The Free Vending Business

Guide
Author Steve Sutherland
Copyright 2012
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Legal Notice/Disclaimer/Disclosure
Copyright 2012 Steve Sutherland. All Rights reserved
No part of this publication may be sold copied reproduced stored in a retrieval
system or transmitted in any form or by any means including electronic
mechanical photocopying recording scanning or other!ise !ithout prior
!ritten permission from the author.
All trademar"s mentioned in this report are the property of their respective
o!ners.
#he information contained in this guide represents the opinions of the author. #he
author has made all reasonable efforts to ensure that the information is correct
and up to date. $o!ever it cannot be guaranteed that this is the case and !e
ma"e no representations or !arranties !ith respect to the completeness or
accuracy of the follo!ing information. %y reading this guide users ac"no!ledge
that they cannot hold the author or publisher liable for any losses suffered as a
conse&uence of their actions. #his information is intended for educational
purposes only and should be used at your o!n ris".
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Table of Contents
1' (ntroduction ) Read #his *irst................................................................................+
2' ,ending -achine (ndustry .vervie! ..................................................................../
+' #en Reasons to Start a ,ending %usiness...............................................................0
/' 1hat to Consider %efore 2ou Start......................................................................12
3' $o! to Name 2our %usiness................................................................................14
4' *unding .ptions...................................................................................................10
0' %uy a ,ending Route or Start your .!n5............................................................2/
10' Sample %usiness 6lan #emplate.........................................................................24
11' Some 1arnings about Scams............................................................................+2
12' 7ro!ing 2our %usiness 1ith Charities...............................................................+8
1/' Suitable -achine 9ocations.............................................................................../0
18' 1hat to Consider !hen 9ocating -achines....................................................../+
13' #ips for %eginners............................................................................................../3
14' (ncome .pportunities : ;arning Si< *igures.......................................................80
1=' A %uyers 7uide to ;&uipment............................................................................8+
10' 7ood 6roducts for ,ending -achines...............................................................83
20' ,ending %usiness Contracts...............................................................................80
21' Customer Service...............................................................................................32
22' >nderstanding -ar"eting..................................................................................38
2+' *orms and Standard 9etters...............................................................................30
2/' ,ending %usiness %oo"s and 7uides..................................................................42
2/' Additional (nformation......................................................................................4/
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1) Introduction Read This First
1elcome?
-y name is Steve Sutherland. ( did some research into the vending machine
industry bet!een 2000 and 2011. ( still haven@t opened a vending machine
business as ( ended up going into other areas of business. $o!ever ( still thin"
that vending represents an e<cellent opportunity and ( may get in at some point
in the near future.
1hile ( !as researching vending business models ( too" a lot of notes and chatted
!ith a fe! vending machine business o!ners. #he follo!ing guide contains the
information that ( uncovered.
Some of the content in this guide is fairly generic business advice and other parts
contain information that is specific to vending business o!ners. #here is a table of
contents so you can go straight to any particular topic that interests you.
(f you are loo"ing for more information chec" out Vendingorg Athe >S industry
association' as !ell as !tartaVending"i#com Athis guy also has some a!esome
information that is &uite different from !hat you !ill read belo!'.
(t can be hard to find good &uality information on ho! to get started as business
o!ners in this industry are usually fairly secretive. %usiness o!ners !ill never let
on ho! good they have it or share information as they fear that ne!comers !ill
steal locations or ideas from them.
(f you have a desire to start a vending business they ( strongly encourage you to
pursue your dream. Read on and find out ho! you can Boin this elite group of
entrepreneurs !ho have achieved the lifestyles and incomes of their dreams
through the placing and servicing of vending machines.
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$) Vending %achine Industr& '(er(ie)
%y some estimates over forty billion dollars is dropped
into machines by Americans every year. A vending
machine business represents a great opportunity for
entrepreneurs to start a home:based business !ith
realistic profit potential. Smart businessmen and
!omen realiCe that &uarters and dimes can &uic"ly add
up to a lot of money !hen you o!n doCens of machines
in good locations.
* +ro)th Industr&
#he vending industry in the >S has gro!n at a
phenomenal rate over the past fe! decades and that
gro!th rate loo"s set to continue !ell into the future.
#his gro!th is driven by an e<panding population an e<panding variety of ne!
vending concepts and the increased need for convenience. An increasing variety of
payment options also no! means that consumers never have to pass up on a
machines offerings due to not having any coins in their poc"ets.
Recession ,roof-
-ost sectors !ithin the industry are seen as being insulated from economic
do!nturns due to the fact that they are price competitive !ith retailers. ,ended
products such as coffee often represent a much cheaper option compared to
retailers.
Com.etition
#he industry is certainly competitive li"e any business is but competition is not
al!ays a bad thing. (n some cases vending machines placed in the same location
mutually support each other by forming bloc"s that offer better variety value and
convenience than nearby stores.
* !easonal "usiness-
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#he industry is not seasonal overall. Certain machines doing hot or cold beverages
for e<ample certainly !ill fluctuate in sales volume throughout the year. Some
locations can be better in summer or !inter. Don@t forget that some locations may
completely close do!n for short vacation periods leaving you !ith no sales at all.
Regulations and Com.liance
Some states re&uire vendors to have a business license Ausually around E100'
sellers permit a sales ta< license or all of these things. %efore you start a vending
business you should in&uire and find out ho! to comply !ith local regulations.
Depending on !hat products you are vending you may also have to comply !ith
your local health authorities.
-ost vending business o!ners go for sole proprietorship but a limited liability
company also has advantages to offer. (t is best to spea" to an attorney or an
accountant and try to determine the best legal operating structure for your
situation.
!tart u. Costs
Start up costs in this industry are reasonable. (t is possible to start a vending
machine business for less than a fe! thousand dollars. $o!ever if you have more
funding available then obviously you can start off in a better position and gro!
much faster.
The Nature of Vending /or0
#he !or" of a vending machine business operator can be divided into t!o basic
areas. *irstly there is the maintenance and re:supply of the machines that the
o!ner has in various locations. Secondly operators have to continually find ne!
locations to place even more machines.
As a vending machine business o!ner you can choose to !or" by yourself !ith a
partner or hire teams to !or" for you. -ost highly successful business o!ners in
this area ta"e on a sales role continually trying to get more of their machines out
there !hile they hire teams to re:stoc" machines and maintain them !hen
re&uired. (f you !ish to hire staff to collect cash and re:stoc" machines then you
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need to develop systems to account for inventory and cash so that your staff don@t
ta"e advantage and steal from you.
%achines and Re.airs
#he great thing about vending machines is that they are essentially your best
employees. 2ou can have a great deal of success even as a sole operator !hile
leveraging on the productivity of your machines. ,ending machines never need
vacations and only re&uire electricity to function in some cases Ainstead of a !age'
and are thus the ideal !or"ers.
,ending machines do have to be repaired from time to time and if you are not
technically inclined then you !ill need to hire someone to do this. $aving
machines that are not functioning correctly for a period of time can result in your
business losing sales volume and locations.
Customer !er(ice
(t is essential to treat your clients !ell. #his !ill not only ensure that you are able
to maintain their account but may also lead to ne! business through referrals.
Customers hate it !hen they put money in a slot and nothing happens. (f the
manager responsible for the place !here your machine is located gets too many
customer complaints then they may decide that having vending machines on:site
is Bust not !orth the hassle.
The Im.ortance of +ood Locations
9ocations for machines often don@t come free. Sometimes operators find that
employers !ant to have machines on site as a convenience for staff and allo! you
to be on:site for no charge. -ore realistically though companies and other
locations may charge you a small fee for electricity or ma"e you pay a set amount
into a @social club@ or charity fund.
Some business managers !ill insist on a share of your machines profits and may
demand any!here from 8F to /0F commission for giving you the privilege of
ta"ing up a small part of their valuable floor space. $o! much you can pay for the
right !ill depend on ho! much e<posure and therefore ho! many sales your
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machine is going to get.
1or"ing !ith a vending machine charity can help you to secure ne! accounts.
Charities are often happy to have vendors represent them in e<change for a
donation !hich can be set as a percentage of machine ta"ings or a flat rate per
machine.
A good location !ill see the o!ner visiting fre&uently to re:stoc" the machine. A
!orth!hile spot should allo! the o!ner to collect at least E40 in cash each time
they visit other!ise it is not !orth the o!ners time.
#he most profitable machines for a vending business o!ner !ill be the ones that
are in busy locations that they are !ell suited to. #hey !ill have large capacities
not re&uire a lot of servicing and have products !ith the best mar" up. #hey !ill
also offer a range of payment options and offer a good variety of products in a
minimal space.
* Cash "usiness
,ending is a cash business and aside from the hassle of having to ban" large
volumes of coinage business o!ners benefit by being paid up front for their
products instead of having to chase customers up over bad debts.
As vendors are carrying large amounts of cash though they are increasingly having
to loo" at solutions for their security.
Franchise or Inde.endent-
Ne! entrants to the industry !ill have to decide if they !ant to start a vending
business from scratch start out !ith a franchise or buy an e<isting route. Due to
the number of scams in the vending industry over the past fe! years it is advisable
to put in the hard !or" yourself and go it alone. #here are many shar"s out there
offering unrealistic promises to naive ne!comers and ripping them off so you
must avoid these people.
Industr& Challenges
Challenges facing the industry include the continual do!nsiCing of businesses.
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#here is a trend for factories and offices to hire fe!er and fe!er people and more
people are starting to !or" from home. #his can ma"e great locations harder for
operators to find.
,ending also generally has a bad reputation. -any people have had bad
e<periences over the years !ith vending machines. #he general feeling among
large parts of the population is that vending machines are often unreliable. 6eople
feel li"e if something goes !rong it is almost impossible to contact operators and
that they have little chance of getting their money bac". -any established vendors
are starting to address these issues but there is still much that can be done to
improve the industries reputation among consumers.
* "right Future
#he vending industry in the >S and internationally should continue to e<pand
rapidly over the coming years. *or smart entrepreneurs !ho are prepared to put
in some initial effort starting a vending machine business represents an
opportunity that is limited only by the o!ner@s drive and imagination. Some !ant
to run a small route and only !or" three of four days a month !hile others !ant
to build an empire. ;ither !ay vending is one of the more attractive business
opportunities around for Americans today.

