A vending machine route is an exciting way to start a small business and grow it to substantial income and financial independence.
First, remember that a vending machine route is a business. Like all businesses, success is not guaranteed. Before you embark down the path as a successful vending machine operator, you need to carefully consider what this business will look like and how you’ll run it.
Start by setting goals. Successful vending machine operators have a predetermined goal in mind when they start every year, month and day. Success is a plan, and plans start with goals. Goals start with vision.
Striking a vision
What is your vision? Do you want to be rich? Earn extra income? Dominate the local vending market, the national vending market, the world vending market? Do you see yourself working part-time or full-time? Mentally create your perfect day. A word of caution: If you think that vending is an “easy” business – you just fill the machines, count your money, and presto, you’re a millionaire – think again. The vending machine route business is a great way to work hard and be well compensated, but with no hard work, there’s no compensation.
Planning your business, setting goals
Once you have created your goals, start planning your business. What segment of the business do you want to attack? Are you going to be a soda machine supplier only; snack machine/soda machine only; full service, snack machine, soda machine, cold foods machine, coffee machine, commissary, or a unique products vender (CDs, bait, t-shirts, gifts, etc.). Each of these market segments – and there are more out there – requires planning. What equipment do you need, what type of route vehicle, how much money should you budget, which vending product suppliers will you choose (where will you get your product), how do you get your vending machines placed into locations, what financial software do you need, if any, and on and on.
Have I given you anything to think about yet? My goal is to prevent you from jumping into the business because you heard in a hotel ballroom that the streets are paved in nickels, dimes, quarters and dollar bills. The fact that you are doing research means you are on better path than the average potential millionaire.
Research is the great risk reducer in any forum. Doing this basic research means you are on your way, but there is much more to do.
In formulating your plans for a vending business, you also need to perform a basic market research analysis. This sounds complicated, but it really isn’t. Study all the vending machines that you see:
- Who operates the machine/s?
- Machine’s location
- Brand of vending machine
- How clean is the machine?
- Does it work properly?
- Is it filled? If so, is it filled with anything you would purchase?
- Are people using the machines? With what frequency?
These are some of the questions that will help you formulate plans. They will help you determine what kind of vending machine equipment you need to purchase, what kind of vending machine locations you need to secure, who your competition is, and what kind of pricing you need. This research will help you determine your unique vending machine business feature, what sets you apart from your competitors.
Analyze your prospects
The next research to do is a customer analysis, and it can be done in conjunction with your initial research. Stop in to a location you think you would like to have and speak with anyone who uses the vending machines. What do they like – and what don’t they like – about their current vending machine operator? Most importantly, listen to the responses and ask follow-up questions. Get critical details: how often does he/she come, do they take requests, are they quick to respond to problems? Let them talk, and they will tell you everything you need to know to do business successfully with that site. Write down all of the responses. Can you do better?
When doing this type of research, be prepared with a sales presentation. I have done this, only to discover that I was speaking with the owner of the business. He was fed up with the vending machine operator they’d been using, and I generated a new customer on the spot.
Another word of caution: Don’t commit to a vending machine account unless you can provide better service than the current operator. Most managers/owners know other managers/owners, and one of your goals should be to generate word-of-mouth advertising. If you take on more than you can handle, or you don’t provide service at the level you committed to, you will generate bad word-of-mouth. That can quickly lead to your having a storage area full of vending machines. Do more than expected, give away a free sample every so often, stop in to talk with the manager, make sure everything is all right, handle refunds promptly, change up your product selection regularly, fulfill requests. These are the techniques employed by successful vending machine operators.
Another key to success in the vending machine route business is to have good accounting practices. Know, to the penny, where your money comes from and where it goes. Understand that many variables can affect your profitability – everything from cost shifts in your product/s to fuel prices. It’s critical to set up a proper accounting system early, one that allows you to grow. You don’t want to waste the time (and expense) of switching accounting systems at some point in the future. Talk with a good CPA and ask for suggestions on a system. There are several off the shelf software products and it’s important to select the one that best suits you and your business.
Careful planning and research are the keys to a successful vending business. Be sure to start your route off with all the benefits.