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Starting a Vending Machine Business

By Edited Nov 13, 2013 0 0
Vending Coke Bottles

So why start vending?

Although forcing many small business to shut down, the financial recession has also sparked a new wave of small business start-ups all over the world. Many full-time employees have had to come to terms with downsizing/redundancies in the workplace. Where becoming self-employeed or starting one's own business used to appear as risky, the loss of job security has made the prospect much more appealing in recent years.

Vending, in particular, has always been an attractive option for many entrepreneurs as it represents a source of semi-passive income and offers owners a reliable stream of income which is highly customizable and its results are easy to track week-to-week. You don't actually have to be there for a sale to take place, and customer service is usually done through one on-site representative such as a manager or administrator instead of having to deal with dozens of complaints each day.

It's a unique business model well worth exploring. Here are just a few of the things to consider when starting your own vending machine business...

What type of machine?

Vending comes in many shapes and forms, and you could use one or any combination of these machines:

  • Snack Machines
  • Beverage Machines
  • Bulk Candy Machines
  • Cigarette Machines
  • healthy/fresh vending
  • Restroom machines (selling condoms, hygiene products, etc.)
  • Claw/Prize Machines
  • And many more!

What's your budget?

Money's tight. Borrowing/financing can be difficult, so have a clear idea of what start up capital you are willing to use/risk in order to get your business off the ground.

Vending machines vary a lot in cost depending on the size, quality and type of machine, so you need to have an idea of where you can start. If you had, for example, $1000 to start with, you could either go for a single, used snack machine, or create your own route of 8 or so gum ball machines which you'd service infrequently.

It's up to you, but it's important to know what you can afford as this will inform what sort of business route you can create at first, and this will help you determine your business strategy.

Who's your market?

A well placed vending machine means a happy vendor. Placing your machines is everything, and there will be some serious competition for places with the heaviest foot-fall. In addition to that, you'll need to know what types of products to stock to appeal to the traffic that does come through. For example, if you had a cigarette machine and a bouncy ball prize machine, one would clearly perform better in a bar, and the other would be better near a preschool.

In the same way, a snack machine stocked with healthy choices such as granola bars are usually appreciated more in an office environment, whereas factory/warehouse machines tend to sell chips and cinnamon buns better.

Conduct your market research and contact managers to see if they'd be interested in having your machine on their premises before you buy any machines in the first place.

Get Licesned

Every state requires you to have a business license and file taxes in order to operate a business. On top of that, many sates stipulate that you need a vending license displyed on all your machines in order to place them and begin taking revenue from them.

Check with your state's relevant licensing services to find out if it's required for you, and don't skip the leg work. If you're caught out (which your competitors will be only too happy to make sure you are), then you could face penalties which wipe out weeks of profit instantly.

Be Adaptable

You need to be prepared to experiment, evaluate and repeat several times over in order to succeed in vending. People tire quickly of the same stock and begin to lose their taste for "junk food", so you ought to be trying new things, see what sells and stock more of the same. It's about "smelling what's selling" and building on it.

In the same way, you need to always be prepared to look at underperforming machines and decide if the location is unsuitable. You may have set it up with a contract to service that location for a given amount of time, and it's always a good idea to stick to your contracts where possible for the sake of your reputation (who knows... you may want to place a machine there in the future), but be prepared to pull machines out of unsuitable locations when necessary.

Vending's a great business. You get to be the boss, see what works and capitalize on it. You can enjoy the freedom from the office, meet new people on your route and know you're providing a valuable service. If you're completely new to it all, startvending.org offers a good range of advice for novice vendors and those looking to begin a business or take up a job in vending. It's also worth contacting other vendors (many will have their numbers on their machines, especially if your state law requires it) to see how they feel about vending and to gain some insight into whether it's a business for you.



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