Starting a vending machine business can be a very good way to become your own boss and work from home. Of course, as with any other business, there are both advantages and disadvantages you need to consider before making this decision, as you’ll see in this article.
The best part of running a vending machine business is that you don’t need any particular skills or experience. Moreover, the entry cost is lower compared to other types of activities and it can run for 24 hours a day, 7 days a week without bothering with personnel costs or client interaction.
As with other low-maintenance activities such as running a water cooler business, vending machines require little dedicated time. You will most likely only need to go service and restock the machines a couple of times per week, and you can do this using your personal car.
However, maintaining the machines clean, stocked and properly running is a must in order to have customers use them. These factors play a crucial role when customers decide whether to choose your machine or a nearby shop.
Location is the first thing you should think about if you consider starting a vending machine business, as it is one of the main factors determining whether you are going to be successful or not. Ideally, you want your machines in places that have plenty of foot traffic such as malls, schools, office complexes, airports, and so on.
You’ll need to sign a lease with the owner of the location to place your machine there and compensate him for using the space and other resources such as electricity.
In the best case scenario, you’ll find a suitable location with no competition. However, most of the times, the existing vendors will have exclusive contracts with the property owners.
In order to protect your machines, be sure to research crime statistics and avoid areas that have high incidents of theft. Getting your machine damaged can quickly turn your profits into losses, so you want to look for highly visible locations, ideally in view of security cameras, or placed indoors.
Selling the right products
Another thing you should consider is the types of products you are going to sell. More importantly, you should match these with the targeted customers and their preferences. For example, a candy vending machine placed next to a health food store is unlikely to be successful.
Profit margins and product lifespan are two other things that you should take into account when planning your business. For example, a candy bar or a sandwich will have different profit margins, but you’ll need to sell the sandwich much faster in order to maintain your profitability.
Market research & plan
Any successful business begins with a plan, and in order to get this done the right way, you might want to take your time and do a thorough market research which covers the things mentioned above.
You can talk to other business owners in the area you are targeting, as discovering that it is already saturated after you’ve spent money on purchasing the machines is not really a good idea.
You can also take your time and see the patterns and behaviors of customers in certain areas that you find suitable for your vending machine business.
Choosing the right machine
You’ve done all the necessary research in terms of location and purchasing behaviors and now it’s time to choose a machine. There are different options available on the market, such as bulk, mechanical, or electronic machines.
The vending commerce is mostly based on cash, and that’s a great thing for most business owners. However, if you place your machine in an area where people prefer paying with a credit card or they are less likely to carry cash, then you might want to go for an electronic machine that accepts this type of payments.
Another thing you need to consider is whether you are going to buy the machines and start from scratch or buy a franchise. As with anything, there are advantages and disadvantages.
If you start from scratch you can enjoy more freedom and maybe face more risks. On the other hand, joining a successful franchise can bring structure and the customer perception you need in order to succeed, but it also means buying the franchise and other additional costs.