Rolling your way to profits.

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.

No matter where you are, you'll need to secure a business operator's license from your local licensing department. If you live in a state that enforces sales tax, you'll need a seller's permit, and if you sell perishable items (food), you'll have to obtain a health or food permit from your county, city or state health department.

The cost of a business license and other permits varies according to your location, but can range from $10 to $250. "It just depends on your township," says Stockberger. "Some townships say that if you're a war veteran, you pay nothing. Others may charge a yearly fee of $100."

According to Stockberger, some states will also require that food vendors take and pass a food preparation and handling course before being granted a license. "The course is designed to teach vendors the appropriate way to handle food so that they don't pass on salmonella, E. coli and other bacteria to their customers," he says.

Not all jurisdictions require a food handling course. Contact your local health department for details. Some enforce a mandatory two-week course that meets two to three nights per week. Classes are generally held at a local university and cost about $35-$60.

LOCATION, LOCATION, LOCATION 

Choosing a good location -- typically one with high foot or vehicular traffic -- is one of the most important factors in getting your business off the ground.

There are a number of places where you can set up your cart or kiosk. In certain parts of the country, including New York City and Philadelphia, the street is the most popular venue for daily locations. But you can also situate your unit in a shopping mall, train or bus station, airport, hospital, sports arena or even outside a major department store. Many vendors also work special events, festivals and parades.

While the rule of thumb when choosing a site is the more people, the better, you must also consider the proximity of the competition, your visibility and accessibility to customers, and the need for your product at a particular place.

If you're a street vendor, something as simple as being on the right side of the road can make all the difference. "A lot of people make the mistake of setting up on the street and they don't find out that they're on the wrong side until breakfast or lunch time, when everyone exits the building going in the opposite direction of the cart," says Stockberger. "So when you're looking for a spot, just bring a folding chair, sit in a particular location and watch the number of people that pass by and where they pass by for at least two weeks," he says.

If you plan to set up a kiosk in a mall, first find out if the mall you've chosen houses modular units. Call the mall's management office for details or simply stroll the floors of your favorite shopping center. If you don't see any kiosks, chances are they're not permitted.

When Lucius Felton, owner of Safari World Gift Shop in Los Angeles, began searching for the perfect spot for his kiosk last February, he and his wife, Daba Ndoye, left few stones unturned.

"We toured several malls in the city and outlying areas to see which had the most to offer," says Felton, who sells a variety of items, including aromatherapy products, jewelry, sunglasses and stuffed animals. "Plus, we spent an entire year doing specialty lease arrangements with two dozen malls in Southern California. After that we chose the mall where we felt we would be most successful, and that was the Baldwin Hills Crenshaw Plaza." Safari World's current revenues are nearly $10,000 per month.

When Clark began searching for a daily location for her hot dog cart in late 1987, she found the perfect spot at the Compton Department of Motor Vehicles. It offered just what a street vendor needs to be successful: heavy and constant foot traffic.

However, Clark discovered that it was illegal to set up a cart anywhere in the Compton area. Rather than scrap the entire business and trash a $2,500 cart she spent a year paying for, Clark decided to challenge the law.

After four months of debate with the city of Compton, Clark persuaded officials to rewrite legislation to permit vending carts. "I argued several points," says the pre-law student. "I pointed out how legalizing carts would help to minimize the number of illegal vendors and made reference to how permitting carts would help to pour more dollars into Compton and other black communities throughout Los Angeles."

Today, vending carts are permitted in Compton. In fact, Los Angeles County subsequently adopted legislation similar to that championed by Clark in Compton. However, carts are not permitted on public sidewalks, only on private property. Vendors are required to have a business tax registration certificate, health clearance, a seller's permit and permission from the property owner. Also, all carts must be at least 200 ft. away from one another.

