These days, only 41 percent of Americans carry cash around with them. And the millennials leading this trend dismiss paying by cash as “inconvenient.” Convenience is the driving force of any vending machine business. As such, installing a credit card reader on all your machines is essential to thrive in our near-cashless society.
Although it’s not only the days of customers smoothing down dollar bills to pay for snacks that could be about to disappear. Contactless payment systems are finally starting to take off in the US. This means that standard chip and PIN card payment systems might not cut it anymore either.
But before you invest in contactless vending machine accessories, it pays to know the top types of payment systems available. Keep reading to find out more.
The Top Contactless Payment Methods
Contactless payment systems use near field communication (NFC) technology. This allows consumers to tap their card, smartphone, or another device near a contactless reader to pay without entering their PIN.
With contactless phone or smartwatch payments, consumers don’t even need their card. This offers added convenience for vending machines in gyms, where customers might not have their credit card to hand. Contactless payments are also a lot more hygienic, which is a bonus for vending machines in locations like hospitals and clinics.
If your vending machine card readers aren’t NFC-capable, don’t panic. Our new card readers have the necessary hardware to install no contact payment systems. Here’s a rundown of the top payment systems around:
Apple’s 43.9 percent share of US smartphone sales makes Apple Pay popular with retailers. Consumers can set up Apple Pay using their iPhone, Apple Watch, or iPad. Although, iPads won’t work for contactless payments. To ensure your vending machines can accept Apple Pay, they must have an NFC-capable PoS terminal and the correct software.
Google Pay allows retailers to accept contactless payments through the customer’s Google account. Unlike Apple Pay, consumers can use their tablet for contactless Google Pay payments. Google Pay also works with any Android phone or smartwatch with Android 5.0 or higher, NFC capabilities, and host card emulation (HCE). To accept Google Pay contactless payments your vending machine must use a Google Pay processor.
Samsung Pay isn’t as well known as its competitors. Although, Samsung’s 26.9 percent share of US smartphone sales makes it a good option for your vending machine business. Not least because Samsung’s technology also allows contactless payments via magnetic strip terminals.
Visa has driven 100 million Visa-branded contactless cards into the US market. This move has allowed Americans to continue paying by card as their preferred contactless method. With NFC capabilities, your vending machines can take advantage of this continuing preference.
Your Guide to Contactless Payment Systems
The trend for contactless payments is finally gaining momentum in the US. Consumers are now recognizing the speed, convenience, and safety contactless payment systems offer.
As a vending machine operator, this is a trend you can’t afford to miss out on. For more information on updating your vending machines with contactless card readers, contact us today!
The vending business is attractive to many entrepreneurs because it creates a mostly passive income. You gain the freedom to do the things you love while the machine works for you. But really, it’s not as simple as it sounds. Creating a profitable vending machine business requires a lot of thought and work, especially when identifying a good location.
When looking for ideal vending machine locations, you’ll want to consider not only the location but also your target customers. Are you targeting school-going children or adults checking in and out of the gym? Whichever your target market, ensure that you go for a spot with significant foot traffic.
Steps to Finding the Best Vending Machine Locations
1. Do Some Preliminary Research
Identify potential spots and get a feel of the most common traffic in that area. What kind of products could go well with that location? Are there other options available such as a convenience store or another vending machine?
2. Identify What You’ll Be Vending
Depending on the locations you’ve identified, you’ll want to identify the type of products you’ll be selling. Some of the things to consider include the product’s cost, shelf life, and profit margins.
3. Choose The A Location That Is A Good Fit For Your Business
From the already identified potential spots and the possible product(s) that most appeals to your target market, you can now go for the location that will be the best fit. Some of the qualities to look out for in an ideal spot are:
- High traffic: An area with high foot traffic such as train stations, airports, shopping malls, schools, event centers, and government buildings are suitable for a vending business.
