Vending
A lucrative, time-tested business
By Gurmeet Mattu
Supplying and servicing vending machines can prove to be profitable if the basic rules of business are followed. These include having the right product or service at the right place at the right time, and building a critical mass of machines doing an adequate amount of business before your initial capital runs out.
Where a vending business is concerned, the requirements break down to identifying a suitable venue (one where a suitable number of potential customers are available) and a suitable product for the venue (e.g. candy vending machines in a school, soda vending machines in a sports club). You will also require premises to store your products and a vehicle for transporting machines and to refill machines.
Vending Machines
To source your machines is relatively simple - most candy, soda, coffee and other manufacturers will have a division dealing with vending, and all it takes is a phone call, a meeting and an acceptance of their terms and conditions.
Most suppliers will permit you to fill a limited space in their machines with other suppliers’ products. This is vital as you can often source products from wholesalers at much lower prices than you get from the manufacturers, if you do a reasonable amount of research.
Tying you down in this way limits your potential profit, but these manufacturers do give you some confidence that they will service their own machines. Machine owners will also charge you a rental fee for their machines.
Used vending machines are available, but these must be taken with an element of caution. Mechanically they are simple but the electronics are probably beyond the layman and parts may be difficult to source. Having said that, most problems which occur (such as jams) are simple to repair and even with electronic machines, a simple reboot is often all that is necessary.
Venues
As stated above, the venues selected must have a certain amount of footfall to be viable. These would include schools, factories and depots, sports and recreation facilities, hospitals and literally anywhere where a large mass of people are likely to congregate.
In most cases a letter or phone call outlining your proposal to site your machine should lead to a meeting with potential site owners. Your presentation should stress the benefits to the site owner of siting your machine there.
Some owners may require a percentage of turnover or profit as remuneration. Be prepared to negotiate on this, but remember to include room for these fees in your budget. You should also negotiate a clause allowing you to install your machine for a trial period to ascertain business levels.
The Business
Your working day as a vending machine business owner could consist of the following:
- Refilling machines already on sites
- Emptying cash and doing banking
- Ordering stock from manufacturers
- Researching and / or purchasing discounted goods from wholesalers
- Searching for new venues
- Contacting / meeting with potential venues
- Completing relevant paperwork
A vending business opportunity is viable if the above information is taken into consideration. Remember, you must find fresh venues that do not have machines sited there already, and you must have a deal with the machine owners that allows you to make a reasonable profit and gives you the right to source your own products.
Your agreement with the site owners must be based on the premise that you are providing a service to their staff or visitors, and are not solely out to make the owners a profit. It would be quite easy to get squeezed between machine owners and site owners, effectively meaning you were working for nothing.
There is no way in the world you can get rich quick with vending machines (unless you pull a deal with Disneyworld!) but hard work and application could turn this into a long term, successful, business with a minimal outlay.
