What is a vending machine business? A vending machine business is a type of food service industry that consists of installing and maintaining a self-service food and beverage facility. The process includes obtaining permits, installing the machines, stocking them with products, operating them, and collecting cash from customers. This is an excellent opportunity for many budding entrepreneurs to start their businesses. However, as with any venture into entrepreneurship, certain steps must be taken to avoid costly mistakes and ensure success.
Vending machine businesses can be lucrative, but they’re not easy to start. For one thing, you need to buy all the vending machines before you make your first sale, so the capital investment can be pretty high if you want to go with larger machines that can hold more products and offer more variety. This article will walk you through ten top strategies for starting your own vending machine business to prepare before you make the leap into entrepreneurship and avoid common pitfalls. Here are the ten strategies:
1. Research The Industry
Many people want to start their own vending machine business. The vending machine industry is projected to be worth $37 billion in the United States alone by 2020. With that much money on the table, it can be a tempting opportunity. However, starting your own vending machine company requires serious research and planning before taking the plunge.
You’ll also need to know what types of vending machines are available from this company and how much they cost. Some companies only have a few different types of machines, while others have many more choices. Also, it’s important to check out what kind of warranty each type has so you can make sure your investment is well-protected.
You also need to research before investing in any vending machine business. It’s a highly competitive industry, and the sheer number of options available makes it difficult to know where to start. To help you get started, here are some tips for beginning your research for vending machine business:
- Determine if it is worth the investment by understanding how much each machine would cost and how much revenue is generated from those machines. You’ll also want to estimate how much your overhead costs would be so that you’re not losing money on the venture. For example, if you have 100 vending machines and you purchase them for $1,000 per piece, then your initial investment would be $100,000. If the average return from these 100 machines were $400 per day (which seems like a realistic goal), your total monthly profit would be $14,000 ($400 x 100). Now let’s say that after taxes and daily expenses were taken out of this amount (like electricity bills), this left around $10,000 – which means that every single day at least one machine is making at least $1/day! With such high-profit margins, it makes sense to pursue opening up a vending machine business.
- Start small with only a few machines: Wait to buy 100 or 200 machines immediately because you may lose money and have no way of recouping your losses. The best way to approach starting your own vending machine business is by acquiring a few at first- maybe 10 or 20- and building on that foundation over time as profits grow.
- Start big and buy many at once: There is also another strategy for getting into the vending machine business. Some people decide to go all-in right away by investing in hundreds of machines when they first start their new business. That way, they can capture market share early on while eliminating competition. If you choose this strategy, you must be prepared to spend a significant amount of capital upfront and hope that things work out well enough to break even within five years.
2. Develop A Business Plan
A business plan is a set of written instructions that should include the following:
- An overview of the company’s mission, vision, and values
- A description of your products or services and how they are different from others in your industry
- The type of information you’re planning to share with your customers
- A description of what makes your company unique
- The business model you plan to use (for example, franchising)
- A projected financial statement
- A marketing plan
- List of necessary equipment
- List of contacts
- List of suppliers
- General information on licenses and permits
- List of any risks or challenges
- Estimated start-up costs
- Timeline
- References
The customer base can be extremely broad; this will depend on where the vending machine location is located as well as who owns it and how many options there are in that area, but some potential examples could be office workers looking for snacks during lunch breaks, parents looking to feed their kids a healthy snack after school, construction workers who need something to eat before starting work at 5 AM on a chilly morning, students who want some inexpensive food options between classes but don’t want the hassle of going into town every day, people who want their favorite drink without having to stop at one location after another looking for it…the list goes on!
3. Choose The Right Location.
Finding the perfect location is a big part of starting your vending machine business. If you’re going to be outside, find somewhere with a lot of foot traffic. If you’re in a store, see if any dead spots would be good to put your machine in. Once you’ve found the perfect spot, let the person who runs it know about your vending machine and ask if they have any suggestions on what kind of snacks people typically buy at their location. If not, try out a few different products until you find something that sells well.
For example, if you’re trying to sell coffee, setting up near a school or office building will increase your chances of getting customers. If there’s little foot traffic in the area you want to set up shop in, consider partnering with another business owner to increase visibility. Feel free to partner with another vending machine company that sells different products.
When choosing locations, use the tips above and ask potential neighbors what days they’d like to see more foot traffic outside their storefronts. Finally, look for vacant storefronts that might need an entrepreneur to fill them!
4. Find A Niche For The Vending Machine.
To get a vending machine business up and running, you’ll need to find a niche for your vending machines. Many industries use vending machines, so it’s important to find one that is profitable. There are many different niches to choose from, such as food, toys, cleaners, etc. For example, hospitals use vending machines in the medical industry for everything from medical supplies to food. If you’re interested in this type of niche, there are many more things to consider when starting your own vending machine business.
I recommend finding a profitable niche in your area or one that will be profitable soon because people will want it. The best place to find the most profitable niche is through market research. You can do this by talking with people in the same business or doing online research. Surveys are the best way to find out what niche your local community wants. One way of surveying people is by offering them an offer and asking them if they’d buy it. The information you gather after surveying others could help you find a great niche for vending machines!
The more people who walk by, the more likely you’ll be able to make a sale. The less competition there is for your product or service, the easier it will be for you to take on new territory and expand your company.