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1) Ten Reasons to !tart a Vending "usiness
A vending machine business !hen set up and managed
!ell can be an e<tremely profitable venture for an
entrepreneur. #here are many reasons to start a
vending machine business and in this section ( e<amine
!hy the industry is so attractive.
,assi(e Income
-any people perceive a vending machine business to
be one that runs on autopilot and assume that they !ill
be able to sit bac" rela< and have a bunch of machines
ma"e money for them. (t doesn@t al!ays !or" out li"e
this though. -ost business o!ners in this industry find
out that it does ta"e a fair bit of !or" before you can
put you feet up and enBoy an income that is semi:passive.
No Income Ceiling
-any people are dra!n into the business by the earnings potential. As !ith any
small business the o!ner can decide ho! much effort they !ant to put into the
business and thus ho! much profit they !ill ma"e. Rather than having your
earning capacity capped !ith a salary structure in the !or"place that is hard to
brea" out of the s"y is the limit in terms of income !hen it comes to running your
o!n enterprise.
Choose &our !chedule
,ending business o!ners can to some e<tent decide their o!n !or"ing schedule.
2ou !ill have some limitations as to !hen you can access areas !here your
machines are located. $o!ever once you are set up you can basically !or" the
hours or days that you !ant.
Freedom from the "oss
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(t is refreshing to not be directly under the control of an employer and to be able
to control your o!n destiny. 2ou !ill al!ays be ans!erable to someone in business
though if you !ant to be successful.
(n the vending business you !on@t be ans!erable to customers as much as you
!ould be in other industries. $o!ever you !ill have to !or" hard to "eep people
happy if they are giving you the right to locate your machines on their property.
*(oid the Dail& +rind
2ou can escape the grind of a nine:to:five Bob and the commute that goes along
!ith it by having the freedom to schedule trips during off:pea" hours. 2ou can also
target machine locations that are !ithin a reasonable drive time from your home
base.
%inimal !tart u. Costs
Start up costs can be "ept to a minimum and you can even get started in business
!ith a fe! basic second hand machines for less than a thousand dollars. As you
!on@t have the overheads that other businesses face you !ill find that there is
much less do!nside ris" in vending. 1hile high profits are not guaranteed it is
unli"ely that your business !ould become insolvent as monthly costs are relatively
minimal if you run your business from home.
* Cash "usiness
,ending is a cash business and this gives operators an opportunity to very easily
avoid ta<es or pay a lot less than !hat they are supposed to. 1hile not all vendors
are dishonest !ith their ta<es this is undoubtedly one of the reasons !hy vending
is attractive to some.
Lo) "arriers to 2ntr&
Aside from machine repairs the !or" involved !ith a vending business is relatively
simple and anyone can master it !ithin a short space of time. #hat fact that no
&ualifications or specific training are needed to run this "ind of business is one
reason that attracts many people.
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Choose &our Co)or0ers
Avoid the stress of !or"ing !ith a group of people that you may not get along
!ith. As a vending business operator you may be happy !or"ing alone or you may
!ish to select a partner or team to help you.
#here are so many different reasons to start a vending business and every
entrepreneurs reasons !ill differ. As an industry it can offer so much to those !ho
are prepared to !or" hard learn the ropes and gro! their businesses over the
long term.

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3) /hat to Consider "efore 4ou !tart
#o most people vending represents an easy opportunity
to ma"e money !ithout a lot of effort. #his assumption
is far from the truth though as most vending business
o!ners !ill tell you. Some people are more suited to
this industry than others and in the follo!ing article (
loo" at some of the things that you should consider
before deciding that a vending business is the right
opportunity for you.
*re &ou Fit and 5ealth&-
A vending business !ill re&uire you to lift heavy obBects
!hen you install or remove machines and !hen you are
re:stoc"ing machines in areas that are not easily accessible by vehicle. Some of the
lifting re&uired may be too much for one and you may need to hire someone else
from time to time to assist. *ocus on doing tas"s ergonomically Adon@t bend your
bac" !hen you lift heavy obBects' and loo" into tools or e&uipment that can help
you to be more productive.
*re &ou 'rgani#ed-
(t ta"es good organiCation and time management s"ills to succeed in the vending
business as it does !ith most other business models. 2ou need discipline to get
out there and find ne! locations and once you have them you need to fre&uently
restoc" them. 2ou need to be able to "eep good records so that you are able to
analyCe the performance of your products and locations.
%one& %anagement
,ending is a cash business and operators receive cash up front !ithout having to
bill clients. -oney management is important here and you must be disciplined in
terms of !hat you do !ith cash !hen you receive it. (t is important to record cash
as it comes in and to stay a!are of business e<penses as they become due.
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2ou !ill also be handling large amounts of cash every day and you must ma"e sure
that you maintain a high level of security to avoid becoming a target for criminals.
,eo.le !0ills
7aining ne! locations or accounts and "eeping them is a maBor part of the
business. (f you have or are able to &uic"ly develop good sales s"ills then you !ill
be off to an e<cellent start. 2ou !ill also have to relate !ell !ith people that you
hire to !or" for you and !ith managers and staff at your locations !hen it comes
to servicing machines.
Determination
Success !ith locating machines is all about determination and !ill po!er as you
!ill receive many reBections. (t@s all about staying positive !hile you get the
e<perience that you need to refine your approach. -any people give up too soon
and never manage to place more then a fe! machines.
!elf %oti(ation
#o be really successful in vending you have to get interested and start to love
putting in the hard !or" that is re&uired to become successful. Successful vendors
are al!ays interested in ne! machine developments constantly brainstorm ne!
ideas and al!ays "eep an eye out for good locations. #he people !ho do !ell in
this industry are also the ones !ho enBoy trac"ing testing and analyCing things in
detail. %y doing so they end up !ith great locations find the most suited
machines for them and ma<imiCe profits by testing and rotating products.
Variet& of /or0
(t ta"es hard !or" to be able to sit at home and run a business on autopilot. As a
vendor you !ill have to spend time finding ne! locations dealing !ith @decision
ma"ers@ visiting suppliers to buy stoc" in bul" re:stoc"ing machines and
coordinating maintenance and repairs. #he !or" involved is varied and you have
to li"e being out on the road for most of the day !hen you are starting out.
#here is more to vending than meets the eye and ne! entrants often find that it is
not !hat they !ant to do after they have a garage full of machines. %efore you
14
invest in your first machine you should carefully research the business and as"
yourself if getting started in this field is the right move for you.