- A spot with no existing vending machines and other competing companies
- An area where people have to wait or line up for services is also an excellent option for vending machine businesses. These include repair shops, medical centers, salons, public libraries, and even hospitals.
4. Draft A Proposal And Approach The Property Or Business Owner
Once you’ve identified your most qualified spots, you’ll want to prepare a proposal outlining how the vending machine will be a game-changer in that location.
Even if your preferred location has an already existing vending machine, you can find something different to offer that the property owner may like. You can also identify how you can out-compete other existing vending businesses by providing superior services and offerings.
Remember: Value proposition = location acquisition
When pitching your business to the property or business owner, be sure to outline how your business will also add value to their business. For instance, placing a vending machine in or around a hotel or motel can help keep their customers refreshed throughout their stay without needing to drive or walk so far away for refreshments.
Best Vending Machine Locations That You Should Consider
Are you looking for a great vending machine location but are unsure if you’ve found the right spot? Here are a few popular options to install a vending machine:
1. Apartment Communities
An apartment complex with popular amenities such as a pool, laundry room, gym, party room, or a clubhouse is an ideal location for a wide variety of snack and food vending machines. These areas have a flurry of activities and are usually highly trafficked by the members of that community.
2. Hotels and Motels
Look for motels and hotels that don’t have micro-markets and request to install a vending machine on their lobby or side entrances.
Gyms are a great option to vend healthy products such as shakes, protein bars, and sports drinks.
4. Manufacturing facilities with lots of employees
Due to the consistent flow in these facilities, you can pitch to vend cold drinks and snacks to the hundreds of people working in the facility.
5. Schools, community colleges and universities
Schools have tremendous foot traffic that you can leverage to sell healthy, child-friendly beverages, snacks, and meals.
6. Auto Shops
This is one of the low-key areas that is mostly ignored. Yet, auto shops have hundreds of customers who have to wait to have their cars fixed. Having a vending machine nearby can be a great reprieve and make the wait more tolerable.
7. Hospitals and medical facilities
Hospitals and other health facilities have traffic flowing throughout the day and night. Having a vending machine that offers meals, beverages, and snack choices not only generates you passive income but also provides a convenient solution to visitors, patients, and health personnel working in the hospital.
Other excellent vending machine locations include:
- Skateboard Shops
- Grocery stores
- Golf Course Lounge
- Assisted living center
Putting It All Together
The success of a vending machine majorly depends on its location. Identifying and getting a fit-for-business location will place you ahead of the curve, help you generate significant passive income and allow you to scale up over time.
Once you’ve identified a good location for your business, ensure that you also choose vending products that fit well with your target customers. Most importantly, don’t forget to offer exceptional customer service to help differentiate you from other vending businesses and carve out a loyal market for yourself.
Do You Need Vending Machine Repair?
Are your vending machines damaged, tired, ready to quit, or dated? Instead of going into debt purchasing a new vending machine, you can have them refurbished and repaired professionally. A comprehensive vending machine repair and refurbishing process guarantees that you get trouble-free services affordably.
A company with a dedicated team of experienced vending machine repair and refurbishing technicians will transform your machine from “as is” status to “like brand new.” In this guide, you’ll learn about repairing and refurbishing a machine. Bringing the machine to its mint condition.
Transforming Your Vending Machine To A Brand New Look
A modern-day design of a vending machine should be fancy and sleek. A complete vending machine repair and refurbishing process will change the outward appearance of your machine immaculately. The process involves pulling out all the parts of the machine. To then replace the damaged ones, painting everything anew, and adding new finishes to all the sides.
What Can Go Wrong With a Vending Machine?
Many vending machine owners, especially those located in high foot traffic areas, experience coin or dollar bill mechanism issues. At some point, the mechanisms simply stop accepting money. While you can prevent these problems from regularly occurring by cleaning the dollar path and the coin path, you should consider a comprehensive machine refurbishment.
