What Type of Vending Machine Business is Right for You?

The first thing you need to consider before investing in a vending machine business is how to secure great locations for your machines. You can read more on the topic in our blog post Choose the best vending machine locations. Once you have done your market intelligence in order to select locations the next question would be what type of vending machines you are going to get to deliver the right products to your customers there. There are various types to choose from, so take a look at some of them below and discover the pros and cons of each one, to determine which suits your needs the best.

Bulk Candy Vending

These machines are stocked with candies like M&Ms, gumballs, Skittles, Mike & Ike’s, or perhaps little stickers or toys in clear globe encasing. 25 cents typically yields 7 to 10 pieces of candy to the customer.

Pros of Bulk Vending Machines

If you are new to the vending machine business, these machines might be a good option for you. The initial outlay is not too high and you can get a machine for $150 to $450, meaning if you do not have a lot of cash to invest at the beginning, you can still break into the vending machine business by choosing bulk candy vending machines. The products inside these machines offer very good profit margins. You might only be paying 2 to 5 cents on a gumball from the wholesale store, but a customer will pay 25 cents to get the same gumball out of your vending machine. You can see how you can get your initial investment back quickly if you have a number of machines and choose your locations wisely.

In many states, if you are selling a product for less than a certain amount you might not have to pay any sales tax at all. Most bulk vending machines don’t have many mechanical parts so you don’t need to be an expert to repair a broken one. Businesses are likely to let you install this type of vending machine because it does not draw on their electricity, and it doesn’t take up much space either.

Cons of Bulk Vending Machines

It might take more time to make a significant income if you are relying on bulk vending machines unless you are operating at a number of locations. You will probably have to cluster them within a small radius to justify the costs of your time and fuel driving to the locations to restock the machines. Sometimes bulk vending machines are stolen because they do not weigh much, so ensure yours are placed in a highly visible area with plenty of foot traffic.

Even if your bulk vending machines are miles away from each other, you can still alleviate the burden from fuel costs and time wasted in the van by leveraging vending management software to get an insight into when a certain machine would need servicing and how to calculate the optimal route to them. Learn more.

Snacks and Soda Vending

These vending machines are often the first ones people think of when considering the different vending machine types because you see them pretty much everywhere - in malls, businesses, on the highway, in the park, and in the highway rest area, to name just a few locations.

Pros of Snacks and Soda Vending Machines

The dollar value of the items in these machines is higher than that of candy vending machines. Instead of making 20 cents on each item purchased you can make a dollar or more. This leads to a better income and you do not have to have as many machines if you want to turn a reasonable profit. These machines are heavier, which is good because it makes them more difficult to steal but can be a problem when moving a machine from one location to another.

However, if you find a viable, established vending location for such a machine, your potential profits can be very good. Your route can cover a larger territory, up to 50 miles perhaps, because you are earning more per machine than if you were to operate, say, candy vending machines.

Again, vending management software can help you maximize sales turnover by carefully analyzing the product mix that you need at each location. Knowing the exact product quantities each machine needs to be replenished with will help you load delivery trucks more efficiently saving you precious time and effort.

Cons of Snacks and Soda Vending Machines

These vending machines cost more than bulk machines, and you will need to spend anywhere from $1,500 to $8,500 per machine, depending on the age of the unit. If it has been refurbished or used, it will cost less than a brand new unit, but should still yield the same results. These machines run on electricity which can deter potential location owners from allowing you to place a unit on their premises. A way around this is to pay the owner a small commission.

Sometimes snack and soda machines are vandalized, especially those in less than ideal locations. It is better to have the unit in a visible location inside a building, so it is not exposed to vandals. Additionally, when a machine is outside it is possible that bad weather can damage the internal components. These large machines have more parts than a bulk vending machine, so you should need to learn how to make minor repairs and also know who to call to repair the machine if you have a major issue with it. The longer it is out of service the less money your vending machine business will turn over.

Other Types of Vending Machines

There are more types of vending machine business than bulk candy vending and snacks and soda vending, but because those are the most popular options we have covered them in more detail here. There are too many different vending machine business options to cover them all, but some alternatives include coffee and hot drinks machines, change machines, toiletries and medical supply vending machines, and office supplies machines. Although snack and soda vending machines are often the first to come to mind, there are a number of different options for people who are looking for specific products in different situations and environments.

A business owner might start out with one or two machines and expand as they start to turn a good profit, or they might prefer several types of the same vending machine, or even different types of vending machines, in a variety of settings and for different target audiences. If you are brand new to this type of business you might wish to consider one of the above options, carefully considering the pros and cons of each, and conducting other research, before making your final decision.

Once you pick the vending machine type that fits your locations best and you have placed them on their spots you have to quickly understand if these are the right machines for the particular locations. What is the “right” machine anyway? Don’t forget, it’s your money and business on the stake and the machine performance analysis have to start from day one. One machine type offering a certain product mix might work well at one location but can miserably fail at another. So how can you analyze and evaluate their performance? How can you track sales of your entire inventory without missing any detail? Is the machine performance good enough or it can be improved? Which are the best-selling items and which are the slow-movers to be taken off? You can get immediate answers to all these questions simply by using a vending machine software. Learn how VendSoft can do all the analysis and detailed reporting for you so you can boost your business efficiency from day one. Start your free trial today!

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