How Do You Start a Vending Machine Business?
It’s hard to come by a lucrative and manageable business nowadays; with inflation rates soaring at an all-time high and the market looking to be volatile, these are stressful times. There is one industry that has been steadily rising since 2012. As people’s lives get busier, they’re looking for convenience and time-saving options. You can capitalize on this by creating a vending machine business.
Vending is looking to be a very profitable business. The Automatic Merchandiser State of the Industry Report states that 2018 was a record-breaking year, with mega vending companies raking in 65.2% of the revenue growth for that year. However, it was small vending companies that took the biggest win, according to the report, because of higher profitability. The high profit can be attributed to the minimal staffing and lower technology costs to handle their customer base and locations.
At Bottoms Up Vending, we understand the value of this business and highly recommend doing market research and learning about the industry. This article will help you sort out the advantages of putting up a vending machine business and the ways by which you can start off and hopefully prosper and reap the benefits of your business.
What are the Advantages of Operating a Vending Machine Business?
- Low cost for startup – Vending machines have a low startup cost because banks and firms can finance them. If you want to have your vending machine serviced by a vending supplier, you won’t need any other equipment. You might need to buy a vehicle to service your routes if it’s a self-service.
- Flexibility to set your schedule – You have the freedom to plan when to restock your vending machines or collect your money but generally speaking, you can put these times to whenever it is convenient for you and your clients.
- Easily change the product selection – Supposing a drink isn’t selling well in your beverage vending machine, you can change that product and replace it with a different product that may sell well.
- Controlled expansion and growth – While the return of investments can happen in a couple of months or even a year; you can ultimately decide when to expand your business by gradually adding more vending machines to your routes. You can adequately set the pace for how quickly or slowly you want to see business growth.
- Simplicity and ease of management – Once you’ve set your routes, secured your contracts with the business locations, and placed your vending machines, managing it can be relatively simple. The significant factors you must consider are the maintenance and repair of the machines, restocking them as needed, and collecting the money. All of this can be done with minimal staffing, guaranteeing more profit. Administrative tasks can also be handled relatively easily and require financial transaction records, tax payments and reports, and customer issues.
What are the Ways to Get Started?
- Buy an existing vending business – While this is a fast track to getting into the industry, it comes with risks and may need an eye for detail to confirm its legitimacy. Asking questions such as why the previous owner sold the business in the first place is only fair to avoid potential issues while running the vending industry. It’s also a good idea to check the contracts and the machines for any tampering that may harm the business. This also comes with benefits, as you’re guaranteed a revenue stream and customer accounts, but it’s still advisable to be wary.
- Buy a vending machine franchise – At the administrative and operational level, this is a good choice since the operational guidelines, rules, and regulations are already set in place, and you just have to follow the standards set in place by the franchisor. The only drawback for this might be the price of the franchise itself. They might also ask for a percentage of the profits or a monthly fee upon buying the franchise. With an established franchise, this might not be a problem since your business is sure to be gaining some profit, but smaller franchises, while cheap, can be risky and may not be sustainable for the long term.
- Create a startup vending business – This is the riskiest way to start your vending machine business since you’re starting from scratch. On the positive side, this means you can tailor your vending machine business to your liking and create your brand, mission, and vision. This, however, takes a lot of work and means that you’ll be doing everything, such as sourcing the machines, looking for locations, determining routes, buying supplies, maintaining and repairing, and so much more. If everything is handled correctly, you can gain the most profit from this setup and establish a name in the vending machine industry, such as Bottoms Up Vending.
What are the Steps To Make Sure You’re Starting the Vending Machine Business Right?
- Know what you want to sell – Setting up the business is the easy part, but the nuances, such as deciding what to sell and where mean working and researching more to determine if there is an opportunity to be profitable. For example, food and beverage vending machines such as coffee, water snacks, and carbonated drinks can sell anywhere. Other products are only targeted at a particular customer segment, such as toiletries for women, energy drinks for gym-goers, and more. Doing your market research and scouting the locations could be a game-changer once you start your vending machine business. You can more about Vending Machines we offer here.
- Know where you’ll buy your vending machines – There are many places where you can buy your vending machine, and these options have different costs attached to them. These places include manufacturers, wholesalers, online sellers, second-hand sellers, and lessors. Ensure that your seller is reliable and has a good track record with their vending machines. Be sure always to read the fine print and hold off with signing any agreement until you’re sure that there are no issues.
- Know the features you want for your machines – There are multiple options for vending machines but note that not all features may be present. This is because not all vending machines are built the same, depending on your customer’s needs. Vending machines have the following features to choose from:
- Multiple payment options
- Voice and touch screens
- LED lighting
- Graphic brand wraps
- Surveillance for security purposes
- Applications/software for easy restocking and maintenance
Starting any kind of business is scary, but with the proper knowledge and strategies, you can allow your business to prosper. The same applies to a vending machine business. So long as your goals are realistic and attainable, your business will have profitable investment returns in the shortest time possible.