Vending as a business is on the surface an attractive option and in truth there advantages and problems associated with it, just as there are with any business concept. So let’s take an unbiased look at some of the key pros and cons.
A vending machine business, once established, can provide a steady income. Many businesses can take several years to truly become profitable but with vending, if you work smartly, can start to turn a noticeable profit within a few months. The profit that you see and the income that you can generate from vending of course relies on how many machines you are operating and the venues where you have your machines placed.
Vending is also a business that is relatively easy to operate. With less concerns such as staffing, business premises, huge overheads and so on, it is easier to maintain a flow of profit. Plus there are fewer management issues which can take up so much operation time and costs with most other types of business.
Vending is also a business that can be fun to operate. Meeting different people, being able to work to your own schedule, more freedom in your own choices: these are all reasons that people have highlighted as the lighter side of vending.
The costs of the actual equipment can be both an advantage and disadvantage, depending on the type of machine that you use. Initial outlay is one of the most important factors to consider when looking to start any business from scratch so the smaller the initial investment, the sooner you can recoup that cost. Cost however should also factor in the maintenance cost – anything mechanical will experience wear and tear so it is very important to be able to include the cost of repair and maintenance into your projections. However electronic machines if they break down can be very expensive to repair, with printed circuit boards and electronic components. Decide on the type of machine (and product) only once you have this information available.
What are the downsides?
Locations
Without a decent location for your vending machine, you don’t have a business. Competition for the “high-end” sites is strong and can sometimes be aggressive. In some cases to gain floor space in these types of venue can involve high rental fees, guaranteeing a minimum income to the venue which could mean that you have to make up any shortfall from time to time. In some cases you may be asked to enter into a fixed-term contract or agreement with the venue, taking away much of your freedom and the ability to re-locate your machine if it isn’t generating the income.
It is important to remember that with the right type of vending machine, you don’t necessarily have to target the more sought-after venues. Opting for a form of vending and product that is applicable to a more generic range of venue will help.
Remember also that for every venue that closes or is lost, there is another around the corner. Vending operators sell their businesses or retire which can free up options so networking and keeping up to date with what is happening in your area is key – keep an eye out for new businesses and developments that are due to be starting in your region and get in touch with the developers as soon as possible.
There are of course companies or individuals who provide locating services. While this can help get your machines active and generating sales more quickly, it of course come at an extra cost.
Theft and Vandalism
As soon as you put your machine into a public environment, you are placing them at risk of misuse. Most vending machines are difficult to actually break into but this does not necessarily mean deterrence. Another issue can be the wrong coins put into the machine causing vending jams– the product may not be dispensed but your equipment could be rendered dormant until you are able to attend to it. Most members of the public do not associate vending machines with a person trying to make a living; they are often regarded as a faceless entity so becoming aggressive or boisterous with them doesn’t pose a moral issue to some people. You need to be prepared for this as no matter what venue you consider, you can never fully predict how your equipment will be treated there. However this is quite rare and if you are friendly with the site owner/manager they with keep an eye on your equipment and will do their best to make sure your equipment is no being misused.
Product
Finding the right product is important – almost as important as matching the product to the venue. There is no point placing a snack machine in a venue where healthy-eating is a major concern. In the same vein, there is little or no point having a toy capsule machine in an adult-orientated environment. Maintaining an especially varied product supply for a limited number of venues can be inhibitive, particularly during the start-up period.
When you are just starting a vending business, you are going to want to keep things simple so common advice is to start with a product that will have as much of a wider appeal as possible. This will help keep a level of focus for you in terms of location and product supply. You can then start to diversify. Some of your existing venues will be suitable for more than one type of product. Once you are established, you will become more adept at matching certain types of vending to particular types of venue. It will also be easier in terms of cash flow to accommodate different concepts within your business.