In 2020, it’s more cost-effective to have your machine’s changer and validator remanufactured to the highest OEM standards. This will help avoid technical problems that may lead to unnecessary downtimes. An established vending machine repair and refurbishing servicer provider will give you a warranty. This will act as a sign of backing their mechanisms remanufacturing process.
Your machine will be fully updated to the newest MDB standards. This means upgrading the changer and validator to MDB standards.
The process also involves putting guaranteed delivery on the machine, which is a force field that tells the vending machine that a customer has received his/her product in the delivery bin. Meaning, if the product fails to drop through the guaranteed delivery field, the machine will prompt the customer to make another request.
This allows the customer to know whether he/she prompted an empty selection or select to get his/her money back. This is a surefire way of ensuring all your customers are satisfied when using the vending machine on your premises.
Enhanced Product Display
Displaying the products in your vending machine in the most appealing way is super important in the vending machine business. A vending machine refurbishing process will typically involve pulling out your old fluorescent bulb. Next, you will look to replace it with a new LED strip.
The LED lighting will give your products a more 3D look by giving off a different color light. The new lighting will entice potential buyers more and increase sales dramatically. Additionally, this is a more cost-effective upgrade because the LED lighting can last up to 10 years.
Increase Energy Efficiency
The LED lighting upgrade is more energy-efficient than the dated fluorescent bulbs found in old vending machines. The vending machine refurbishing technicians will also install a Vendmiser, which is a motion detector, at the back of your machine.
The motion detector minimizes the amount of energy your machine consumes by cutting your machine off for up to 45 minutes when it detects that nobody has been to the break room for a long period.
When Should you Repair Your Vending Machine?
While professional vending machine repair services may seem expensive, it’s advisable to seek professional help to avoid extensive damages and costly repairs down the road.
We, at A&M Equipment Sales, offer steadfast shipping protection, which includes sturdy corner boards, 2×4 pallets’, shrink wraps, double metal bands, and leg runners to ensure your machine arrives at your location undamaged.
Our partnership with reputable carriers ensures that you get the most negotiated shipping rates on the market regardless of your location across the globe.
Vending machine financing can make or break your vending machine business. Whether you are a young entrepreneur or a retiree looking to add another income stream to your portfolio, starting a vending machine business is a good option. Vending machines are synonymous with convenience, and they are everywhere. Importantly, from an investment standpoint, the vending machine industry is a multi-billion dollar industry with the potential to grow some more.
As it stands, this profitable venture helps companies and business people across the country improve their bottom lines quite considerably every year. With proper location research, having the right growth strategy in place, and making use of an optimal vending machine financing, there is considerable potential for you to rack in profits year-over-year. Moreover, you can succeed in growing a profitable business venture with little capital expenditure and low maintenance requirements.
With that in mind, herein we will explore how you can start and how to finance your vending machine business.
How Important Is Vending Machine Financing To Your Business?
Equipment financing is fundamental to the success of your business, considering the cost implications of setting up a vending machine business. Vending machines are expensive to purchase. For instance, a used basic vending machine model can cost well over a thousand dollars. However, investing in a basic model will limit the return on investment. You would accrue over time as it does not have many of the necessary features to capitalize on all opportunities.
If you want a vending machine that has an inbuilt credit card machine and other modern features, you should expect to fork out tens of thousands of dollars to purchase the vending machine. Moreover, you must have plans in place to grow your business. As such, you must be able to replace outdated and or broken vending machines. This will be to ensure your business continues to grow and reap maximum return on investment.
This is where equipment financing comes in. It helps you acquire the vending machines you need to start your business and to upgrade the equipment when needed. With the option to take up 100% financing, you do not have to worry about the high upfront costs associated with setting you a vending machine business.
What Are The Advantages Of Vending Machine Financing?
Vending Machine Financing Helps You Optimize Your Financial Resources
With vending machine financing, you can free up more of your financial resources. Leaving more to other critical areas of your business to support business growth. You do not have to spend all your working capital on purchasing vending machines.
