| It's time to turn our attention to whether vending is a | | | | don't try to reinvent the wheel. . .at least not at first. |
| viable business to enter, as well as the average cost | | | | Work a proven system until you achieve profitability, |
| for a very important part of the business: the vending | | | | then implement new systems to improve your |
| machine. | | | | economies of scale. Don't fall into the trap of believing |
| Is vending a reliable business venture? | | | | that the rules of the business do not apply to you. |
| The first recorded vending machines date back to the | | | | So what do vending machines cost? |
| first century B.C., but came to prominence in the late | | | | The first criteria in determining cost depends upon the |
| 1880s. These were primarily postcard and gumball | | | | location for which the vending machines are destined. |
| machines with simple mechanisms, a single selection | | | | Most successful vending operators have a formula to |
| and accepted one coin. | | | | determine the value of the equipment to be placed into |
| The snack and soda machines we recognize today - | | | | a given account. In our surveys of hundreds of |
| multi-selection, accepting multiple coin types, dispensing | | | | companies, we have found that most operators want |
| change - originated in the 1940s. In the '40s, of course, | | | | to pay off the equipment with 9 months' profit from |
| vending machines accepted coins only, did not | | | | the vending machine account. This equates to about |
| dispense change, and limited selections about 20 items. | | | | half of the gross sales for a 9-month period. If they |
| These were fully mechanical vend mechanisms and | | | | project an account to do $10,000 in sales in 9 months, |
| required no power to operate the vend cycle. | | | | then the equipment cost should be $5,000 or less. Less |
| Early soda machines required power to refrigerate the | | | | effectively produces more profit from your vending |
| product. The modern vending machine design with | | | | machine investment. |
| spiral dispense, full change capacity, dollar bill | | | | Now that you have a budget (based on your |
| acceptance (usually by dollar bill coin changer), 30-40 | | | | agreement with the customer), it's time to find the |
| snack selections, and up to 10 soda options, came to | | | | vending machine equipment. You have two basic |
| being in the late 1960s and was refined in the 1970s. | | | | choices: |
| Improvements in vending machine technology since | | | | |
| have been based on electronics and computer | | | | 1. Used vending machine equipment |
| innovation, with standardization of protocols and | | | | 2. New vending machine equipment |
| improvements in currency acceptance. Ultra-modern | | | | New vending machine equipment is straightforward: |
| vending machines can accept a variety of payment | | | | find the brand and model you feel comfortable with. |
| types - credit cards, large denomination bills (up to | | | | New equipment ranges from $2,000 to $10,000 per |
| $100), cell phone charges (charging a product to your | | | | vending machine and depends on the type of machine, |
| cell phone bill) - can be monitored remotely by Internet, | | | | as well as its options. Types include snack machines, |
| can produce sales figures to individual unit numbers | | | | soda machines, refrigerated machines, frozen food |
| (sold 13 Snickers and 8 Doritos out of this machine last | | | | machines, change machines, and more. Options include |
| week), log machine entry times, and can even provide | | | | payment methods, size of vending machine, number of |
| surveillance with camera technology. Yes, we've come | | | | selections, electronics packages, and so forth. |
| a long way, baby. | | | | Used vending machine equipment has many options on |
| So how is this history lesson relevant? Vending | | | | pricing, from free to several thousand dollars. With all |
| machine technology is responding to market need. The | | | | used machines, make sure you have a clear title. Be |
| successful vending operators have driven this | | | | extremely careful in buying a branded machine (Coke, |
| technology with their purchasing habits. Like all | | | | Pepsi, M&M, etc.), because many of these |
| businesses, if technology affords a profitable | | | | machines are owned by the brand company, which |
| advantage, that product has a market. The fact that | | | | retains ownership rights. If you purchase one of these |
| the vending machine manufacturers have continued to | | | | machines, you could find yourself either losing the |
| produce better and better machines means that the | | | | machine without compensation, or heading to jail for |
| vending business is a reliable venture when run | | | | possession of stolen property. |
| properly. | | | | Most free vending machines have been abandoned |
| Like all businesses, proper operations is the key to | | | | when an operator went out of business. You can also |
| success. Learning about your account market, the kind | | | | find operators selling their vending equipment through |
| of locations and businesses you serve, learning about | | | | the want ads. Both of these venues generally require |
| marketing, the product you are you going to sell, and | | | | a tremendous amount of work to get the vending |
| the type/s of vending equipment you'll use, all these | | | | machine location-ready. While the initial cost might be |
| factor into the success of your vending machine | | | | low, the time and repair costs can be excessive, |
| business. | | | | making other alternatives actually less expensive in the |
| There are thousands of successful vending companies | | | | long run. |
| in the United States, and if you think the vending | | | | Reputable used vending machine equipment suppliers |
| business is for you, offer to work for a company in | | | | sell equipment at several levels: as-is, as-is working, |
| another city for free. For free, are you kidding?! Instead | | | | refurbished (several levels), and like new. As-is and |
| of taking that week's vacation on a cruise, work for a | | | | as-is working are similar to free machines or those |
| vending company: learn all you can about every | | | | found through want ads. I don't suggest these options |
| aspect of the business - load trucks, fix machines, look | | | | unless you are a highly skilled mechanic with access to |
| at the accounting, install machines. Pay attention to the | | | | a large parts inventory. |
| products sold, the order in which they go into the | | | | Instead, I suggest you concentrate on refurbished |
| vending machine, find out what sells best, ask | | | | vending machines. Select the refurbishment level that |
| questions. The real-world education you will receive will | | | | the customer needs, and stick to your pre-determined |
| be invaluable. One week's worth of effort can literally | | | | budget. Expect to pay at least $1,000 per machine. |
| save you hundreds of thousands of dollars. (And an | | | | And don't forget shipping, which can be considerable |
| operator in a different city than yours won't feel | | | | and is a part of the cost of vending machine |
| threatened by your business plans.) | | | | equipment. |
| The vending business is an established industry, so | | | | |