This is a question that will be asked early on by anyone considering vending as a business option. Let’s come away from the fact that Tubz Brands are a vending supplier and try to answer in an unbiased way.
Don’t believe the hype!
Vending is not a get-rich-quick concept. It takes time and investment to get a vending business started and to start turning a profit. True, with most types of vending you can recoup your investment sooner than other business start-ups but if you believe the hype that it is all plain sailing, you are in for a surprise. If you do some research on other people’s experiences you will read about success stories and failures. Look into this. Why was one person successful when someone else wasn’t? Vending is like any other business: it requires commitment, diligence, patience and enthusiasm to make it work.
Understand the industry BEFORE you start!
Vending also requires a knowledge of the market. What products to sell, what type of equipment, where to place them. A more generic product will allow you to be able to secure a wider range of locations for your machines. The more specific your product, the more restricted you will be with options so choose wisely. When starting out, opt for a product type that is going to appeal to a wider range of customer. By doing so, you will be able to establish a foundation for your business sooner. Once you have a bedrock of located machines, you will then be able to turn your focus to other types of vending. Multiple vending machines meeting different needs in one location is a good way to go as it reduces the costs incurred such as fuel and helps maintain longevity with each venue.
Consider the hidden implications of your equipment!
The more complicated the machines, the more cost will be involved. Ask yourself these questions before committing to a purchase:
How much can I invest and still allow some cash flow?
How much space will I need to store the machines(s) before I find locations for them? Would this require renting a storage unit for example?
How easy are they to manoeuvre from one place to another – will I need to purchase a larger vehicle to do this?
How much does it cost to repair? Anything mechanical will have parts that wear out. How easy is it for this to happen and is the cost of repair inhibitive?
How much is the stock to purchase wholesale – what margin will be left after selling it at a reasonable price?
What degree of loss can be expected (and acceptable) through stock wastage (or theft, if that is a consideration)?
What is the devaluation? How easy is it to sell the machines further down the line?
Compare vending to other forms of retail.
Here are some positive factors with vending that you won’t necessarily enjoy with running a shop or store:
If you have static premises, you have to bring the customer to you – this costs money in terms of marketing and advertising which has no firm guarantee of success.
Some vending machines are relatively easy to relocate, in effect taking the product to the customer. This will require some time and expenditure but this should be a fraction of what is required for increasing business with a shop or store or indeed other types of “mobile” enterprise. If you have chosen your concept well, there should be a good range of options in terms of where you can place your machines.
A vending business doesn’t necessarily require premises that will incur business rates. In many cases, vending can be operated from home with just a small amount of storage space needed.
Staffing: vending machines act as silent salesmen so, depending on the level to which you expand your business, you will have little or no need to employ staff, avoiding all the various implications that that can bring.
Working hours – to some extent, vending allows you to choose the hours that you work, Most of the venues where you place your machines won’t close at five in the evening, for example.
And here are some negatives:
You are to some degree trusting strangers with your equipment. You are not present to be able to keep an eye on your machines so choose your venues wisely. If a venue has a reputation for questionable clientele, is it worth taking the risk?
If one of your machines develops a fault, there are potential sales lost in the time that it takes you to get there. A good way to minimise this is to plan your route and locations properly – if you have to travel too far, the greater the loss. Of course, the advantage of vending is that you are looking for multiple sales across a number of locations rather than just one so it isn’t going to be as inhibitive as you might first think. Always ensure that your contact details are readily available so that you can be notified quickly. A quick response time will also keep the venue happy and minimise the risk of them asking you to remove your machine.
You may have to remove a machine at short notice – venues can close for example or management can change which can affect whether or not your machine can remain there. Be prepared for this and make sure that you have a pro-active attitude to relocating your machines. You could make use of a professional site finder which can be costly if they are freelance. You will build up experience and skills in doing it yourself and the outcome can be more rewarding. If you are affiliated with a vending supplier, they may have a site finding service available which could come at a lower price. There are pros and cons to both.
There are so many different vending concepts that it can seem like a whirlwind of choices but remind yourself that vending is already a viable business for many people. There are also companies and suppliers that specialise in each concept who can help with advice. You are not alone in your choices. See what other people have been doing, where they have tripped up and where they have succeeded and use this to your advantage.