2. It Lowers The Up-Front Costs
Aside from receiving 100% financing on the equipment cost, you can get financing on the delivery and installation costs as well as taxes. This reduces the upfront costs you incur, allowing you to start a profitable business on a limited budget.
3. Payment Flexibility Of Vending Machine Financing Helps You Grow Your Business
When you deal with a good financing company such as Vend Lease, you receive exceptional payment flexibility terms. A flexible payment structure helps you sustain your growth as it conforms to your cash flow fluctuations. Moreover, Vend Lease has many end-of-term options you can choose.
4. You Do Not Have Worry About Equipment Disposal
With vending machine financing, you do not have to worry about how to dispose of the vending machines. The financing company handles the disposition of the machine, taking away any unnecessary burden that comes with selling the vending machine on the used vending machine market.
For your business, this means you retain and preserve your line of credit. Thus, ensuring you have the right cash reserves and cash flow for your business to thrive. So, when you choose a company with ample payment flexibility such as Vend Lease, you do not have to strain to pay for the financing of your vending machine business.
Back in the day, having a vending machine equipped with a coin slot was enough. Then as time went on, adding a dollar bill acceptor became top-of-the-line. However, with fewer and fewer people carrying cash on hand, smart vending machine operators and business owners know that having a credit card reader on a machine is key to increasing sales and has become the standard for vending machine operators. USA Technologies, the leading developer in cashless systems, reports credit card payments to increase average vending machine sales by 30 percent over cash. While some worry about monthly fees or per-use fees, they pale in comparison to the increase in sales you’ll experience.
Types Of Credit Card Readers
Swipe readers or chip readers, two different ways of accepting credit cards. These could be added aftermarket to a machine you already have. They can also be built into newer machines on the market. Either way, going cashless is a great way to maximize profits and ensure that you don’t miss out on any sales. Especially when most potential customer doesn’t carry cash. Additionally, some readers allow customers to pay with their smartphone or tablet. This is opposed to using cards at all, making sales even easier for both you and the customer.
Many aftermarket and some built-in credit card readers also include a mobile app. This offers mobile management and monitoring for your machine. For customers who use the mobile app, they are offered the opportunity to earn rewards in the form of credits or free vends.
In short, there’s almost no downside to adding a credit card terminal to your existing vending machine. Any cost outlay is recouped almost immediately in the form of increased sales. All in all, you’re making the entire process easier for you and your customers.
Vending operators cause their own service calls by the actions or in-actions of the route man:
- Without a well planned and timed service schedule (or route scheduling system), your machines will run out of product… and cause a service call.
- You leave out of date product in your machines… “I bought the product and it’s stale.”
- You open the door to your machine. Do you open the door of every machine at every stop even when if it’s only making enough money to open the machine every other stop? (Here’s an alternative) Every time you open the door of the machine, there is a possibility for something to go wrong in the machine. Mechanical and electronic things break over time with use.
- You open the door, but you forget to lock it when you leave.
- If you open the door make sure you close it, lock it and make sure it accepts money with a coin and bill test before you leave.
What service issues do you deal with? (Share them and any questions you have in the comments below)
Vending Operators Cause Their Own Service Calls Tom Shivers: I’m Tom with the Vending Business Show, here again with Larry Towner of Service Group International. He’s a vending business consultant and we’ve been discussing some interesting topics lately. What are we going to talk about today, Larry?
Larry Towner: Today I think we’re going to talk about, I know we’re going to talk about Vending Operators Cause their Own Service Calls, and you think it doesn’t happen, but it does.
Tom Shivers: So you’re saying vending operators are causing service calls?
Larry Towner: Yeah, they cause their own service calls, and between an operator and/or a route man, you get service calls that are caused by the actions or inactions that you take, I guess I want to say, so let’s start off with one of my favorites. It’s always the one I usually do.
