Vending

Vending

Vending machines are everywhere. From the Coke or Pepsi vending machines in most office buildings, airports, and malls to the smaller candy and toy vending machines in your local grocery store, it’s a virtual guarantee that you or someone in your family has plunked money into a vending machine. Since running a vending machine business appears to be a relatively handsfree operation, there is a lot of interest in it from people looking for an easy money-making opportunity they can run out of their home. Because of that demand, a lot of “fly-by-night” scam artists have entered the vending business and given it a black eye. While there is money to be made in vending, it’s important to do your research and talk to people in the industry (people actually running their own vending businesses) BEFORE you invest one dime in your own machines.
 

Vending Secret #1:
Some companies selling the vending machines make more money than the people buying and servicing them.
Do you ever wonder why there are so many companies offering you the opportunity to get involved in the “lucrative” vending machine industry? Go to business opportunity or franchise shows in your area and you’ll see a variety of companies with vending machine equipment to sell you. 

Unfortunately, the truth is that the person who makes the most money from vending machines is often the person selling YOU the vending machine. You see, the vending business is an easy business to hype up. After all, vending machines can be placed one time and they can deliver their product and take money non-stop, 24 hours a day. So you can feasibly run a vending business in your spare time, spending just a few hours a week placing and refilling your vending machines. Plus, profits on the items in your vending machine can be relatively high, especially if you buy in bulk or from a reputable wholesaler.

Because of the seeming “ease” of the vending business, it’s easy for companies selling vending machines to hook people. They show mountains of quarters and cash. They talk about how you can increase your income simply by increasing the number of machines you have. They talk about how you can run this entire business in just your spare time and rarely have to talk to anyone. They even tell you it’s an “all cash” business with a knowing “wink-wink” that suggests that you don’t have to pay taxes on your vending income if you don’t report it.

What ultimately happens is that they sell you a very low-quality vending machine for a very high price. In many instances, people spend hundreds, even thousands of dollars, for vending machines that quickly break, jam, or can be jimmied open by even the most novice of criminals. They may also explain that you need to purchases all of your supplies for the vending machines (candy, toys, etc.) directly from them. Again, they generate even more cash from you. 

And now it’s in your hands to make the contacts, try to place these machines, and then hope that you’ve picked a popular location. If your vending machines aren’t producing cash, it’s time to pick them up and move them again. And often you’ll find that the very best spots are already taken.

I’m not suggesting that you absolutely cannot make money with vending. However, what I am suggesting is that there are many, many companies in this industry giving it a black eye. And that suggests that you need to do a lot of research and due diligence before sinking even one penny into vending machines.
 

Vending Secret #2:
There are three things you must do before getting into the vending business: 1. Research, 2. Research, 3. Research.

Talk to other people in the vending business first. Do research on the vending companies offering you equipment and supplies. The Internet has a wealth of information about vending and specific companies selling vending equipment. You’ll soon have all of the information you need to make an informed decision on whether or not a vending business is right for you.

Vending Secret #3:
The secret to making money in vending is having the right product in the right location.For example, waiting rooms and office buildings are great for many types of vending machines. You have a large captive audience every day. However, you may quickly discover that the best spots are already taken. Often, smart vending companies quickly make deals with hospitals, car dealerships, and local businesses to supply them with vending machines. These vending businesses are more likely to get these types of profitable locations, because they have an established track record and can show the location owner dollar amounts and potential profits that they’ll receive. Often, it’s hard for the person new to vending to capture key locations.

However, it’s not impossible. But you do need to do some research in your local area and spend time choosing the right locations for your vending machines.

Vending Secret #4:
Do NOT expect to become a “Vending Millionaire”.Yes, some vending companies promise you riches. They talk about vending machines being packed with money and about people making six figures a year with only a handful of machines. They tell you stories of the “vending lifestyle” and how you could quit your job and have your time off to do whatever you please, still spending just a few hours a week checking and filling your vending machines. While an established vending business CAN make good money, do not expect to become the next vending multi-millionaire. Very few people, if any, get wealthy with a handful of machines. 

To truly make a good living with a vending machine, you need the right vending machines in the right locations. And even then, it’s still a business that needs to be managed and run correctly for it to produce profits. Don’t be fooled into believing that the vending machine business is your key to overnight wealth.

Vending Secret #5:
Do NOT get in over your head.Refuse to be pressured into buying a ton of machines when you’re starting out. Start small, with one machine, then grow as your profits allow. I’ve heard too many horror stories of people being talked into buying tens of thousands of dollars worth of machines to get a “special discount”. Then they’re stuck with a lot of machines to place, a monthly financing bill to the company that sold them the machines (since this large of a purchase is usually financed), and no positive cash flow. If they’re lucky, the machines are good quality and they just have to kick it into high gear and start placing the machines as soon as possible. If they’re not so lucky, they may be stuck with thousands of dollars worth of low-quality vending machines that will break quickly. 

The main problem with investing a lot of money when you’re starting out is that you’re starting deep in a financial hole that you’re going to have to begin filling up quickly with quarters and dollars from your vending machines. Often, it may take a few weeks to place all of the machines and even then, cash flow might be slow. At the same time, you’ll be receiving regular monthly bills from the vending company (or their financing company).

If you’re serious about the vending business, my suggestion is to dip your toe into this industry first before you jump in with both feet. You can always grow from one machine to 10 or 100. It’s much more difficult to succeed when you have already jumped in with 100 and they’re not making enough money to even pay for themselves.