machines.
In actual practice it is not as simple as always restocking from the back, but that is a good place to start.
When restocking your machine add the new product so that it will be vended after the product already in the machine.
In a standard cold drink machine it is a simple matter to add the new drinks in the column on top of the drinks already in the machine.
In a glass front snack machine add the new product deeper in the spiral behind the existing product.
Methods can change for different machines but the basic principle remains.
Usually this will be all you need to consider, but there are exceptions.
Properly using FIFO is the surest method to achieving that goal.
FIFO is an acronym for First In First Out and the reason you hear it used so often is that properly understanding and using the principle of FIFO is crucial to profitability in the vending business.
But the correct method of using FIFO and the importance is often misunderstood.
With that in mind we will clearly define how FIFO should be used and why it is important.
What is FIFO? In the broadest sense FIFO means making sure that the your oldest still fresh product is the first product delivered when someone uses your vending machines.
In actual practice it is not as simple as always restocking from the back, but that is a good place to start.
When restocking your machine add the new product so that it will be vended after the product already in the machine.
In a standard cold drink machine it is a simple matter to add the new drinks in the column on top of the drinks already in the machine.
In a glass front snack machine add the new product deeper in the spiral behind the existing product.
Methods can change for different machines but the basic principle remains.
Usually this will be all you need to consider, but there are exceptions.
- Sometimes the product in a less active machine will be older than the product remaining in an active machine.
Keep track of the age of all product and when it is getting close to expiration you might have to move product from one machine to another machine that is getting more customers.
It is better to take a little more time to move the product than to end up having to throw away expired product. - FIFO starts as soon as you buy your product.
Which means you also need to rotate product which you are storing before going out on your route to restock machines.
When loading your vehicle make sure you are taking the product that you have had the longest.
If not you will end up throwing away a case of product that has been sitting in your warehouse even though you have sold multiple cases of that product since you bought that case.
- Properly rotating your product reduces the amount of product you have to throw away, saving you money.
- Properly rotating your product reduces the number of refunds you have to give customers who are delivered stale product from your machines.
Refunds cost both money and time. - Properly rotating your product reduces the number of unsatisfied customers.
Even if they do not ask for a refund they might stop using your machine.
When you consider that some people will use the same vending machines multiple times a week the potential loss of revenue over time can be huge.
Properly using FIFO is the surest method to achieving that goal.