Larry Towner: It’s called poor planning or a lack of a good schedule. You pretty much know if you don’t have a great schedule out there, you don’t plan your time well. You’re going to get service calls if your machines run out of product. This is a very simple thing, but you’d be amazed how many people don’t have a good route scheduling system so they run out of product or whatever, but they don’t show up at their accounts on a regular basis, so that’s really one of the first reasons why you can cause service calls into your own accounts.
Larry Towner: Another one of my favorites is you leave out-of-date product in your machines. Nothing will generate a service call faster than somebody saying, “I bought the product and it’s stale,” because I’m going to guarantee you, they’re going to call you when that’s the case. “I lost my last 50 cents forever that I ever had in my whole life. You need to come pay me back or send me the money.” Yeah. I would if you’ll send me a self-addressed stamped envelope, so that’s one of the things.
Larry Towner: Here’s a third one. This is one that’s going to surprise a lot of people, and you’ll laugh at this one, Tom. Big reason why you cause your own service calls, you open the door to the machine. Now, that’s sounds funny. You have to open the door to the machine to service it, right, and that’s true, but I guess the question is is do you open the door every time you go to an account or not on every machine. We’ve discussed this in a past show about it gets back to your scheduling and your route things, but if you don’t generate a certain amount out of that machine, like let’s say you’ve got a drink machine and a snack machine. The drink machine generates plenty of money out of it and the snack machine generates enough money for you to open the machine every two weeks, open the machine every two weeks. Don’t open it every week, because every time you open that door, here’s what happens, right? First off, the computer disables because you take the power off, or almost all machines, the interlock switch comes on and the power goes out on the machine. Well, every time you do that, you open the possibility for something to go wrong in the machine. It’s just the way mechanical stuff works. It’s mechanical, electronics, whatever it is. That’s how stuff happens.
Larry Towner: The other thing that you do is there’s cables between the door and the machine. Well, every time you move those cables, you cause to have the potential for pinching a cable or cutting a cable or, shoot man, wire breaks, just after a while, it work hardens and breaks. Anyway, so it sounds funny, but opening the door is one of the reasons why you cause your own service calls.
Larry Towner: Fourth reason why you cause your own service calls, and this has to do with opening that dad gum door again. This is a big problem. You open the door, but you forget to lock it when you leave. If you’ve been in the vending business for a while, you’ve gotten calls where hey, you left the door open, and unless somebody knows how to, on some of the doors, unless somebody knows how to operate it, they’ll lock the door, but they’ll leave the door open, so they might try to help you out, but generally if they say the door’s open, you need to go do it.
Larry Towner: One of the fifth reasons, and this all has to do with opening the door, if you open the door, make sure you close it, number one, make sure you lock it, number two, pull on the door to make sure it’s actually locked, which has always been one of my favorites. I always grab the top corner of the machine and yank on it a little bit, and if it didn’t open, it was good, but before I left every account for a machine that I opened, I coined and bill tested the machines. I made sure that when I shut that door that that machine functioned, at least took money, right, and so … it accepted money, that’s the better thing. It doesn’t take somebody’s money because we don’t want it to take somebody’s money without giving them product, but we make sure that that thing accepts coins and accepts dollar bills because you’d be amazed. Again, when you open those doors and the interlock switches and stuff, and the computers go down, stuff happens. It’s what happens.
Larry Towner: Tom, any questions on that?
Tom Shivers: That’s some great, great tips there. Maybe there’s some questions that people might have about certain service issues that they’ve had that they could add to the comments below.
Larry Towner: Sure.
Tom Shivers: All right.
Larry Towner: [inaudible 00:05:04]
Tom Shivers: Well, yeah, and do subscribe. We have a good time on this show, and we’d like to hear from you, so if you have a question, send it in, and you’ve been watching Vending Operators Cause their own service calls from the Vending Business Show, a publication of A&M Equipment Sales.