It’s time to turn our attention to whether vending is a viable business to enter, as well as the average cost for a very important part of the business: the vending machine.
Is vending a reliable business venture?
The first recorded vending machines date back to the first century B.C., but came to prominence in the late 1880s. These were primarily postcard and gumball machines with simple mechanisms, a single selection and accepted one coin.
Millions! Successful vending machine operators can have gross sales into the hundreds of millions of dollars, but so can successful car wash operators, multi-level marketing operators or, for that matter, employees. Your level of success depends upon your business skill, your ability to generate customers and manage people, your skill at accounting, planning and marketing, as well as other important abilities. You are limited only by yourself.
Product selection for your vending machines can mean the difference between success and failure. Ultimately, your gross sales depend on a customer deciding to purchase a snack, soda or food item. Proper product selection can increase your sales by 20% or more, and improper selection can reduce sales to nothing. So how do you determine what products to put into your machines?
Before you undertake any venture, it is wise to do initial planning. How are you going to run your business? Write a business plan. Think through all of the potential problems with running the business. Understand that you are fully responsible for the outcome of the business.
Proper handling of equipment damage incidents starts at the time of placement. Accidents, vandalism and theft will happen, so I discuss these issues during the sales process and negotiate terms for dealing with them. You need to be comfortable with the placement terms. Generally, our company carries most of the liability – unless malice is involved. We do not tolerate theft or vandalism.
The valuation of vending machine equipment is based on several factors:
- Storage value
- Collector’s value
- Scrap value
- Parts value
- Operational value
- Market value
What is a good location? This question is relative, based on your company’s size and goals. A national vending concern considers a good account to have gross sales over $240,000 per year ($20,000 per month), whereas a small vendor working out of his garage might consider an account with sales of $6,000 per year ($500 per month) to be a good account. Start with your goals. What kind of vending machine business do you want? How much capital do you have? What are your operational plans? Is this a full time venture for you or a part time income?