If you were looking for new business opportunities that do not require a special skill and want to do it partially, vending machines are a good option.
According to the latest statistics on vending machines
- Vending machines generate more than $ 8 billion a year.
- The vending machine industries generate more than $ 70 million in annual profits.
- The vending machine business is managed with cash since 2 out of 3 vending machines only handle cash, and the rest accept other types of payments.
- Fifty percent of the sold vending machines were destined for cold drinks, such as soft drinks / soft drinks, water, and juices.
If you had in mind the vending machines for chocolates and soft drinks, I advise you to rethink it. Well, healthy snacks outsell chocolates and other sweets. Also, the new pizza vending machines are an excellent option and are in great demand.
Advantages of a Vending Machine Business and Requirements
– It is an expandable business: You can start with a machine and expand as you and your time allow.
– Low investment: In addition to providing financing for vending machines, their investment costs are very low compared to physical businesses. You also do not need to rent any premises to undertake.
– It is a simple business: Well, once you locate the machines, all you have to do is maintain and re-supply all your machines. And obviously, collect the money they have generated.
– Flexibility: The vending machine business is ideal for a family group, as it is a very easy business to do, and anyone in the family can do it.
To start this business, you will only require small capital and a good physical condition to replace the different machines. If you already have to start a vending machine business, then here are some things to keep in mind.
Plan Your Vending Machine Business Before You Begin
As with all businesses, you must carry out prior research on the market where it will be launched and plan everything to succeed. There are many ways to start a vending machine business, and each has its main advantages and disadvantages.
1. Start from scratch: Well, you can buy the machines and find a location for your vending machines. This option offers you a lot of flexibility when it comes to the undertaking, as you can start with just one machine and expand if new business opportunities arise. But if you choose this path, you will have to acquire and buy the vending machines and all the locations aside from business.
2. Buy a vending machine already located: The good thing about this option is that you can see the profits immediately, but you must find out why the owner decides to sell his machine. If someone sells your vending machine, it may be because it is no longer profitable or has other businesses, but you should make sure it is profitable.
3. Buy a vending machine franchise: This is one of the easiest options since you can acquire an already established model to sell a product. The most common thing is that only a small amount is invested in obtaining the machine, and then the brand takes a monthly percentage on sales.
No matter which steps you decide to get your vending machine, you will have to create a business plan. It should include how much capital you need, if you will finance it and if you need a partner or investors.
You also have to add everything you find out about the market, its pros and cons, into the business plan. The number of vending machines that exist in your area and if it is feasible to place a machine in that area.
Find locations for vending machines.
Location is the key
Like any other business, its location is a very important part since location contributes to a successful business and even more so if it is vending machines. For this type of business, you have to look for places with high pedestrian traffic, such as shopping centers, offices, schools, airports, etc.
Although you can put your vending machines where there are other vending machines, the ideal would be that you are the only one in that area to have more customers. And when you find the right area for your business, you need to make sure that the products you offer are the right ones for that area.
Theft and vandalism
Something to keep in mind when searching for locations is to view crime statistics and thus be able to avoid those areas. If you place your vending machines in high-risk locations, thefts will most likely end up consuming your profits.
When negotiating your machines’ locations, you must contract with the owners, since you will use your electricity and take a percentage of your profits. The most normal thing is that they take between 10 and 20 percent, it will also depend on the size of the machines, and if the place is very profitable.
In the contract, you must specify the following:
- – Type of machine and products to sell.
- – Contract period.
- – Termination clause for breach.
- – Exclusivity if it applies.
- – Rights to replace or reduce the number of vending machines.
And as I always say, contracts must be drafted and reviewed by lawyers; in this way, future problems will be avoided.
Purchase or rental of machines
If you are not going to buy a franchise or buy a machine already in operation, you will need to buy your vending machines. But before doing so, you have to decide what type of products you will sell and what type of machine you want.
Bulk vending machines are small and usually carry small amounts of products, peanuts, gum, rockets, etc. Your costs can range from $ 50 to $ 200, but the profit margins are very low. So if you want it to be profitable, you will need more than one machine.
Then there are the mechanical machines, which are much larger and can dispense many products. This vending machine’s price can vary between $2,000 and $3,000, and its profit margins are usually much higher than the commitment to bulk vending machines.
We have electronic vending machines, which already have touch screens and accept all kinds of payments, either in cash or credit cards. Of course, their prices are usually very high due to the type of machine.
And as the last option, you can choose to buy used vending machines; although they are cheaper, there is a greater risk that they will stop working in the short term. And vending machines are not cheap machines to repair.
Types of products that work very well in vending machines
- Hot drinks such as tea, coffee, and hot chocolate are in great demand everywhere, especially in offices, schools, and shopping centers.
- Vending machines that offer all kinds of drinks such as water, soda, and juices also work very well in all places.
- Food machines, such as sandwich and pizza machines, work well in business places and schools.