15
6) !tart u. Costs
.ne of the great things about starting a vending business is that it is possible to do
it !ith minimal start up costs. (f you do have access to considerable funding
though you could also choose to purchase e<isting routes or Bump straight into
your o!n more professional set up. Depending on ho! you !ant to "ic" off your
venture into vending getting started could set you bac" any!here bet!een a fe!
thousand dollars and several hundred thousand dollars.
A vending machine business can be started on a really lo! budget so it is best to
start off slo!ly and ta"e on less ris". 2ou can then invest more heavily once you
start earning some profit and decide that vending is definitely a business that you
!ant to be in.
1hen it comes to determining the amount of capital that is re&uired you need to
ta"e more into account than Bust the costs that you !ill face up to the point !here
you start doing business. 2ou also need to consider the operating e<penses that
you !ill have over the first si< months !hile your profits are still lo!.
(f you start out full time then you may also need to set aside funds to cover your
living costs for a period of si< to t!elve months until your business becomes
profitable.
9et@s ta"e a closer loo" at some of the start up costs that entrepreneurs in this
industry typically face.
Vending %achines
#he amount of start up funding needed !ill vary greatly depending on the "ind of
machines that you !ant to start off !ith.
.ne tric" to starting off on a shoestring budget is to start !ith candy vending
machines !hich can usually be bought very cheaply on online auction sites for
around >SE180 or less per unit. #hese machines are cheap simple to operate and
candy and gum balls offer a great profit margin for little effort. %uy them in lots of
one t!o or three at a time and slo!ly gro! your business as you find suitable
locations.
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(f you do !ant to start out !ith larger electronic vending e&uipment that vends
snac"s and hot or cold beverages then you are loo"ing at much larger start up
costs. Ne! machines for vending food or beverages range in price from around
E2000 up to E3000 per unit. As an ine<perienced operator you !ould be craCy to
buy ne! machinery and !ould be much better off leasing some machines for a
period !hile you test out a variety of locations. %uying &uality second hand
machines is also one !ay to lo!er your initial outlay.
.ther start up costs associated !ith vending machines include security loc"s
tools for a maintenance "it and e<tension cords.
Don@t forget to allo! for machine parts and repairs if you are reliant on hiring a
technician !hen the need arises.
Rent for "usiness ,remises
-ost operators start a home:based business and therefore don@t have the
overhead costs associated !ith leasing commercial premises. (f you have a spare
room for an office and some space in the garage for storing machines you should
be fine. .ther!ise you can loo" at renting storage space.
'ffice and *dministration
Depending on !hat e&uipment you already have and the scope of your plans you
!ill have to spend a certain amount on "itting out your home office. 2ou !ill li"ely
re&uire a des" filing cabinets a 6C printer (nternet connection phone
connection stationery and possibly other office e&uipment as !ell.
Vehicle 27.enses
#o service your route effectively you !ill need a suitable vehicle. Depending on the
"ind of machines that you operate you may not be able to get a!ay !ith using
your o!n car and you may have to consider leasing a vehicle. 2ou may re&uire a
larger van or light truc" for transporting machines and stoc" and you might even
re&uire a vehicle !ith a refrigeration compartment.
,rofessional Fees8 Licenses and ,ermits
17
2ou !ill be applying for licenses and permits in order to set up a legal operation
that is in compliance !ith local regulations. 2ou may also re&uire the services of
an accountant an attorney or other professionals during the process of setting up
your vending business.
!toc0
Don@t forget that most of the time the machines that you are li"ely to purchase are
empty and you !ill therefore need to buy stoc" for them. #his can represent a
considerable start up cost at first as you !ill certainly be loo"ing to buy your
inventory in bul" in order to save money.
%ar0eting and "randing
(n order to get started ma"ing money !ith vending machines you !ill need to
secure your first fe! locations. #he initial mar"eting of your business may re&uire
some spending on advertising. At a minimum you !ill !ant to get a logo designed
and have a set of business cards made up. 2our initial mar"eting efforts !ill most
li"ely involve ma"ing phone calls and pounding the pavement and the maBor cost
here !ill only be your time.
'ther !tart u. Costs and '.erating 27.enses
2ou !ill also have to figure in other start up costs and operating e<penses such as
mar"et research insurance coverage cell phone costs and possibly commissions.
Don@t forget to ma"e an allo!ance for unforeseen e<penses and price changes.
2our forecasts may be inaccurate and prices often rise over time or end up being
higher than you first anticipated.

18
9) 5o) to Name 4our "usiness
1hen it comes to starting a vending business you !ill have to come up !ith a
suitable name to represent your company in the mar"et.
(n the vending business it is important to build a brand Bust li"e it is in any other
industry and a great business name is the cornerstone of any brand. .ver time the
reputation that you build up in your name !ill be able to help you to !in more
locations and to do more sales volume if the name is recogniCed and trusted by
clients and end customers.
-any entrepreneurs leave the naming of their business to the last minute and
don@t give it the attention that it deserves.
*irstly it is important to thin" ahead about !hat your vending business may gro!
into one day. Naming your business after yourself as the o!ner could ma"e the
name no longer relevant if you end up selling your business in the future.
(ncluding the city to!n or geographic area that you serve as a part of your name
can also end up as a liability if you !ish to e<pand beyond your original region.
Some vendors incorporate the name of a charity that they represent into their
business name and !hile this can help immensely !ith branding and mar"eting it
can bac"fire if you have a falling out !ith the charity for some reason and are no
longer able to !or" !ith them.
Choosing a name that defines your product line can also be limiting if you hope to
diversify your range of products and machines in the future. #ry to come up !ith a
name that is fle<ible and !ill allo! you to move in any direction that you !ant in
the future.
Another approach to naming is to try and convey a message. %y using specific
!ording in the name you could suggest that your company provides fresh
products regularly services machines caters to all customer tastes or that your
vending machines are reliable.
9oo" at the names of all your local competitors in the vending section of The
19
Yellow Pages and online and ma"e sure that your selection is not too similar to
those of other established mar"et players. #hin" of something that is truly uni&ue
and you !ill have a better chance of standing out and being remembered.
2our chosen name should be available to be registered and not already ta"en by
any other company. 2ou should also chec" out some suitable domain names for
any future !ebsite that you may !ant to have and register one as soon as you
have made a decision.
-a"e sure that your name is simple to pronounce and that it can be clearly
understood over the phone. Run a fe! of your short:listed names past your
friends and family to see !hat they thin". #est them a fe! days later to see !hich
ones they can remember and !hich ones they !ere able to pronounce correctly.
A lot of value or good!ill !ill be built up in your name over the years so it is
important that it can continue to serve you !ell into the future. Changing your
name can be a branding nightmare so it is important that you choose a good one
the first time around.

20
:) Funding '.tions
Due to the generally lo! start up costs involved !ith vending compared to other
industries it is not a sensible idea to go too far into debt right a!ay. 2ou may need
access to credit at a later date to see you through tough times or to e<pand so it is
best to use savings to cover start up costs if possible.
$o!ever if your starting capital is insufficient you could consider one of the
funding options belo!.
Famil& and Friends
(f you do need funding then a loan from friends or family !ould be the best !ay to
go. (f they have a lot of trust in you and you are sincere !ith them this
arrangement can !or" !ell. (f things go bad though you can ris" losing a lot more
than your business.
In(estors
Alternatively you could loo" at ta"ing on an investor and giving them an o!nership
sta"e in your business. 6otential investors !ould probably !ant to see a detailed
business plan. #hey may also !ant to have an active role in the management of
the business in return for their investment. *or the small amount of funding
re&uired you are usually better off having 100F o!nership of your business and
having full control.
Distributors
,ending machine distributors !ill often offer you financing plans to help you to
purchase their machines. (t is li"ely though that you !ill be re&uired to come up
!ith the money for a siCable do!n payment. (f this is not possible then the
distributor@s finance company may be able to offer you financing to cover most of
the cost providing that your business plan loo"s strong and that you have some
collateral to offer.
2ou !ill also find that some of the distributors that you are able to purchase
21
inventory to stoc" your vending machines !ith can sell to you on credit.
Depending on the deal that you !or" out !ith them you can usually arrange to
pay your invoices !ithin +0 days ANet +0'. #his is usually only possible if you have a
good credit history and are able to sho! references.
"an0 Loans
See"ing a ban" loan is another funding option open to some. #o have the best
chance of being approved you should apply at a ban" !here you have a good
account history have a detailed business plan to sho! them and sho! a
!illingness to be able to fund at least part of the start up costs out of your o!n
poc"et. 2ou !ill also li"ely need a guarantor or an asset that can be used as
collateral.
+o(ernment Loans and +rants
(n the >S there are government agencies that offer small business loans !ith more
favorable terms than ban"s. #he Small %usiness Administration can also help to
secure a loan for your business.
#here are also business grants if you are luc"y enough to &ualify and these often
don@t have to be repaid at all.
.f course these government loans and grants are not easy to get due to high
numbers of applicants. $o!ever if you are able to sho! a solid plan for your
vending business and you can prove that you !ill be doing some good in the
community then you !ill stand a better chance of &ualifying for this funding.
Credit Cards
9astly for those !ho have no other options a variety of credit cards can be used
to get cash advances and this money can be used for funding your vending start
up #his method is ris"y though and due to the high interest rates involved you
should only do it if you are reasonably sure that you can start paying siCable
amounts off the debt !ithin a fe! months.
1hatever methods you turn to for funding the start up costs of your ne! vending
business ma"e sure that you value every dollar and ensure that it is spent !isely.
22
;) %ar0et Research
-ar"et research is all about getting a better understanding of the mar"et that you
are planning on entering. A mar"et is made up of both customers as !ell as
vending operators. 2ou need to understand the current state of affairs in order to
allo! yourself to position your ne! business for success.
2our mar"et research !ill help you to identify some of the ris"s and opportunities
in the mar"et. (t !ill help you to identify good locations and the "ind of machines
and products that !ould do !ell in them.
$iring a mar"et research company to put together a report on the local vending
industry !ould be great. #his option is cost prohibitive though so it is more li"ely
that you !ill end up doing your o!n investigations.
1hen it comes to starting a business mar"et research should be the first thing
that you do. $ere are some ideas on the "ind of information that you should
collect and ho! to go about it.
Demogra.hics
%efore you attempt to vend products to people in the area that you are targeting
you have to understand as much as you can about them. #his !ill help you to
"no! !here to place your machines and !hat products to offer.
(f for e<ample you are in a fairly young area !ith lots families then you might loo"
at a product line that targets children. (f the population is older then it might be
!orth trying to place machines !ithin retirement communities.
!ur(e&s
(f you are trying out a ne! vending niche it !ill be important to gather some data
from prospective customers. #his !ill help you to confirm !hether or not your
business ideas are viable and if there is enough demand.
6ut together a brief &uestionnaire and as" people !ithin your target area !hat
they thin". 1ould they be prepared to buy the products that you intend to sell via
23
vending machines5 $o! much !ould they reasonably e<pect to pay for such
items5
2ou should get the best response from your surveys if you do them in person but
you could also loo" at purchasing a database and doing them by phone or mail. #o
get a better response you could offer respondents some "ind of free gift such as a
voucher for a free coffee at a local cafe. #his may end up costing you but the
information that you end up obtaining from local prospects could be of
considerable value to you.
#ry to tal" to some business o!ners about !hether they thin" your product line
!ould sell on their premises. (f you get a positive response from them then you
can contact them again at a later date once you have started your vending
business and have machines ready to place.
!couting the *rea
.nce you have decided on the area that you !ant to target and have mar"ed out
your territory on a map go out for a fe! drives and e<plore. ,isit some of the
places !here you !ould e<pect to find vending machines. #a"e note of the range
of machines that are in place if they are being used !hat products are being
vended and ho! !ell maintained they are.
The Com.etition
Research some of the other vending players in the local mar"et. 2ou should see
their company details on the side of their machines and you !ill find many of
them listed in local business directories such as The Yellow Pages.
9earn as much as you can about their machines products and the vending
services that they offer. Call them on the phone posing as a @decision ma"er@ for a
possible machine location and find out ho! they !or" !ith their clients. Do they
offer commissions5 1hat can you learn from the !ay that they are doing their
mar"eting5 $o! can you improve on !hat they currently offer5
Don@t forget that regular retailers are also your competitors. Some vending
locations almost have a captive audience in that people either have to use the
machines or they have to !al" for 10 minutes or more to a store. 6eople al!ays
24
have alternatives though and if they don@t li"e your machines or your service they
bring products from home or ta"e the trouble to purchase them else!here.
Distributors and !u..liers
-achinery manufacturers and dealers may be able to give you specific
information relating to your mar"et !hen you are starting out.
An even better source of mar"et information !ill probably be local distributors or
the suppliers of the inventory that you use to stoc" your machines. #hey !ill be
dealing !ith other local vendors and !ill be able to tell you !hat products are
selling !ell in vending machines and !hat product combinations and volumes you
should start out !ith. .f course every location !ill be different though so you !ill
also !ant to start collecting your o!n data as soon as each machine starts ma"ing
sales.
<.dating &our Research
Don@t forget that things change. 2our initial mar"et research !ill be e<tremely
useful but it must be updated from time to time so that you "eep up to date !ith
an ever changing mar"et. Changes in demographics and product trends !ill mean
that you may have to consider s!itching machines products and locations from
time to time. Geep your finger on the pulse so that you don@t fall behind and lose
mar"et share to those that are paying more attention.