Street vendors are required to rent space in a commissary for the storage and maintenance of their carts. You cannot simply hook the cart to the back of your car at day's end, drive home and park it in your garage or driveway. Once a month, health inspectors will visit the commissary to examine your cart for cleanliness, so don't just park it and leave it -- care for it. If you're found in violation of health codes, you could be fined $100-$150. If you receive multiple violations, you could be shut down completely. The cost to rent space in a commissary is about $50-$100 per month. To find one of these facilities, look in the Yellow Pages under "commissary" or "caterer."

SELECTING YOUR MONEYMAKING MACHINE

Once you know that carts are allowed, decide which type you would like to own. There are hundreds of varieties designed to hold everything from food to T-shirts, jewelry or small electronic devices. From Dogs ... to Riches: A Step-by-Step Guide to Start and Operate Your Own Mobile Cart Vending Business (MCC Publishing Co. see resource box) self-published by Clark, lists over 119 different types of vending cart businesses, individual start-up costs and average profit potentials. Clark's company, Mobile Merchandising Association, also manufactures carts.

When choosing which type of vending cart business you would like to operate, also decide how you would like your cart designed. Vending carts are custom-built. You cannot purchase them in a hardware store or other retail outlet, so consider every specification, ranging from the size of your cart to the number of shelves to any cosmetic elements, such as mirrors, before soliciting the services of a cart manufacturer.

"Make a simple drawing or sketch showing how you want your unit to be laid out," says Morris, whose company manufactures pushcarts, trailers, cars, trucks and kiosks. "I can send you 1,000 pictures, but it might be picture 1,001 that you want. But if you tell me `I want a cart that is 3 by 6 ft. long with a canopy and a steam table,' I have something to go on," he says.

If you're going to set up in a mall, you may not need to have a unit designed. Some malls provide kiosks for vendors. And most malls and major shopping centers will require that you commission an architect to design your kiosk to the specifications laid out by management, or lease it directly from the mall. Custom designing a typical-size kiosk, say one 8 by 8 ft., could cost an average of $20,000 or more.

Vending carts and kiosks come in a variety of sizes. They start at 2 by 4 ft., and go up. "There are many combinations, including modular buildings, trailers that are up to 40 ft. long, and drive-up buildings with serving windows and walk-up windows," says Morris.

Depending on the unit, design and manufacturing can take anywhere from one to six weeks. As for cost, prices range from $2,000-$60,000, depending on the size of the cart or kiosk and where you live. "There is no standardization in the vending cart industry," says Clark. "Each region sets its own prices, so a hot dog cart in California may cost you $2,500, but in New York City the same cart might start at $4,500."

Total start-up costs for a vending cart business depend on the type and size of cart you choose and your location, but can run from as low as a couple thousand dollars to as high as $50,000. This includes the cart, your license and/or permits, inventory and other operating expenses such as rent.

To locate your perfect mobile merchandising unit, search the Internet. Using such search engines as Yahoo (www.yahoo.com), America Online (www.aol.com) or Web Crawler (www.webcrawler.com), type in the words "vending carts" to access a laundry list of cart manufacturers. You can also check the Yellow Pages under "vending" or "carts" or the Thomas Food Industry Register, a directory that lists over 150,000 companies, including equipment manufacturers.

Don't go it alone when building your unit. Food carts, in particular, must meet certain health and fire codes before they are licensed and approved for sale, so seek professional help.

MALL MADNESS 

As for mall vendors, the requirements for operation are much stricter. For starters, you must operate your cart during the mall's normal business hours. This can include all weekends and all holidays except Christmas and Thanksgiving. Most major malls charge rent based on cost per sq. ft. The amount varies depending on region, but can start at $20 per sq. ft., with rents increasing during such peak months as November and December.

Malls require that vendors pay them a percentage of their sales, anywhere from 4%-8%, again depending on the mall and its location. And most require that you lease your cart or kiosk directly from them in order to ensure a consistent look among vendors. Most also must approve the layout of your cart and how your merchandise is displayed.