5. Select The Right Products
Product selection is one of the most important decisions you will make as a vending machine business owner. The right product can hugely impact your success, while the wrong product will only lead to disappointment.
Product availability is an important consideration when selecting products. You want to ensure that you have enough products in stock to meet customer demand but not so many that it becomes difficult for customers to find what they’re looking for.
In addition to product availability, there are several other factors that you should take into account when selecting products: target demographic, popular and seasonal items; promotional opportunities; inventory management costs; and what’s likely to be profitable. Remember, this is your business – you get to decide which products are sold!
Sustainability is a final consideration when deciding which product mix will work best for your vending machine business. As a small-scale entrepreneur, you must provide customers with healthy options like water and snacks (granola bars, crackers). If people rely on unhealthy foods from your machines all day long, their diets could suffer. Plus, healthy food options provide more variety which means more sales opportunities.
6. Find The Right Suppliers.
When you start a vending machine business, one of the first things you’ll need to do is find a supplier. You’ll need to choose between leasing or purchasing and find out which type of machine best suits your needs. You’ll also want to plan out how many machines you want, where they will be placed, and what products you’ll sell.
You can use the following questions as a starting point:
- What type of vending machine do I need?
- How many machines do I need?
- Where should the machines be placed?
- What products should I sell in my vending machine?
- Should each product have its slot on the machine or share slots with other products?
Once you’ve answered these questions, it’s time to find a supplier that offers both leased and purchased options. The lease option is perfect if you’re just starting because there’s no upfront cost and less risk if the venture doesn’t work out as planned. Once you’ve found a supplier, talk to them about what type of machines might work best for your needs. Do some research into the different types before committing – this way, you will know what features are available and which might work best for your location(s). If investing in new equipment is more appealing, purchasing might be better for you.
7. Invest In High-Quality Machines
The first step to starting a vending machine business is choosing the machines. The most important thing to consider when buying a vending machine is quality. Investing in high-quality machines will help ensure your business will be free of breakage and maintenance costs. Do your research before buying and read reviews from those who have already purchased a vending machine model. It’s also important to remember that certain products sell better in specific machines, so choose the right type of machine based on what you are selling and where you plan to place it.
For example, candy sells best in a glass front vending machine because customers can see exactly what they’re getting. Likewise, beverages work well in an ice-cold drink dispenser because the cool temperature helps keep them refreshingly chilled to these items. Remember these things as you decide what machines to purchase for your business!
8. Promote Your Business
You are now ready to promote your business. Think about what your target customer will be like and focus on the demographics in your area. Consider how this customer will find you, then create marketing materials accordingly. Promote your business by outreach to local schools, posting flyers in stores, or even creating an ad campaign on social media. There are plenty of ways to get your vending machine business seen; some ideas are more affordable than others! Below is a list of things to do to help promote your vending machine business:
- Create a website with information about your product offerings and pricing. It is important that potential customers can see all your offerings before they commit to anything, so don’t make it difficult for them to look through everything you offer;
- Find out where people hang out at night (bars, restaurants, concerts) and offer them food/drinks there instead of during the day;
- Connect with other vendors who are selling similar products;
- Participate in vendor fairs at malls or supermarkets;
- Utilize Facebook ads that target consumers who live nearby;
- Keep tabs on trends and buy new items as needed.
What’s Next? If you want to continue reading about vending machines and know if this is something you want to pursue as a business, check out our post, which offers tips for success and mistakes to avoid when starting your own business.
9. Keep Your Machines Stocked
One of the most important parts of starting your own vending machine business is to keep your machines stocked. The items you choose should be healthy so that people will want to buy them, and you need to include a variety to appeal to different tastes. You’ll also want enough variety in pricing so that people can choose something they feel is reasonably priced and get the best bang for their buck.
Of course, you will want to change the inventory every once in a while, or customers may become tired of seeing the same items repeatedly. It’s a good idea to keep some old favorites on hand, but remember new items too! Customers are always looking for new options.
Offer low-priced specials: Keep your prices reasonable by offering low-priced specials. Offering these specials might help bring in more customers on a budget. Make sure you offer plenty of items that cost under $1 and $0.50 to offer something other than expensive snacks like chips, nuts, and candy bars.
10. Manage Your Business Effectively.
Start by looking at your vending machine location. If you have a small business, you will want to place your vending machines in high-traffic areas with good visibility. If you want to start a larger business, study the demographics of your target customers and place your machines accordingly. Once you have found the perfect location, start thinking about how best to manage your business effectively.
Remember that even if you have hired people to work on staff, it is still important to maintain ownership and responsibility over day-to-day operations. To do this, establish clear guidelines for employees and make them aware of all company policies from the start, so they know exactly what is expected of them at all times.
Conclusion
In conclusion, these eight strategies will help you get started and steer you in the right direction to start your own vending machine business. Remember that the vending machine business is one of the best and fastest-growing industries in the world, and there are many opportunities to be had. Many mistakes can happen, but if you plan, have a budget, talk with an expert or someone with the experience and know what you’re getting yourself into, this may be the perfect opportunity for you! As long as you go about starting a vending machine business by learning from the experts, planning for the unexpected, understanding all aspects of running a small business, following good old common sense, and putting in hard work – it doesn’t matter whether it’s full-time or part-time-this could be your ticket to success!