25
=) "u& a Vending Route or !tart &our ')n-
.nce you have decided to enter the vending business one of the many choices
that you !ill have to ma"e is !hether to buy a route from another operator or to
start your o!n from scratch. 2our decision !ill depend on many factors and in this
article !e loo" at the differences that you !ill be facing !ith each option.
The ,rice
(f you are buying an established business that runs !ell ma"es money and has
good relationships in place then you !ill pay for this privilege. #he cost of buying
the business !ill be considerable but if you can manage to "eep the business on
its successful course then you !ill recoup your investment over time.
.n the other hand you can start up your o!n vending operation on an e<tremely
lo! budget but it !ill ta"e time to get it profitable. (t@s all about deciding !hich
approach !ill give you the best return on the time and money that you are
investing.
!et &our o)n Course or Follo) 'thers
1hen you start your o!n business you can start it off the !ay that you li"e and
create something uni&ue that you can be proud of. %y buying a business you !ill
be inheriting the creation of someone else and all the good and bad things that go
along !ith it. #hin" about your o!n plans and goals and decide if you can use
someone else@s business as a vehicle to achieve them.
4our ,ersonalit&
Starting up a vending machine business from scratch !ill ta"e time and
determination. 2ou !ill have to learn through your o!n research and trial and
error. #his process can be lengthy before you start to see success. (f you feel that
you are the "ind of person that !ill become disheartened easily and have trouble
seeing a proBect through to the end then you may be better to start off !ith an
e<isting business that !or"s !ell right a!ay Aif you can afford it'.
26
Relationshi.s
(f you buy a vending route then you should find that it is easy to carry on the
relationships that the former o!ner !or"ed hard to establish. -a"e sure that you
have the seller introduce you to all the "ey suppliers and location managers before
you buy.
(f you are starting from scratch then you !ill have to put a great deal of time and
effort into finding machine distributors product suppliers and locations for your
machines. Starting from scratch is not as hard as it sounds though and you !ill
find numerous information resources available. 2ou may even be able to find a
successful vending business operator A!ho is not in direct competition !ith you'
to mentor you for a small fee. 2ou could also consider starting out !or"ing for a
large vending company to get a feel for the business before Bumping into your o!n
venture
Ris0
No matter !hich path you decide to follo! there are ris"s involved. #he vending
industry is rife !ith scams and rip:off artists that prey on ne!comers to the
industry. (f you are starting off independently you really have to do your due
diligence so that you don@t get ripped off by machinery dealers professional
locators or those selling phony or overpriced start up pac"ages.
9oo" into subscribing to industry publications and contact the industry association
NAMA before ma"ing any maBor purchases. Do a search online and chec" !ith the
Better Business Bureau to find out if a company that you !ant to deal !ith has
had any complaints filed against it.
.n the other hand there are also ris"s involved !ith buying an e<isting business.
,endors selling their businesses can obviously inflate figures and generally ma"e
their business sound li"e a much better opportunity than it really is to Bustify a
higher sale price. Do your due diligence here and loo" for proof that the business
is indeed performing at the level that is promised. 7et your accountant and la!yer
involved and consider getting the business valued by an independent e<pert.
#ry to find out if the o!ner has a genuine reason for selling and insist on an
arrangement !hereby the previous o!ner stays on for a fe! months to teach you
27
the ropes.
(nsist on paying the sale price in installments. 7ive yourself a !ay out of the deal if
you observe the returns from the machines over a fe! months and find out that
they are not as high as the o!ner claimed they !ere.
!tart off !lo) or Fast-
1ith your o!n vending business you !ill be able to start off slo!ly buying a fe!
machines here and there. 2ou could even "eep your day Bob for the first year !hile
your business slo!ly gro!s.
%uying an e<isting business though !ill mean Bumping in at the deep end so you
must be prepared and "no! something about managing a business if you are to
"eep it performing !ell. %y starting off small !ith your o!n business you !on@t be
committing yourself fully. 2ou can give yourself a trial period to see if it !or"s out
!ithout spending a fortune on a business that may be difficult to e<it if you find
that it is not !hat you !ant to do.
Choosing !hether to buy an e<isting vending business or to start your o!n is not
an easy decision. 2our decision !ill be influenced by your access to funding your
past e<perience in business and your personality as !ell as the level of ris" that
you are prepared to ta"e on. %oth alternatives offer you an e<cellent !ay to get
into !hat is still one of the best business opportunities around.