To gain entry, you must first fill out an application at the management office. But this does not grant you immediate access to the floor. As opposed to street vendors, who can set up virtually anywhere and at any time as long as it's permitted, mall vendors are granted access on a first-come, first-served basis, so it may take several months to years after you file the initial application before you actually set up your cart.

"When you're trying to get into a major mall, you don't have a choice where to set up. You have to go where they put you," says Moore.

But although there's a level of control that you give up when deciding to set up in a mall, there are advantages as well, she says. "By being in a mall, you have a captive audience," she says. "There are always people in the mall -- when it rains, when it snows and when it's hot."

MARKET WITH FLAIR

Now that you've hung out your "Open for Business" sign, you've got to keep the cash register ringing. Savvy cart vendors rise before dawn to prepare their stock, load their car, truck or van and haul their cart to their daily destination, rain or shine. They get to know their customers by name and often put on a show to attract new clients and keep the current ones coming back for more.

This can be especially difficult given the amount of competition from major restaurants, department stores and other specialty outlets, but there are certain marketing strategies that you can use to keep business rolling your way.

Many vendors offer special promotions, such as the traditional "buy one, get one free" policy. Others use gimmicks, such as dressing in funny costumes or performing mini-sideshows to attract potential buyers. "My employees wear tuxedo-style shirts, which seems to be a big hit with our customers because it says we give service with style," says Clark. Today, she owns five vending carts -- three of which she leases to other vendors -- has six employees and earns $100,000-$180,000 annually.

It's difficult to successfully sell a product from a 12-ft. kiosk when a well-known 35,000-sq.-ft. store that carries the very same item sits right next door. But it's not impossible. Moore competes with such names as Fashion Fair, Estee Lauder, Clinique and other department store cosmetic lines every day, but she has staying power because of one thing -- superb customer service. "I don't have major capital to advertise, but you can always come to my store and have somebody help you, someone who knows the line and can demonstrate it," she says. "Then we'll call you later and ask you how you liked the product. I don't know many stores that will do that."

Moore, Clark and the Feltons provide classic examples of how to turn modular merchandising units into sturdy businesses: set your cart or kiosk directly in the line of traffic, one-up the competition with stellar service and put on an attractive face for the public. Once the smiles are in place, you're all set for success.

Need a cart, supplies or just some advice on how to get started? These resources can help get you rolling.

All A Cart Manufacturing Inc. 700 N. James Rd. Columbus, OH 43219-1840 614-237-3767 800-695-CART e-mail: [e-mail] www.allacart.com Design and manufacturers multiple-use pushcarts, trailers, cars, trucks and kiosks.

Mobile Merchandising Association (MMA) P.O. Box 54472 Los Angeles, CA 90054 310-967-4416 e-mail: [e-mail] This organization educates people about the mobile merchandising industry. It also publishes a newsletter and holds an annual vendors' expo.

Push-Cart International Inc. 621-623 Van Houten Ave. Clifton, NJ 07013 973-773-4401 e-mail: [e-mail] Considered the "world's largest push-cart company," it rents and sells custom-made carts.

The Vending Connection 4303 Blue Ridge Blvd., Suite 543 Kansas City, MO 64133 800-956-8363 or 816-356-1534 e-mail: [e-mail] Provides a number of starter kits and guides to launch your own vending business. The Vendor Buyers Guide, one of its publications, lists over 1,500 suppliers of beverages, candy, equipment and vending carts.

From Dogs ... to Riches: A Step-by-Step Guide to Start and Operate Your Own Mobile Cart Vending Business by Denise Clark, MCC Publishing Co., 310-323-5557, $43.95 (includes shipping and handling)

Thomas Food Industry Register, Thomas Publishing Co., 212-290-7341; $215

This directory lists over 150,000 companies, both American and Canadian, and is indexed by company, product, service, location and brand name. It also includes food processors, equipment, and supply and service manufacturers.