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1 How Do I Start a Vending Machine Business?
2 Advantages of Vending Machines
3 Pros & Cons of Buying a Vending Machine Business
4 Ideas for Making Money by Setting Up a Booth
The vending machine business is a $42 billion industry and can be a profitable venture for entrepreneurs. Starting this business without franchising is an option that allows you to be your own boss. You can start with several machines and build your vending route over time. Most vending owners sell candy, drinks or both types of products. Instead of franchising, find vending machines on your own. Here are several tips to help you start your vending machine business.
Your Business Options
You have two main options to choose from when starting your vending machine business if you don’t want to franchise.
DIY from the ground up. This option is best if you have a lot of sales and business experience. It provides the cheapest startup options but the most investment in time to get started because you have to train yourself, conduct your own sales process and find your own suppliers.
Buying an existing business. This option is good because you don’t have to buy your own machines and you acquire an established route. However, you may have high startup costs with the initial investment to buy the business.
Finding the Best Spots
No matter if you start from the ground up or buy an existing business, you need at some point to find new locations to place your vending machines. Proven successful locations include restaurants, bowling alleys, skating rinks, shopping malls, laundromats, movie theaters, academic institutions and automotive centers. However, don’t limit yourself to these locations; look for spots with a lot of foot traffic in your local area.
Vending Machine Operating Licenses
Some states require you to have a seller’s permit to operate a vending machine business. Furthermore, many states require you to charge sales tax on the items in the machines. For example, in New York, the sale of food items in a vending machine is generally taxed in the same manner as the identical item in a store. Exemptions to this rule include hot beverages and items that are sold for $1.50 or less.
Choosing the Proper Equipment
The type of equipment you buy must fit the location that it is in to be profitable. For example, if you buy an old-style machine that takes only coins but place it in an office building, you won't gaining the maximum profit that you can because the people at this location don’t typically carry around loose change. A vending machine that includes a credit card reader with remote monitoring is a better choice. According to a recent report by Vending Market Watch, consumers spend 32 percent more when paying with a credit card versus cash.
Remote monitoring also allows you to check from home on the products that are selling and know when they need to be restocked.
Consider getting a conveyor belt vending machine to prevent snacks from getting stuck and to allow you to change the width between products so that you can include a wider variety of packaging types.
Choosing the Right Types of Products
The type of products varies widely depending on your target customer and location. For example, one new trend in vending machines is healthier eating options such as Planters Sunflower Kernels, Baked Lays Original and Sun Chips Original. In general, consider these five things when choosing your products:
Taste. This is the most important thing to consider. If the type of food doesn’t match the demographics in the location for the vending machine, you won’t sell a lot of products. Do some local market research to make sure you are selling the right items.
Nutritional value. With the healthier eating trend, make sure to find good alternatives to traditional junk food. These may be requirements in certain locations such as schools and hospitals.
Low cost. Keep the cost of your products relatively low by buying your inventory directly from the manufacturer. Check with Candymachines.com for bulk candy, or SmartVending for a full line of supplies.
Brand recognition. Customers are more likely to buy a product they are familiar with. Include well-known name brands in your product mix.
Uniqueness. Customers may get bored of the same products all the time. Occasionally add new items.
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About the Author
Michael is a writer in various subjects. He is a mechanical engineer and freelance writer, having earned a Bachelor of Science in Mechanical Engineering from Washington University in St. Louis. His articles have appeared mostly online.
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candy image by Soja Andrzej from Fotolia.com
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Flanagan, Michael. 'How to Start a Vending Machine Business Without Franchising.' Small Business - Chron.com, http://smallbusiness.chron.com/start-vending-machine-business-franchising-4536.html. 04 March 2019.
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Flanagan, Michael. (2019, March 04). How to Start a Vending Machine Business Without Franchising. Small Business - Chron.com. Retrieved from http://smallbusiness.chron.com/start-vending-machine-business-franchising-4536.html
Flanagan, Michael. 'How to Start a Vending Machine Business Without Franchising' last modified March 04, 2019. http://smallbusiness.chron.com/start-vending-machine-business-franchising-4536.html
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