5 Questions to Ask Before Buying Vending Machines
At first glance, a vending machine business seems like a great way to make big money easily. The reality takes more careful consideration and understanding. Before you jump into buying machines and printing out business cards, ask the following five questions.
Am I Building a Business or Just Want Some Extra Cash?
The vending business does not differ much from any other when it comes to the basics of making money. If you get one or two machines and focus on them part-time, you will only make hobby-level money. If you want to build a real income, you need to put the business-level focus, investment, and hard work into it.
How many vending machines do I have to buy and place?
The first question determines the answer to the second. One or two – or even ten – machines are not going to give you a living wage. Starting at this level makes sense, but a successful vending company could have 50 to a few 100 machines deployed all the time. It’s a great business to grow over time as profits increase and you can buy more vending machines.
When all your income rests on the quality of the machines you own, getting the right ones is essential. Some sellers are nothing more than scam artists who promise great machines in existing locations but fail to deliver. Do not listen to claims of big money or set-it-and-forget-it profits. It may be more difficult to get hot locations than you think. I personally know a man who spent $10,000 each on several snack machines said to have pre-placement in busy hospitals. They lied. After they had his money, they vanished, leaving him with an expensive mistake.
Pick a business model that makes sense to you. Bulk vending consists of selling large quantities of products like gumballs and little toys from one machine. Because these machines hold a lot and the products do not go bad, bulk vending allows for more long-term placements without the need for constant restocking. A small toy machine can sit for three months before you service it. Snack and drink vending requires more frequent restocking and servicing. This can limit the geographic area you can cover. The start-up money to do this type of business is frequently higher than for bulk vending.
Unfortunately, theft and vandalism are part of the vending machine business. Not only do people at the locations learn ways of getting out free snacks or drinks, sometimes the owners of other vending machine companies may steal the entire machine. This is rare but is a possibility you should be prepared for. In hot locations, the vending industry includes a lot of competition.