Vending machines, with their increasingly diverse array of products, hold lucrative prospects as a new business. There is no need to pay staff, rent or utilities. So the startup-costs are low with only the machine price and maintenance to take care of. Any other business barely offers a similar sustainable income stream despite low involvement once you are set, along with low risks and great expansion opportunities. You may also like to read How to Start a Restaurant Business?
If placed before the right people in a well-researched location with the right items. A vending machine can help you passively earn significant income even while you devote time and effort to other important things. So if you are excited about how to start your vending machine business. Let’s make sure you start off on the right foot!
Start a Vending Machine Business
Essentials for Starting a Vending Machine Business
Although this business may sound a very easy one to get-go with, proper planning will help you run your business efficiently. Factors such as your financial situation, choosing the most viable location and product(s) for vending, determining the type and size of your machine. Being prepared to properly manage your inventory and other records, are things which must be planned in advance.
Discovering your Location and TG
Strategically placing your vending machine in a good location should be your first and foremost concern when planning how to start a vending machine business.
Take a tour of the area where you want to do your business. Do extensive research and analyze the people you are targeting. Remember your goal is to find the niche audience whose needs you would aim to fulfill. For instance, if your area has a park with lots of visiting children. You might want to place a food and beverage vending machine for the parents accompanying them. Who might want to grab snacks for themselves or their kids or place a toy vending machine. Based on your findings of what’s more likely to sell at that specific place.
Consider your budget when deciding the location. The size of the machine and features that must be offered have to align with the TG in your contemplated locations. If you are aiming for big hotels, a small or second-hand machine with basic features will be unfit. So weigh your options keeping all relevant factors in mind.
A great location does not have to be a big location. You simply need a combination of favorable characteristics. High foot traffic means lots of people will be walking by the machine, leading to sales. Easy access to the machines with signs for customers to find the equipment will increase the likelihood of more and more people coming to get your items.
Locations that don’t have convenient stores or other food options nearby but have a lot of crowds are ideal, making your vending machine the only or among the few options available. Places, where people wait for long periods of time, like car repair shops or hair salons, are also great! Places with business in multiple shifts mean your machines can potentially be used for 24 hours a day!
Don’t forget to find estimates on the commission fee that may be required to be paid for using the location. The place where you are likely to be placing your vending machine may be owned by someone else. Thus, they would probably want to collect a commission from your income. Generally, high demand locations will require you to pay around 20% of your earnings, but you must hustle to get to the minimum cost.
Portray the benefits to the location owner in his own business due to your machine supplying refreshments or other utilities that would probably increase their customer satisfaction. If persuasion and negotiation skills play out, with a stroke of luck, you might even find a spot for free!
Once your location is locked, research the relevant laws in your state. Check out local regulations on the internet or take help from someone familiar with these matters. Go carefully through any contracts with the location owner prior to signing. Read all the terms and conditions, especially the commission fees quoted.
Getting Your Machine At A Fair Price And Stocking It
Purchasing vending machines are an online search away. Call the local and national suppliers to gather intelligence about the prices and offerings. Take account of the stocking costs that will dictate your profit margins as you grow your business. The size, type, and features you would need for your machine will be dictated by the location you have finalized.
Vending machines now come with state-of-the-art features. Which include voice command recognition, touch accessibility, interactive screens, and credit card reading facility, to name a few. If your budget can accommodate these features, you’ll be ready to provide better service to your customers. Thereby attracting new and returning customers.
The relatively low entry barriers draw many people to consider how to start a vending machine business. However, you need at least $2500 to take your business off the ground. Brand new machines can even cost around $10,000 each, excluding the inventory. If you don’t have that amount of money, you may consider financing options. Calculate your tentative costs, as well as required inventory cost before you look into your financing options.
Equipment financing and Short-term loans are two possible financing options to give you a runway as you prepare how to start your vending machine business.
Before purchasing your inventory for stocking your machine, factor in your national and local trends to have an edge. Refer to general consumption behavior, economic reports, newspapers, etc. to help you decide what items to stock in your vending machine for maximum sales potential.
Finally, learn from your experience as each day goes by, and improvise whenever and wherever required. Maintain an excellent relationship with your location owner. If you manage to uphold diligence and thinking on your feet. In no time you’ll be able to expand and successfully make a living from your vending machine business.