Setting Up Your Own Vending Machine Business: A Step-by-Step Guide
For many of us, vending machines are a normal and uninteresting part of everyday life. For those who are always on the go, they are a convenient means of getting a quick lunch or snack. But where do they come from? Who put them there? And what do they want?
Some say they’re robotic government agents, their buttons designed to extract our DNA for cloning in an underground bunker. Others whisper that they’re members of an ancient alien race. Banished from their own planet by their chocolate dispensing kin, they’ve descended on Earth, where they can ingest delicious metal circles free from persecution.
The truth is actually quite simple. For the most part, vending machines are run and maintained by normal people. Whatever your day job, a vending machine business can be a great side venture. With low start-up costs, decent profit margins and rapid turnover, vending machines are a reliable way of earning some additional cash. In the following article, we’ll talk you through the 6 steps of setting up your vending machine business.
Step #1: Decide Between Freelance or Franchise
The first step is deciding whether you want to work as part of a franchise or start your business from scratch.
Choosing to work for a franchise means that you buy all the products and equipment from a single company. There are countless franchises out there, selling everything from coffee to electronics.
With franchise schemes, you pay an upfront lump sum. Depending on the scheme, this could range from £700 – £100,000. Different schemes offer different packages. However, for the most part, you can expect to have a first batch of products, vending machine(s), training and live support included in any package.
On the one hand, the support offered by franchises can be really helpful if you want some guidance. Furthermore, the training they offer in how to handle products and machines is useful. On the other hand, profit margins can be low and franchises’ vending machines tend to be overpriced.
If you are interested in working for a franchise, check out the following link: https://www.franchisedirect.co.uk/vendingfranchises/209
If you decide to go freelance, you’ll have to source the products and vending machines yourself. Although this will, initially, be more time-consuming, it’s likely to be more profitable in the end.
Most of the equipment is easily available. Products and machines are commonly sold on eBay. Machines range from £30 for manually operated models to £3000 state-of-the-art vending equipment.
If you don’t want to risk buying a second-hand machine, the following websites are great for high quality, brand new machines as well as accompanying products:
Step #2: Choose Product
When people think of vending machines, they tend to picture food and beverage dispensers. However, business owners should also consider other ideas. The types of products you can sell are generally separable into three categories.
Food and Beverage
These are the most commonly sold products. They’re a safe bet simply because convenience food is always in demand. Good profit margins and quick turnover is likely.
‘Bulk’ products include things which are sold en-masse like bubble-gum, small toys and stickers. Start-up costs tend to be very low for these products because the equipment needed is smaller, more basic and therefore less costly. Profit margins per sale are lower.
Whereas in Japan vending machines sell just about anything, in the UK vending machines dispensing speciality products are less common. ‘Specialty’ goods include anything from electronics to underpants. Demand for unusual products is by no means guaranteed but if you pick a popular product, you can expect some seriously high profit margins.
Step #3: Choose Your Vending Machine
The machine you choose will depend mainly on the product you’re selling. If you’re selling bubble-gum, you’ll be able to opt for one of the cheaper machines which can cost as little as £30. If you’re looking to sell larger items, such as food, prices generally start at £300 for second-hand machines.
Even then, there’s a huge variety of machines on offer which all have different features. Here are some things to consider:
- Do you want voice activation?
- Does it have a card payment option? (Very important)
- How old is it? Is it in good condition?
- Does it come with accompanying manuals?
- How will you transport it?
- Is it compatible with your product?
Step #4: Choose Your Location
Location is even more important than the product. You could be selling great goods but if there’s no footfall, nobody will buy them. A good idea is to list some potential locations and what you’d want to sell there. For example:
station: Phone chargers and travel items
Gym: Energy drinks and protein bars
Petrol Station: Bubble-gum dispenser
Staffroom: Coffee, snacks and stationery
Then, research and visit these locations. Identify which has the most footfall and whether there might be a demand for your product.
Step #5: Approach Business Owners
Once you’ve narrowed down your list, you can approach business owners and pitch to them your ideas. You need to convince them that having a vending machine in their establishment will genuinely benefit them. How you go about this is completely up to you. Here are some tips:
they take X% of profit
– Explain how it will attract more customers to their business
– Demonstrate knowledge of products and machinery
– Emphasize that you’d always be available if it breaks down
Don’t worry if some business owners say no. This is to be expected. Eventually, you’re bound to find someone who is as enthusiastic as you are!
Step #6: Start Selling
You’ve bought your products and vending machine(s), chosen a location and found a willing business owner. You’re ready to go.
In the first few weeks, visit your machine(s) regularly to monitor how fast products are being sold and whether the machine is working properly. It’s also good to discuss with business owners ideas for new products if business is slow.
Once one machine starts making money, you can expand and buy more. Before you know it, you’ll have your own vending empire!
Learn the Maintenance: When you buy your machines, read up on its associated manuals and get to grips with how to fix different problems. By not hiring a technician, you will save heaps of money.
Obey the Law: Different councils will have different rules about what you can and cannot sell. For example, it’s unlikely that you’ll be able to sell chocolate bars in a school. Check with your local council if you are unsure.
Join the Community: You’re not alone in this huge industry. Regularly check websites like Planet Vending for news and tips.