Starting a Vending Machine Business
A vending machine business is a 100% cash business. This is one of the few legitimate businesses that require you to put in very little time and effort, but remember to trust only reputed vending machine manufacturers and keep away from those who make tall claims.
The Concept
Feel like a soft drink while walking down the street? You look for a vending machine, put in a coin, and out pops the can — and someone who is possibly holidaying somewhere has just made a profit from it. That person could be you. The vending machine business is a 100% cash-only business with a nominal initial investment (if you are not going in for the bigger machines) and requires no previous selling experience. As the retail industry grows worldwide, vending has become a brilliant opportunity to increase income without staying at your business premises for hours.
Be Your Own Boss
Starting a vending machine business makes you your own boss: you decide which machine to buy, where to place it, what it sells, and when to service it. The entire success of the business rests on you. A vending machine business will almost never go into a loss, but that does not mean it will give super-profits either — several factors decide how much each machine earns.
Location Is Everything
Suppose you and a competitor both start with one machine selling the same brand of cigarettes from the same model of machine. You place yours outside a gymnasium; your competitor places his outside a pub. His machine will sell out before yours sells a single pack — and if you both switch to health energy drinks, yours will empty first. Same machine, same contents, very different sales. The one-word answer is location — the single most important factor in the vending machine business. Place your machines where human traffic is constant and the machine is visible to the maximum number of people; this is the only way sales will be good, and it also reduces the risk of vandalism that comes with shady, low-traffic spots. Good locations include malls, busy street corners, movie theatres, in or outside pubs and discos, and school premises — the list is endless.
The Requirements
Though the model is simple, there are real requirements. The first is capital: even as a low-cost business, you will need a few thousand dollars to buy the machine and pay the suppliers of the products you sell, and you can tie up with banks and financial institutions for a good finance deal. Two common problems — technical faults and machines left empty for lack of stock — can be avoided with disciplined practices: always keep the contact number of a technician who can come immediately, and hire suppliers located close to your machine so they can deliver quickly. As the owner, protect your business against theft and accident with business insurance and CCTV cameras, and, if possible, a security guard.
Getting Started and What to Sell
Vending machines come in various sizes and models, and today almost anything can be sold through one — soft-drink cans, gum, hot and cold coffee, cigarettes, chocolates, toys, even hot dogs and pizzas. Visit a few established operators in your area to learn where they bought their machines and what problems they encountered, so you buy from a good source. Start small with one or two machines, choose a good spot, and watch how they perform for a month to get a feel for the routine before expanding. You can sell a single product or multiple products depending on the location and your type of customers. When placing a machine in a mall or similar venue, get the arrangement — whether free placement or a share of the profits — in writing, since businesses and staff change hands often.
What to Be Careful Of
In theory the business is simple: buy a machine, place it strategically, fill it, then collect the money and restock. In practice it is as simple or as hard as you make it. Owning a vending machine is not a magic money-making formula. Many advertisements claim average earnings of over $50 per machine per day; people fall for this, dream of buying ten machines, and then find they cannot even cover the cost of the machines after several months. Avoid manufacturers who make tall claims of big earnings from day one — their machines are usually substandard and their service poor. Buy from a reputed manufacturer or dealer; it may cost a bit more initially but is far more profitable in the long run.
The Future
Many retail experts feel the vending machine business will continue to make money for its owners thanks to the popularity of these machines. It has become a lucrative opportunity that promises good income with minimal time investment compared with other businesses. Be sensible, do not get carried away by false claims, take advice from someone you trust when unsure, and always check with your local authorities about applicable taxes and deductions before placing a machine. Do your homework well, and you are sure to benefit with good returns.