28
1>) !am.le "usiness ,lan Tem.late
#he preparation of your vending machine business plan !ill be the most
important thing that you do prior to launching your ne! venture.
A business plan !ill be a crucial resource that !ill help guide your business in the
right direction. A business plan sets out !hat has to happen in order for you to
reach your goals outlines ho! you !ill do it and sets out alternative plans in case
things change further do!n the line. (t forces you to do the research that is
necessary in order to find out if there really is a mar"et for the vending machines
and locations that you have in mind.
(t may be necessary to have a plan !ritten in a formal professional style if your
aim is to use it to convince ban"ers or investors to support your idea. $o!ever
even if you don@t have anything to prove to anyone your business plan !ill help to
confirm the viability of your ideas in your o!n mind.
Geep a copy of your plan on your 6C as !ell as in a file or binder in case of
emergency. Don@t forget about your business plan once you have opened your
doors for business. Refer to it regularly to ma"e sure that you are on trac" to meet
targets. Don@t be afraid to ma"e changes to the plan !here necessary.
;very entrepreneur or business consultant !ill have different ideas about ho! a
business plan should be structured. #here are many different templates available
online and some sites even have samples relating directly to the vending machine
industry. %elo! !e offer an e<ample of a suitable outline !ith section titles that
you might consider including in your o!n vending machine business plan.
Co(er and Contents ,age
Start off !ith a cover page !ith a heading to let people "no! !hat the report is
about !ho the author is and !hen it !as !ritten. (f you !ill be presenting the
report to many different people then you may consider including a personaliCed
cover letter !ith each copy of the plan. Start out !ith a table of contents so that
readers can easily find their !ay around the report.
29
27ecuti(e !ummar&
SummariCe the other sections of your business plan. 6resent some brief
information on the opportunities that you see in the mar"et and summariCe !hat
it is that you intend to do !ith your business to capitaliCe on these opportunities.
#ry to entice readers into reading the !hole report.
"ac0ground
.ffer the reader some bac"ground information on yourself and your reasons for
starting a vending machine business. 6rovide details of any relevant e<perience or
competitive advantages that you have.
2ou can also include a vending industry bac"ground sho!ing national industry
data as !ell as information about the local industry that you plan on entering.
%ission !tatement
A mission statement is usually a phrase or a couple of short sentences that
summariCes !hat your business is all about !hat it does and ho! !ell it does it. (t
is a good !ay to remember the basic goals or philosophy of your company aside
from the profit motive. A good mission statement could mention something about
the standard of your machines and products or ho! you strive to be better than
your competitors.
+oals and 'b?ecti(es
State the goals that you !ish to achieve in the short and medium terms. 7oals
could include placing a certain number a vending machines or reaching a certain
income level per machine.
!tart u. Re@uirements
Set out a list of start up costs and calculate the total amount of capital that !ill be
needed for the company to get started. Report on some of the funding options
that are available to the o!ners.
(n this section of the report you can also mention some of the other things that
30
must happen in order for the business to commence trading legally and
professionally. -ention the processes and the fees involved !ith applying for
licenses permits and other paper!or" under the la!s of the region !here the
business !ill be operating.
')nershi. and %anagement !tructure
Note !ho the founders of the company are and the particular o!nership interest
that each has in the business. *or those !ho !ill be active in the management of
the business it is important to outline !hat role they !ill play and their
responsibilities. 1ill the business be registered as a sole proprietorship a
partnership or a corporation5
"usiness '.erations
#his section of a business plan should outline the details of ho! you plan on
running the vending machine business. (nclude information on !here your
business !ill be based administration any plans that you have to hire employees
and ho! your business !ill run on a day to day basis.
(nclude details on vending machines maintenance products distributors route
planning and ho! you !ill record and manage sales data. 1hat systems !ill you
put in place to ma<imiCe productivity and efficiency5
#ry to come up !ith solid reasons !hy you are choosing a certain vending
machine product line or system. 1herever possible include some supporting
evidence from research that you have done.
%ar0et *nal&sis
>sing data from your mar"et research you can report on the current state of your
target mar"et and identify some of the opportunities. $ere you can include
demographic data as !ell as information that you have gathered from surveys and
other investigations.
6rovide information on the competition in your target area and e<amine their
strengths and !ea"nesses. 9oo" at !ays of delivering products and services via
your machines that are distinctly different from !hat your competitors are
31
offering. 7et ideas from them about !hat is !or"ing !ell and !hat isn@t. 9oo" for
a competitive edge. Don@t forget to also mention indirect competitors such as
convenience stores in:house cafeterias or food vans.
%ar0eting ,lan
.utline a strategy for creating a vending brand that !ill meet mar"et needs. %ased
on the mar"et opportunities that you see set out a strategy for meeting customer
needs in terms of locations vending machines product lines and pricing.
6rovide details on ho! you plan on getting ne! machine locations arranging
appointments !ith @decision ma"ers@ and selling your services to them. 2our
mar"eting could mostly be done by approaching decision ma"ers directly or you
could rely on advertising to generate some in&uiries.
Also outline your plan for mar"eting directly to your customers or end users.
#hese could include @point of sale@ promotions on the machine front or ho! you or
your staff !ill build relationships !ith customers !hen you visit the premises
!here your machines are located.
2ou should also mention ho! you plan on maintaining vending accounts and
customer satisfaction in the long term. Customer retention is Bust as important as
customer ac&uisition.
Financial ,lanning
>se a spreadsheet program to set out forecasts of cash flo!s in and out of your
vending machine business over a hypothetical t!o year time period. (f you have
done your research you should be able to anticipate monthly income and
e<penses going for!ard. 2ou !ill thus be able to determine future levels of
profitability and a brea" even point.
Run a variety of different scenarios that consider a conservative gro!th rate an
e<pected gro!th rate and an optimistic gro!th rate. #hings don@t al!ays happen
li"e you e<pect so it is important that you plan for a variety of outcomes.
*..endi7
32
9astly you should attach an appendi< to the report that includes any reference
letters documents vending machine pictures or other supporting material that
has been referred to in the contents of the plan. #ry to bac" up all of your
assumptions !ith proof !herever possible.

33
11) !ome /arnings about !cams
So many people perceive vending machines to be an easy !ay to ma"e a lot of
money !ith little input of time or effort. -any scams have sprung up that prey on
these hopeful entrepreneurs and many people fall for them.
1hile o!ning a vending machine business can be a very lucrative business you
really have to create your o!n opportunities. #here are so many fraudsters selling
ready:made opportunities but for the most part these systems don@t !or" or !ill
end up costing you thousands more than they are !orth. #he *ederal #rade
Commission fre&uently does s!eeps to clean up these vending business scams but
ne! ones seem to emerge all the time so you have to be!are.
(n this section ( loo" at some of these scams in detail and offer advice on ho! you
can avoid them.
%achine %anufacturers and Distributors
1hile vending machine manufacturers and distributors are mostly legitimate in
the !ays that they run their businesses they are very good at selling their
products. -any people fall for the sales tal" and end up !ith more vending
e&uipment and more e<pensive e&uipment than !hat they really needed. #his is
not a scam but merely one of the first things that you need to be a!are of.
#he best approach is to start off !ith only one or t!o machines and build up from
there. %e !ary of any company that tries to sell you a set of ten or t!enty
machines as they "no! that this is not the best move for a ne! mar"et player and
are only thin"ing of their bottom line.
!eminars and A+et Rich Buic0A !chemes
.ccasionally you !ill see seminars advertised that promise you @easy riches@ !ith
your o!n vending machine business. -ost of these seminars are not !orth
attending as they offer very little in the !ay of useful advice but rather offer hype
false promises and a sales pitch.
34
Some scams give out the impression that they !ill be employing you and
guaranteeing you a certain level of income. $o!ever if you read the small print
you !ill usually find that you are purchasing the machines by yourself and ta"ing
on the ris" Bust as you !ould !ith your o!n business.
Don@t believe any testimonials that you read or hear unless they come from a
source that you trust. Some of these vending companies !ill refer you to some of
their so called @satisfied customers@ and they !ill give you a glo!ing report on the
success that they have had !ith their methods. #hese references have often been
set up !ith people !ho are paid to ma"e false statements.
,rofessional Locators
Start out by establishing your o!n route. #here are professional @locators@ that !ill
find locations for you but many vending business o!ners have reported that these
companies almost never come up !ith !orth!hile locations that !or" out to be
profitable. After all if you !ere running a @locator@ service and found a great
location !ouldn@t you be tempted Bust to put your o!n machine at the site5
#here are some great locators out there but they can be hard to find. (f you do
deal !ith them ma"e sure that you don@t pay too much up front and that you can
inspect the locations that they find for you before paying their full fee. Some as"
for 80F of the fee up front and this is reasonable.
"u&ing Vending Routes
2ou also have to be very careful !hen it comes to buying vending routes off other
operators. 1hile this can be a great !ay of pic"ing up ne! accounts if you are not
much of a salesman there are many potential pitfalls to be a!are of. #here are
scams out there !here sellers have arrangements !ith certain locations and they
!ill sell you a route let you run it for a !hile and then slo!ly ta"e bac" all the
accounts. #he scammer usually has a deal !ith the @decision ma"er@ and they get
their account bac" a fe! months later. #his "ind of scam is not common but there
have been reports of such things happening.
2ou should ma"e sure that you go !ith the seller !hile he services his route
several times so that you get a fair idea of !hat you !ill be getting into. $aving a
contract is place !ith the client and the seller can also offer you some protection.
35
*(oiding Vending !cams
Stay a!ay from the shar"s at the beginning by sourcing your o!n vending
machines on ;bay or from other trade publications. 2ou can usually pic" up &uality
used machines for only a fraction of the price of a ne! machine.
.ne good !ay to spot a scam is to as" yourself if the offer seems too good to be
true. (f it seems too good to be true then it probably is and you !ould do !ell to
avoid it. #he (nternet is full of sad stories of entrepreneurs falling for scams and
ending up !ith a garage full of machines because the routes and systems that they
!ere promised !ere not profitable and Bust not !orth the time.
2ou should do your due diligence before entering any "ind of arrangement !ith
any vending industry company. #he Better Business Bureau !ebsite !ill alert you if
the company in &uestion has had any genuine complaints filed against it. 2ou can
also chec" the US National Automatic Merchandising Association ANA-A' !ebsite
for lists of reliable companies in the industry.
Don@t let yourself be suc"ered by scams and @get rich &uic"@ schemes. Do your o!n
independent research and be careful !ho you buy machines from. Start out by
accepting the fact that you !ill have to !or" hard to gro! your o!n successful
vending business rather than buying an @easy opportunity@ and ending up being
disappointed.

