blank image

Starting a vending business

A man steps into a grocery store intent on getting some food and few essentials, when behind him a voice calls out, "Do you want to hear a joke?" The source of the voice turns out to be a mechanical bird, and this bird is selling gum and jokes from a machine. It's funny to think of, but this is how somebody is making their living.


Starting your Vending Machine Business


The first half of the vending machine business is pretty easy to comprehend. You own a machine that sells a particular product, when people buy the product, you make money. Getting that machine in the right location is the second half, and it's the half that makes the difference between really cashing in, and just getting by.


The first thing to understand is that while this is a relatively easy business, it's still a business, and you still have to sell. Selling in this case means building relationships with other businesses, so that you can place your vending machine at a particular location. In some cases this will mean the dreaded cold call, the two most hated words in the sales industry.


A cold call is where a sales person tries to make contact with a potential customer, having never had contact before. The success rate of the cold calls can be pretty low, so trying to use the advantages of a prior relationship is preferable. For example, if you have a friend who works at a prime location and they put in an initial call, you are now making contact with some prior link in place.


One Quarter At A Time


An aspect of this business that you should consider is profit margin versus brand awareness. Gumballs, for example, have a very high profit margin, so that on a per unit basis they are a great investment. Coke or Pepsi, on the other hand, have a tighter margin, but you get the benefit of selling a product people know about, which in turn impacts your sales.


Shelf life is an important part of the equation as well, because spoils cut into profit. Let's say, for example, that you are selling peanuts from a particular vending machine, with a profit margin of fifty cents per unit. If you can keep your spoils below ten percent, you're doing great; above that, you aren't making much money.


A Business With A Plan


The bottom line is, well, you need to have a bottom line. The vending machine business has to be viewed like any other business, with income measured against cost to assess profit. Yes, the business is simple compared to many other models, but anytime you put money into a venture, there is risk involved. Finally, the single most important aspect of your business is maintenance. On a different day at that same grocery store, the man came in and the bird said nothing. Keeping fresh stock, in a machine that works, is simply a non-negotiable aspect of making your vending business work.


Other Articles

  • Wide search before logging...
  • May not be enough in certain...
  • Best sources that acts as...