Newberry’s Venco Business Solutions
Company Continues Innovation in Games, ATMs, & Street Operations
by Hank Schlesinger
Although John Newberry’s Venco Business Solutions is well known as a sprawling amusement game operation and ATM ISO, the beginnings of the company are actually quite humble. Just out of high school in 1966, Newberry opened a service station and in 1968 wanted a pool table and games.With a $2,500, 90-day-loan, he was in the games business.
However, it wasn’t long before he began to branch out. Starting with that single coin-op pool table he installed in the convenience store section of the service station, he soon expanded into supplying jukeboxes and pinballs to local businesses, becoming a full-fledged street operator. A sideline in selling motorcycles also proved profitable, at least for a while. Although as Newberry recalls, he once traded a motorcycle for a cow that resulted in a $30 net loss. It was, he said somewhat ruefully, the first and last cow he ever owned.
Apparently coin-op proved more reliable than trading in livestock. He continued to expand his route. Today, operating out of two buildings totaling some 17,000 sq. ft. and boasting 54 employees, Venco has become a regional coin-op company. At present, his amusement business is comprised of some 20 routes that extend 200 miles and into five states from the firm’s Bland, Virginia, headquarters.
“We just grew the business from there. I ran it myself for a couple years, then got one employee, and it kept growing,” he recalled. “Then in the late 1980s/early 1990s, I began looking for some diversification and got into background music and the 3M intercom business for fast food locations. We were the first satellite background music dealer in the nation.”
As Newberry explained, he has always tried to position himself and company in the forefront of trends. And while acknowledging this approach doesn’t always work out, it very often does prove profitable.
This desire to be in the vanguard eventually led him into skill cranes in the early 1990s that continues as a profitable machine category on his routes today with more than 1,000 units on location.
ATM Operations & Beyond
Newberry was also an early adopter of ATMs at a time when many in the coin-op industry were hesitant to enter the field. Putting his first two ATMs out in 2004, he located one of them in a Courtyard Marriott hotel and the other in a friend’s convenience store. “That first month, I made $350 off of those two ATMs,” Newberry said. “After that I started putting out more and more.”
It wasn’t long before Newberry took on the role of dealer for OPTConnect, LLC, a leading wireless systems provider based in Utah, then as an ATM ISO (Independent Sales Organization). As an ISO he provides transaction routing, bank sponsorship, and customer dispute settlements for his operator customers while his OPTConnect wireless systems for ATMs, jukes, and point-of-sale (POS) systems have become a favorite among both amusement operators and locations.
His timing for entering the ATM field couldn’t have been better. With more amusement operators integrating ATMs into their routes, Newberry was uniquely placed to address the needs of the operators, as well as their locations. “We literally helped hundreds of amusement operators get into ATMs,” Newberry said. “We know that side of the business. For instance, an ATM in a location will put more cash into their pool tables and other equipment. It will also help an operator secure a location from competition in the future.”
As Newberry is also quick to point out, another, though infrequently discussed aspect of amusement operator running ATMs is the number of transactions they are likely to do in a conventional bar or tavern location compared to typical high-traffic ATM location, such as an airport or hotel. Amusement locations often log far fewer transactions than hotels or airports, making them only marginally profitable for dedicated ATM operators. Conversely, amusement operators who already regularly visit a location to service pool tables and jukes have found ATMs adding to the bottom line with only a minimal number of transactions. That is to say, the transaction profit point for amusement operators is lower than for dedicated ATM operators. The ATM is just another piece of equipment to service in a location, not unlike a pool table or juke.
Venco’s added value also comes in with its line of wireless OPTConnect modems which support other types of amusement equipment, as well as offering a solution for temporary event placement of ATMs at fairs, rodeos, and music festivals that he says often prove highly profitable. In total, the company’s wireless connectivity division currently boasts some 40,000 customers nationwide.
ATMs Going Strong
As to the future of the ATM industry, Newberry remains enthusiastically optimistic. With his estimate that 80 to 90 percent of all amusement operators are now running ATMs, he continues to see room for not only growth but also a bright future. Key among his reasoning is the relatively stable low-price of equipment. However, the math also makes sense according to Newberry.
As far as Newberry is concerned, ATM profitability is a dollars and common-sense decision. “We just purchased 100 new machines to set some new locations and do some upgrading of current machine placements,” he said. “If you have a location doing only 30 transactions per month and giving that location $1.00 per transaction, you’ll still make $60.00 per month on your investment with a $3.00 surcharge. So, you have a $2,000 machine and $1,000 of cash loaded. Well that is a $3,000-dollar investment paying $720 per year. That is a 24 percent return on your investment, the machine should last for years and the vault cash is still yours. I would do that all day long.”
And, too, as he noted, other trends point to a sustained need for ATMs in communities where banks are closing branches and an increasing number of people who are unbanked. As these bank branches close and they scale back on ATMs, they open up opportunities for independent operators.
“A couple of years ago at a national meeting, we saw a screen from the government showing the amount of bills to be printed each year for the next 15 years,” Newberry recalled. “While 50s and 100s were predicted to stay at the same amount, they planned to increase the number of 20s each year. The numbers were staggering. So, the government knows we will be using more cash moving forward and not going cashless any time soon.”
Another area of growth Newberry sees ahead involves co-branding ATMs with banks. It’s an ATM segment in which he has already developed significant expertise and invites inquiries from the industry.
And last, but by no means least, Newberry sees growth in the expansion of services and products offered by ATMs. These include dispensing gift cards as well as acting as centers for Bitcoin and other cryptocurrency transactions.
“I know the industry has changed a lot over the years and it is exciting to me to plan ahead and move forward,” he said. “Tomorrow is a new day, so let’s see what it brings and what we can do to make our company keep growing and keep taking care of our great customers.”
Firmly in Coin-Op
Despite Newberry’s success in the ATM industry it wouldn’t have happened without all the great and loyal customers he has nationwide. “Our customers are the backbone of our industry and we appreciate them very much,” he said. “Without them, business would be much harder. I always tell our customers they can reach me 24/7.”
Today, Venco remains very much a street operation servicing a lot of convenience stores and a lot of restaurants. The routes include the full array of suburban, urban and rural. In total, there are 20 routes with everything under one umbrella, but different managers in each division. To keep track of the sprawling routes, Venco utilizes a wide array of systems that includes specialized software, trackers for its 35 service vehicles and trucks, and, of course, cell phones.
Recently the company has begun moving into the mini-FEC redemption arena.
“Right now, we’re looking to set up some additional redemption centers,” Newberry said. “That means bowling alleys with 12 machines, a pizza place with 10 to 15 machines or movie theaters. The ones we have now seem to be working really well. So, we’re moving forward with card payment in those locations. I think that needs to happen.”
The expansion into the mini-FEC market is a natural undertaking for Newberry, who has built his company as an early innovator. “I’ve always tried to stay ahead of the curve,” he said. “Anyone in business needs to be growing or at least thinking about growing. We’re always looking for the next new thing and to do some different stuff. In fact, I have a couple ideas right now, but I can’t talk about them.”