36
1$) +ro)ing 4our "usiness /ith Charities
.ne great !ay to convince @decision ma"ers@ to allo! you to place your vending
machines on their premises is to associate your company !ith a charity. #his can
often allo! you to ma"e greater profits than if you !ere to give them a
commission and it allo!s you to do some good in the community as !ell. 9et@s
ta"e a loo" at ho! your business can benefit by !or"ing !ith vending machine
charity programs.
,artnering )ith a Charit&
(t is &uite common for vending business operators to partner !ith charities. #his
ma"es your service more mar"etable and can help you to !in locations and
improve sales. (f the donations are coming directly from your business then they
are also ta< deductible.
.f course you !ill still be running a business and are allo!ed to profit. .nly a
share of your profits !ill be going to a charitable organiCation.
(t is not hard to find charities to !or" !ith these days and some of them actively
mar"et themselves to vending machine operators. Some reputable charities !ill
let you officially represent them for as little as one or t!o dollars per machine per
month.
Dealing )ith the Issue of 5o) %uch %one& +oes to Charit&
#he "ey to leveraging the charity approach is to give the @decision ma"er@ the
impression that having your machine at their location !ill really ma"e a difference
and raise a decent amount of money. (n reality though the donation that you are
giving from the machine that is on their premises !ill most probably be &uite
small.
,ending machine charity is a !in:!in situation for everyone involved but to ma"e
your business model !or" it is best to ma"e people feel li"e they are giving a lot
!hen in fact they are giving Bust a little.
37
-ost @decision ma"ers@ !ill be s"eptical until they see official documentation.
.nce they realiCe that you are a legitimate representative they !ill sometimes
!ant to "no! e<actly ho! much of your profits are going to the charity in
&uestion.
#here are many !ays of calculating the contribution that your business !ill give to
your charity partner. (t is common to donate a fi<ed rate per machine or to pay a
percentage of machine ta"ings. A fair percentage to give to charity and still
maintain profitability for your business !ould be around 10F to 18F.
-any vendors come out and state clearly to clients that they give a percentage of
machine ta"ings to charity if this is indeed the case. $o!ever a contribution of Bust
a small percentage can sound stingy to some people so there are !ays to ma"e
your contribution sound more impressive.
A better !ay is to let @decision ma"ers@ "no! your @total contribution@ to the
charity that your business is associated !ith. 2ou can say that over the last year
you have given over E8000 to the charity in &uestion. (n some cases you !ill be
able to get a letter that bac"s up your statement. (f you haven@t been in business
long you can al!ays say that your goal is to give E8000 to the charity in the ne<t
year and to achieve that you need to place a certain number of machines.
#he fact is that each location !on@t be contributing much to the charity after you
allo! for your costs and your profit. (f you allo! the @decision ma"er@ to do a
mental calculation of the small amount that their location !ill be contributing you
may be giving them an e<cuse to bac" out of the deal. Rather you should highlight
the fact that their contribution along !ith all your other locations add up to a
considerable donation every month or year.
'ther Ti.s for Vending in the Name of a Charit&
2ou should carry official charity paper!or" at all times as !ell as !ear their
badges if they have them. 1hen you hand over information about your machines
you should also give prospects a brochure from your charity. Some venders also go
as far as including the charity that they !or" !ith in their vending business name.
%e sure to not misrepresent yourself. (f &uestioned on the subBect you should
ma"e it clear that you are only !or"ing !ith the charitable organiCation and are
38
not directly hired by them.
Choose a cause that you are genuinely interested in and concerned about and
then you !ill be able to tal" freely on the topic and your passion !ill be more
li"ely to come across in the conversation. Choose a local charity if there is
something that is appropriate as people are li"ely to be more concerned about
supporting local causes.
.nce you have secured a location ma"e sure that you place the charity@s stic"ers
or other branding on your machines in a !ay that can enhance sales !ithout
obscuring the machines vending face.
-any vendors have done e<tremely !ell by !or"ing !ith charities. (f you go about
vending machine charity correctly and !ith integrity you !ill find it easier to !in
locations and thus your business !ill be more profitable.

39
11) !hould &ou ,a& Commissions-
1hen it comes to securing an agreement to locate a machine in a certain location
the @decision ma"er@ !ill often e<pect to receive a cut of the profit for giving you
the right to do so. %ecause of this natural @!hat@s in it for me5@ attitude that many
people have it is important that you have a firm policy in place so that you can
deal !ith the &uestion !hen it arises.
As you meet !ith prospective clients you should try to convince them that there
are advantages for them in having one of your vending machines on their
premises. 9et them "no! that your machines offer a service to their customers or
employees by offering them convenience and by providing them !ith reasonably
priced products. 9et them "no! that you !ould rather "eep prices do!n then
have to increase prices to cover their commission.
Some locations !ill come up !ith the logical argument that the machine !ill be
using their po!er. 2ou can counter this argument by saying that your machines are
all efficient on energy use and that you can even install timers so that they shut
do!n after hours.
Some vendors feel that commissions are too much hassle and they have a @no
commission@ policy. #hey !ill politely try to avoid the issue and if pressed they
!ould rather lose the account than give in. #hese vendors prefer to compete by
offering high &uality products and e<cellent service and a large part of the mar"et
!ill find this to be enough !ith financial compensation not being necessary.
Some vending businesses are officially associated !ith charities and this can ma"e
it difficult for them to offer commissions as !ell.
.ther vendors !ill enter into agreements that offer the authoriCing party a share
of machine ta"ings. Sometimes this is absolutely necessary in order for a vending
business o!ner to !in a large account. (f the account is really !orth!hile you can
even assure the @decision ma"er@ that they can !atch you as you empty the
machine. Some people find it hard to trust others and this should reassure them
that they !ill indeed get the full commission that they are o!ed.
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Some vendors li"e to let an account run for a !hile before they !ill discuss a
commission rate. #his reduces their ris" as they can assess ho! the machine is
performing at that location and calculate the commission accordingly.
.ther operators li"e to sign a contract !ith the decision ma"er setting out the
commission rate as a favorable part of the deal for the authoriCing party. At the
same time the vendor !ill include other clauses in the agreement that are in their
favor such as having the client agree to have machines on site for a longer
duration.
A fair rate of commission in the industry seems to be around 8F to 10F of gross
sales on po!ered machines and even less on machines that don@t re&uire
electricity. 9ocations that have an e<ceptional amount of foot traffic may e<pect
even higher rates and 20F !ould not be unrealistic for these locations. ,ending
business commissions often only add up to a small amount but having to organiCe
payment is an e<tra hassle for operators.
$o!ever you approach this issue you should ma"e sure that you set out a firm
policy before you tal" to prospective clients. %y setting your rules being consistent
and not letting clients push you around over commissions you !ill find that there
are good mar"et opportunities out there for your business !hether you offer
commissions or not.

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13) !uitable %achine Locations
,ending machines can be placed Bust about any!here and it can be very hard to
tell !hich locations !ill be profitable and !hich !on@t be !orth the time. 2ou only
need three or four people to use a machine regularly to ma"e a location
!orth!hile so it is possible to put machines in small businesses or offices and to
be re!arded for your efforts. .ther locations can seem to be busy at certain times
of the day but only get occasional sales instead of loyal customers.
#he decision to place a machine comes do!n to a combination of intuition
e<perience and luc". 9et@s consider a variety of suitable locations that you might
consider.
The /or0.lace C 'ffices and Factories
6eople need access to food snac"s and beverages during their !or"ing day.
.ffices factories and other !or"ing environments can offer great potential even
if there are convenience stores nearby.
#he ideal situation is !here you have people on the premises all day. .n the other
hand a less than ideal situation !ould be an office !ith a lot of sales
representatives !ho are out on the road for large parts of the day.
As a rule of thumb loo" for businesses !ith at least 80 employees as any less than
this number and the location is probably not !orth the time and effort.
*.artments and 5otels
9ocating a vending machine close to !here a lot of people are living or staying can
naturally be a good move and many venders specialiCe in this area. 7etting to
"no! real estate managers is the "ey here as they are in charge of numerous
properties and can usually help to smooth a deal through !ith the o!ner.
,enders report greater success in lo!er socio:economic areas than they do in
more middle class apartments. #ry to have your machines inside the common
areas of the comple< so that they can be secure at night. #he laundry is a great
42
location to have a machine as residents !ill usually spend a fair bit of time there
!aiting around !hile they do their !ashing.
!chools and <ni(ersities
Accounts in the educational sector can be very lucrative but are often tough to
get. Schools and other educational institutions usually only !or" !ith one vendor
and often have long term agreements !ith them.
-odern schools catering to students under 1= years old !ill nearly al!ays have
strict controls on the types of snac"s and beverages that can be vended to their
students. 2ou !ill have to have a range of healthy snac"s and Buices and still offer
prices that students can afford.
Schools nearly al!ays push for the ma<imum amount of commission. #hey usually
have plans to use the funds to contribute to schools proBects such as building a
ne! s!imming pool.
Retailers and !er(ice ,ro(iders
1hile some stores !ill li"e to sell their o!n drin"s and snac"s there are many
others that find that it is not !orth the hassle. A surprising number of people pass
through hair salons doctor@s clinics and other small stores and service providers. A
@!aiting room@ location can do an amaCing turnover from customers and
employees as !ell.
!ho..ing %alls
1ith a huge amount of foot traffic malls are a great place to locate machines.
-ost malls enter into high commission agreements !ith large vending companies
so it can be a tough sector for small operators to brea" into.
'thers Locations
#he main categories are covered above but there are numerous other locations
that you could consider. 2ou can pretty much locate a machine in or close to any
public or privately o!ned building and this means that the scope of possibilities is
limited only by your imagination. Airports car sales yards police stations train
43
stations s!imming pools prisons churches and par"s are a fe! of the many
options.
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16) /hat to Consider )hen Locating
%achines
#he opportunities are endless !hen it comes to suitable locations to place a
vending machine. At first glance you might thin" that the only re&uirements for a
successful location are having enough people nearby and permission for placing
your machine. $o!ever !hen it comes to choosing profitable locations for
vending machines there is much more to it than meets the eye.
/hat Dind of Locations to Loo0 For
#he first step is to sit do!n and brainstorm a list of suitable vending machine
locations in the area that you are targeting. 2ou may decide to target schools
offices or factories specifically or you may decide to ta"e !hatever you can get. (t
could be a good idea to focus on smaller to!ns or suburbs near your home !here
the vending business is not as competitive as in the city.
Route ,lanning
-ar" out your territory on a map. #he "ey to ma<imiCing productivity is "eeping
your route tight so that you are efficient !ith your driving time and fuel costs. #ry
to "eep all your accounts !ithin a limited radius of your home base or secure one
large account first and then try to get other accounts nearby.
"e 'bser(ant
Geep an eye on changes and developments !ithin the communities that you are
targeting. (t is safe to say that most obvious location opportunities !ill have
already been targeted by vending companies. #hings do change though and you
!ill find that many factors can cause bad locations to suddenly becoming good
ones. 9oo" for opportunities and be the first to stri"e.
Scope out your area and loo" for ne! buildings or ne! tenants moving into
e<isting buildings. .ne !ay to Budge potential is to e<amine the number of cars
par"ed outside a specific location. 2ou can also observe the number of staff
45
!or"ing on night shifts as vending machines are often !ell used by this group.
Do a 5ead Count
2ou can learn a lot by counting heads or observing traffic patterns. ,isit a potential
location and try to find out ho! many people are based there at various times of
day and ho! many people are coming and going. #here is a good chance that you
can ma"e a location !ith 80 employees profitable. Any less than that figure
though and you have to give the account some serious thought. 1hen !eighing
up the pros and cons of a potential !or"place location ta"e note of ho! many
employees leave the building during brea" times.
Com.etitors
(n determining the viability of a location you need to ta"e into account the
competition. 2our competitors are not only other vending machine operators but
also local retailers such as convenience stores. (f they are !ithin a five minute !al"
from your machine then you !ill be in direct competition !ith them and you !ill
lose sales to them. $o!ever the threat posed by any stores beyond a !al"ing
distance of about five minutes !ill be diminished considerably. (deally you !ant to
have a @captive audience@ in that your customers have little choice but to use your
machine.
.ther more direct competitors !ould include in:house cafeterias if you are dealing
!ith larger organiCations. *ood truc"s can also pose a threat if they stop nearby
your locations.
Demogra.hics
1hen ma"ing the decision to place a machine !e should not only be concerned
!ith the number of people !ho are nearby but !e should also give some thought
to demographics. 1e can Budge ho! li"ely somebody is to use a vending machine
by considering their age gender and the line of !or" that they are in.
6rospective vendors should note that men typically buy more snac"s and
beverages from vending machines than !omen and blue collar !or"ers in general
buy more than !hite collar !or"ers. A NA-A survey noted that around /1F of
vending machines !ere located at manufacturing locations !hile only 23F !ere
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located at !hite collar office locations.
!ur(e& a Location
(f you are really unsure about the viability of a location as" the location manager if
you could as" them and their staff some &uestions. *ind out about the
demographics of the employees their !or"ing hours and their brea" times.
Survey staff directly and as" them if they !ould use a vending machine if one !as
available ho! often they !ould use it and !hat "ind of products they !ould
consider purchasing.

