The Vending Machine Business and You
It is true that vending machine businesses have a higher success rate than many other types of business. Their success rates are typically above 80% while other businesses have a high risk of failure instead. Are you a good candidate to be a vending machine operator? Do you have the time and interest to get involved in this type of business and is it right for you? There are choices to make about what type of business you want to have. For example, you can purchase electronic machines, mechanical ones, or bulk vending machines which dispense handfuls of products. The bulk machines are cheaper but they don’t yield as much profits per unit.
So is this a good business for you? Here are some factors to think about before making the decision:
1. Consider your goals.
Do you want to begin something you can call your own, you can build, or which may directly affect your business success? Do you want to enhance your earning potential by getting into the vending machine business? Think about where you want to be in a year, five years, ten years even, and ask yourself whether establishing your own vending machine business could help you to achieve your goals.
2. Do you want to do this in addition to your current job or would you prefer to operate your vending machine business on a fulltime basis?
Each of these options has its own pros and cons. Of course, choosing to do it part-time is the least risky option and you can still keep your day job which guarantees a wage, along with operating the vending machine business. However, doing it this way of course means you have less time to spend on the vending machine business. Fulltime is more risky but then you will have plenty of time to put into the business to make it work. Building your route takes time and patience. You will have time to scope out potential locations, manage a bigger vending machine fleet, and build relationships with current and prospective location owners. All of these mean the potential of higher earnings. However, you will still need funds for a rainy day. Your living expenses need to be met if your vending machine business does not start turning a high profit right away.
3. What happens when you hear the word ‘no’?
You are going to have to ask a lot of potential location owners for their permission to operate your vending machine business on their property, and you will hear more no more times than yes. Of course, the more owners you visit the more yeses you can expect. That is simply the law of averages. You will need to be persistent though. You can’t expect the owners to come to you. You will need to stay positive, even if everyone seems to be saying no to you. Just pick yourself up and move on to the next location and see what happens there. If you really don’t like hearing the work no, consider buying existing routes, which means purchasing vending machines from existing operators. You will want to hear the word yes most of the time, so visit places which currently have no vending machines, such as auto repair shops, car dealerships, beauty salons, hospital waiting areas, and even large office complexes. The machine should go in a high traffic area like the front of a store or in a waiting area, to maximize profits. The better you are at knowing where to go and who to speak to, the lower your risk of hearing the word no too often.
4. Are you good with other people?
To do well in this business you need to sell yourself to the location owner as a reliable, upstanding, reputable vending machine operator, and convince the owner your vending machine business is better than any others he has used in the past or had experience with. Tell him the benefits of your particular vending machine business and how it stands out from the crowd. The better you are at convincing people about the benefits of choosing your business, the more success you should have. Once you have contracts, you will need to look after the owners and also the vending machines. Ask the owner what types of snacks, soda and candy they want, be professional and value their input. Keep the vending machines fully stocked and visit the locations once or twice a week to ensure all is well.
5. Do you know anyone in the vending machine business already?
If so, you should reach out to them, because they will be a good resource and will want to see you succeed. (Of course this is not the case if you are going to be in direct competition with them!) You might be able to pick up valuable industry tips and tricks which you would otherwise have to discover on your own, and they will also be able to tell you about any mistakes they made and any potential pitfalls you should watch out for. Use their advice to maximize your own success, rather than trying to imitate their business model. What worked for them is not necessarily the best path for you to follow.
6. Can you fix things, and are you good at mechanics?
Vending machines sometimes break and need to be repaired. When they are broken or fixed, you are not making money from selling any products. Fortunately most breakdowns are infrequent and are simple to fix. You must have the desire to understand the problem, roll up your sleeves and be willing to tackle the problem. This will save you the expense of finding and hiring a vending machine expert. If you don’t already know how to repair a vending machine, take a training course. There are different ones to choose from and you will be saving money which would be spent getting someone else to do it for you.
7. Setting up a new business involves unknowns, and there are no guarantees.
Everybody has their own strengths, weaknesses, circumstances, and operating environments. Perhaps you will enjoy immediate success but then have a few setbacks, or it could be you take a while to experience success but suddenly it begins to happen. If you ask questions from knowledgeable operators, learn from others and learn from your own mistakes as they happen, you probably have a good chance of success. All businesses have ups and downs though, and you should expect some days to be better than others. How you respond to these challenges greatly impacts the potential success of your vending machine business. Consider the above points to decide whether you are a good candidate for this type of business.
You can find additional information in our guide How to start a profitable vending machine business and HUMAN’s Guide on How to Start a Vending Machine Business.