For the simple reason, many people have asked me; “How do you do the vending machine business?”, I am sharing this information. With the hope that I will help someone considering purchasing or starting a vending machine business, they will approach this with their eyes wide open. Put another way, there are many aspects of the business, which I will cover in this post. That is to say, in the vending machine business, like most businesses, there are hidden costs and expenses you should consider, before beginning your journey. There is no intention of encouraging or discouraging anyone from the vending industry. This is solely for your education.
Thirty Five Years Experience
Let me give you a little of my background in the vending machine business. In January of nineteen eighty-four, my brother and I decided to create a partnership, and get into the vending machine business. We pooled our resources and purchased a small vending machine business in Simi Valley California. This was my start in the vending industry. To clarify, I was recently divorced, and decided to work our small vending route while my brother spent the majority of his time earning his college degree. The thought of not having a boss was appealing to me, and I enjoyed my new found freedom. However, very quickly I came to realize, if I wanted to succeed, I now had to work twice as hard as the job I left.
Requirements for Starting the Business
Of course, purchasing an existing business, will provide a head start. However, if you want to start from scratch, that is possible. First of all you will purchase the actual vending machines, but realize there are product costs for the items you will stock in your machines. The normal mark-up for vending is fifty percent. This is a convenience for people, and we are comparable to a convenience store. Because of overhead this margin is basically the minimum. Whenever someone would complain to me about price, I would remind them, we sell convenience. Just go to seven eleven and purchase one can of soda, and after they charge tax, our price will be very close or even less. Oh I almost forgot, all applicable taxes, are included in the purchase price. And, you have to pay that tax, to the state quarterly. One caution should be understood, this is a very competitive business, and most of the profitable locations are already under contract. So you should find and secure the location before purchasing anything.
More Basics to Consider
When we started our company in nineteen eighty four, we only handled candy, soda, chips and cigarettes. Yes you could sell cigarettes in vending machines. In fact, we had cigarette machines. At any rate, what I’m pointing out is, this is only enough to qualify for small locations. The large, more profitable locations, also require fresh food, and fresh food is highly perishable. I will mention here, now the industry standard, has moved away from vending into the “Micro Market” model. This article is not going into the micro market, however if you contact me at: aff.gap1452@gmail.com I will be glad to explain what the micro market is, and how it works.
People Badger the Vendor
Diplomacy is required when dealing with your customers. That is to say, many people are not happy in their jobs, and will take it out on the vendor. I’m not saying things won’t go wrong, but some people can make a big deal out of losing a nickel. Remember, you get to leave, but they have to stay there. Not only this, but often when a company makes a change in leadership, the new leadership will point at the vending company to make a better environment for their employees. This can cause extra unexpected expenses, or loss of the account altogether. I can’t emphasize enough the need for an iron clad contract. Establishing rapport, with the people using your vending machines, is crucial. This is a service business, and if you can’t provide for their needs, they will find someone who can.
Can I make money in the vending machine business?
The simple answer is yes, you can make money in the vending industry. My brother and I brought in seventeen thousand dollars our first year, and sixteen years later we grossed four hundred and thirty thousand. All this was created from reinvesting our profits. However, to get started consider the following facts. You need:
- A truck or van to run a vending route.
- A pallet jack to move equipment around.
- A warehouse to receive and store the products.
- A truck with a lift gate to move vending machines (I started with a trailer)
- A coin sorter and a bill counter (can be done by hand, but takes a long time).
- Spare parts. Coin mechanism, bill validator, and a credit card reader are the bare minimum.
This is just a short list of the things you may not have thought of. When people would ask me; “how do you do the vending machine business”? I would often remind them, “this is a capital intensive business”, so don’t be surprised.
Conclusion
I have Not written this post to discourage or dissuade anyone from this industry. I’m merely sharing some of what I’ve encountered during my thirty five years of experience. These are just some of the things about the vending machine business I can think of off the top of my head. So, if you’d like to speak to me personally, send me an email at: aff.gap1452@gmail.com I will schedule a time for a phone conversation. Receive our Newsletter! Click Here We also have a business opportunity, this blog is created using a proven system. GO HERE AND READ MORE!!!