47
19) Ti.s for "eginners
,ending offers entrepreneurs a uni&ue business model that can be highly
profitable smooth running and recession proof at least if they set themselves up
right from the beginning. $ere are some vending business tips for getting started
managing and mar"eting a company in this e<citing industry.
Find a %entor
#ry to get a mentor !ho already has a successful vending business. (f they are
!or"ing a slightly different mar"et or niche from yours they !ill often be happy to
help a ne!comer get started right rather than seeing them fail and do damage to
the local industry by disappointing clients or customers. Riding along and
observing an e<perienced vendor in action !ill give you a great idea of !hat the
daily life of a vending machine business operator entails.
/or0 )ith &our Com.etitors
Another tip is to forge relationships !ith other vending business operators as soon
as possible. 9oo" into trading accounts !ith them if possible so that each of you
can "eep your respective routes tight to save on time and fuel.
/or0 from 5ome
Save on start up and operating costs by starting a home:based business. Running a
vending business from a residential home should be no problem as you !on@t
have large numbers of customers or employees visiting your office. Chec" !ith
local authorities though to ma"e sure that Coning regulations for your street allo!
you to run a home business there.
!tart out ,artCTime
Run your vending business on a part:time basis before you &uit your day Bob and
go at it full time. 2ou should have no problem running a small business li"e this
around your !or"ing hours and it !ill give you a chance to see ho! it is !or"ing
out before you ta"e the plunge and go full time.
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!tic0 )ith ,ro(en Conce.ts that /or0
Don@t go for ne! vending concepts right a!ay as there is a good chance that they
don@t !or" out !ell. (t is safer to start off stic"ing !ith the traditional favorites
such as candy snac"s and drin"s until you build up a siCable business and can
afford to start ta"ing ris"s.
+et the Client "efore the %achine
#his tip can save you a lot of headaches. -any vending business operators rush
out and buy a lot of machinery and then loo" for locations that are suitable. A
much better approach is to inform yourself about a variety a machine options and
then to go out a find locations. .nce you sign up a location you can then proceed
to purchase machinery that is suited e<actly to the needs of that client.
DonAt "elie(e the 5&.e
Scams are common in the vending industry and you are better to avoid any
systems or schemes that Bust sound too good to be true.
Do &our Due Diligence
Do your due diligence. (f you buy a vending route then you should ma"e sure that
the locations that you are inheriting are profitable. Do your research and see"
proof to bac" up all of the seller@s claims.
"e 'rgani#ed
Start your business off right by implementing systems that can help you to stay
organiCed and increase productivity. 9oo" into a soft!are pac"age li"e Vend-Trak
that is designed specifically for vending machine businesses.
%a7imi#e Income from *(ailable !.ace
#he selection of products in each vending machine !ill go a long !ay to!ards
determining your profitability. Customers at each location vary enormously in
their tastes and buying decisions.
49
1hen you start off you can as" your suppliers for ideas on product variety and
volume. %ut you should immediately start "eeping data for each machine about
!hat is selling and !hat isn@t. #his !ay you can optimiCe sales and give your
customers !hat they !ant.
Aim to re:supply your machines !hen they are about half full so that you don@t
run out of certain items and disappoint customers.
"uild a "rand
.ne of the more unusual vending business tips that fe! operators pay attention to
is brand development. #oo many vendors don@t put any effort into this and
therefore lose out on a lot of opportunity. 7et a logo design so that you can brand
your vehicles machines and even uniforms.
%randing !ill help you to present a professional image and get your company
name out there in public vie!. .ver time the high standards that your brand
represents !ill allo! you to gro! a reputation that !ill allo! you to more easily
!in ne! locations.
Loo0 for Locations that *lread& 5a(e %achines
-any vendors ma"e the mista"e of loo"ing for locations that don@t currently have
vending machines on site. #he problem here is that these opportunities are mostly
unprofitable and have probably been passed over by other operators.
#he tip here is to go after busy sites that already have machines. -any locations
!ill be dissatisfied !ith the service that they are currently getting from their
vending operator and they may consider changing if you have something better to
offer.
*dd %achines to &our 27isting Locations
After you have ta"en the time to build relationships !ith the @decision ma"ers@ and
have proven that you offer great machines and service !hy not try to up:sell them
!ith additional options. #ry to thin" of something that compliments your e<isting
setup put your proposal for!ard and you may see your revenue from that site
50
double over night.
#here are many things that you can do to start up successfully in vending and to
ma<imiCe your profits. %y thin"ing @outside the bo<@ and by borro!ing ideas from
other industries it is possible to give yourself a real edge over your competitors.
>se some of the above tips as !ell as your o!n ideas and allo! your business to
see profit levels that you never thought possible.

51
1:) Income '..ortunities C 2arning !i7
Figures
1hen entrepreneurs first start to considering vending as a business opportunity
one of the first &uestions that they often as" is if it is possible to earn a@ si< figure@
income in this industry.
@Si< figures@ or E100000 or more in pre:ta< earnings per year is still seen as a
reasonably good benchmar" for success by many people. #hey !ant to "no! that
they !ill have a realistic chance of hitting this income level !ithin a fe! years
before they put their time and capital into a ne! business venture.
9et@s loo" at some of the factors that typically separate the operators !ith @si<
figure@ incomes from the rest.
,art Time or Full Time-
(t is common to start off doing vending part time !hile also "eeping a regular Bob.
Some vending business operators ma"e a nice income to supplement their day Bob
salary. $o!ever to reach the E100000 profit level you !ill probably need to
eventually go full time.
<nderstand Vending %achines
Successful operators understand vending e&uipment and closely follo! industry
developments. >nderstanding in these areas allo!s the business operator to
ac&uire good &uality machines for the best prices and to organiCe their
maintenance effectively.
"randing
#he !inners in this business understand that branding is important. (f you
establish a name and a reputation for yourself over several years then you !ill find
that ne! accounts !ill come to you instead of you having to go out and get them
all the time.
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'rgani#ation
#he high income earners in the vending industry are organiCed and manage their
time !ell. Computer systems and soft!are can be used as a !ay of collecting data
that can help a vending business o!ner ma"e crucial decisions that can affect
profitability. 1hile some see vending as a !ay of earning easy passive income the
most successful players realiCe that this comes many years do!n the road and that
there is a lot of !or" to do before you get to that point.
%aster the *rt of !ales
7etting ne! locations comes do!n to having an attractive offer and solid sales
s"ills. #o be successful you need to fine tune the art of scoping prospective
locations getting appointments !ith decision ma"ers and selling them on !hat
your machines can do for them and their business. 7ood vendors find !ays of
ma"ing their machines more mar"etable such as !or"ing in cooperation !ith
charities.
5iring 2m.lo&ees
1hile you can start off doing everything yourself you !ill soon find that to scale
your business up to the@ si< figure@ income level you !ill need to hire reliable staff
to do the foot!or" for you !hile you concentrate on gro!ing your business.
Customer Relations
Al!ays maintain the highest standard of customer service. Service machines
regularly and "eep them clean and presentable. Never give @decision ma"ers@ at
your locations any e<cuse to as" you to ta"e your machines off their premises. (f
you maintain good relations !ith managers at each location you may even be able
to sign them up for additional machines. #his can be an easy !ay to increase
revenue !ithout having to find ne! clients. 2ou !ill also get referrals from your
clients if you "eep them happy.
Commissions
-ost of the vendors that see a decent level of income learn ho! to deal !ith the
53
issue of commissions. Selling your machines on the advantages that they offer to
the staff management and patrons of an establishment is better than selling them
on a percentage of the ta"ings. Successful vending business operators do ho!ever
realiCe that some locations are so good that a commission can be Bustified if it is
re&uired to !in the account.
*ttention to Detail
,ending is a numbers game and the top entrepreneurs in this industry realiCe the
variables that must be focused on to improve income levels. #o get to a decent
level of earnings you must ma<imiCe your locations ma<imiCe the &uality of your
locations reduce the fre&uency of machine brea"do!ns reduce commission paid
to location mangers and ma<imiCe the efficiency of your employees.
7etting the right product mi< or category management is also crucial so that your
stoc" sells !ell and so that you don@t run out of some items &uic"ly !hile others
are slo!er to sell. (n this !ay you can increase sales and reduce the fre&uency of
visits to re:stoc" machines.
The Right *ttitude
Determination and a !illingness to learn are important attributes for an operator
to possess. A vending business can be tough in the first year and you have to get
used to constant reBection as you try to place machines. #he "ey to success is to
learn from failure and reBection and to see them as opportunities to learn ho! to
improve and refine your systems until you find ones that !or". Geep trying trying
and trying again and success is inevitable.
Could you earn a @si< figure@ vending business income5 1ith the lo! barriers to
entry and lo! start up costs that this industry offers it is definitely an opportunity
!orthy of consideration.

54
1;) * "u&ers +uide to 2@ui.ment
#here are many different "inds of vending e&uipment. As a business operator in
this industry you should be familiar !ith a variety of machinery so that you have
something appropriate for any location.
9et@s ta"e a loo" at some of the various machine types and their "ey features. 1e
!ill also set out some strategies for ac&uiring ne! or used vending e&uipment.
T&.es of Vending 2@ui.ment
Some vending machines such as the "ind that sell gum balls or condoms are small
enough to hang on a !all. .thers are set up to sell hot and cold beverages as !ell
as a variety of snac" products and can ta"e up a considerable amount of floor
space. ,ending e&uipment comes in a variety of siCes and shapes and there is
something suitable for Bust about any location.
Some of the smaller machines don@t re&uire a po!er supply and can therefore be
much more fle<ible in terms of !here they are used. -ost of the larger machines
do re&uire a nearby po!er soc"et though for heating cooling or other machine
functions.
9oo" for machines that are a little different add value to a location or offer
customers more than Bust convenience. Some of the ne! vending machines are
more interactive such as the ones !here "ids can !atch a bouncy ball roll do!n
after they have purchased it. .ther machines are returning to the @classic loo"@
that vending machines had in the 1080@s to cash in on baby boomer nostalgia.
,ricing and ,a&ments
-achines perform better if they are able to offer customers a variety of products
and a variety of payment options. .bviously customers should be given a choice
of payment options if possible. -any machines no! allo! a customer !ithout
change in their poc"et to be able to pay !ith bills or even a credit card.
(t is e<tremely convenient for a business o!ner to be able to change the pricing of
55
the machine@s products easily !ithout re&uiring maBor upgrades and many of the
modern machines ma"e these price changes easy to implement. (f the cost of your
supplies goes up then you are able to &uic"ly respond by passing these price
increases onto your customers.
"u&ing !econd 5and 2@ui.ment
(f you are ne! to the business then buying ne! machines may not be the best
move for you. (nstead you should loo" at leasing options or buying second hand
e&uipment. ,ending machine prices can vary !ildly and some dealers !ill try to
sell used machines for the same price as ne! ones so it pays to shop around.
,arts and %aintenance
%efore you buy used machinery you should ma"e sure that you have a solution in
the !ay of parts and e<pertise for fi<ing that particular brand of machine !hen
repairs are necessary. #he best thing to do is to loo" for the production or model
number and contact the manufacturer to find out if they can still supply parts for
that model. $ave a technician inspect e&uipment before you ma"e a purchase and
get a professional opinion instead of ta"ing unnecessary ris"s.
2ou can rely on technicians to fi< your machines for you but this gets e<pensive if
you have to call them out for every little thing. .bserve them in action so that you
can at least learn ho! to carry out basic repairs yourself. 6ractice doing some basic
maintenance on your machines at home. 2ou have to be sure that if you carry out
maintenance at your locations that you get it done &uic"ly and !ith as little bother
to the people nearby as possible.
Some manufacturers and distributors offer support by phone so you may be able
to carry out repairs yourself !ith a little assistance from your suppliers help des".
"u&ing Ne) %achines
#here are many advantages to buying ne! e&uipment. Ne! machines !ill come
!ith a guarantee so you !ill be covered if things go !rong during the !arranty
period.
#here are a variety of @smart@ vending machines entering the mar"et that are able
56
to transmit data to you from their remote locations. 2ou are able to find out in real
time if machines have malfunctioned if alarms have gone off and !hat their
inventory levels are. #his data can save you an incredible amount of time by
reducing the amount of visits that you have to ma"e to each machine.
-a"e sure that you choose your vending e&uipment carefully. Do some research
into some of your more successful competitors and find out !ho their suppliers
are.
$aving reliable e&uipment that re&uires little maintenance and functions as it is
supposed to for customers is one maBor part of ensuring that your business !ill
succeed.

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1=) +ood ,roducts for Vending %achines
1hen it comes to running a vending business you have to carefully consider the
"ind of machines that you !ant and e<actly !hat you !ant to sell.
(t can be !ise to stic" !ith a popular niche and vend products that have proven to
be popular and have a trac" record of success. $o!ever some entrepreneurs have
also done very !ell by testing out ne! concepts and have become pioneers in
their introduction.
9et@s ta"e a loo" at the variety of products that are sold from vending machines
both the regular and unconventional and the profit potential of some of these
products.
Food8 !nac0s and "e(erages
According to the National Automatic Vending Association in the >S ANA-A'
canned beverages ma"e up /0F of the overall vending mar"et snac"s 10F food
10F hot cup beverages =F and cold cup beverages =F. Snac"s and beverages
altogether represent =8F of the mar"et in the >S.
1hile opportunities are plentiful many e<perienced operators find that it can be
labor intensive as the products are bul"y and need to be re:stoc"ed often. 6rofit
can also be &uite lo! due to products in this area being priced lo!. ;ven if you
mar" up 100F from your purchase price it can be difficult to ma"e money unless
your machines are performing really !ell.
-ost e<perienced operators report that Bun" food and soda options are much
more popular than health bars and fruit Buice. So unless you are locating in a
school or outside of a gym then you may be better off !ith the former as it has
proven to be more profitable.
+um "alls and "ul0 Cand&
7um balls and other carefully selected candy items can offer far higher mar" ups
from the purchase price. A gum ball that may cost three cents can be mar"ed up
58
more than 400F and sold for 20 cents or more. ;ven though !e are only tal"ing
about a small amount of money here one of these machines can hold thousands
of gum balls.
#hese "inds of machines don@t have to be re:stoc"ed often and !hen they are the
o!ner can usually ta"e out over E800 of almost pure profit. Candy machines can
suit any location though they are best suited to areas !ith a lot of children
nearby.
.ne interesting candy related niche mar"et that some operators are getting into is
small machines in restaurants selling @after dinner@ mints to guests.
Cigarettes
Cigarettes have traditionally sold !ell via vending machines in the right locations
and currently represent 2F of the industry according to NA-A. $o!ever the
mar"et lately is changing !ith the gradual introduction of more anti:smo"ing
regulations and the cigarette vending business therefore doesn@t loo" li"e it !ill
have a bright future.
To&s and !tic0ers
#oys and trin"ets that "ids love such as bouncy balls and stic"ers can also have an
amaCingly high mar"up and don@t have to be replenished so often. (n a location
!ith lots of @young family@ traffic these "inds of products can do really !ell.
Ne)s.a.ers
Ne!spapers have to be re:stoc"ed daily of course as nobody !ould !ant to buy
yesterday@s ne!spaper. #his ma"es ne!spaper vending machines a bad
proposition for most vendors !ho !ould prefer to re:stoc" less fre&uently unless
the location has a huge volume of foot traffic. 9ocations that are suitable for
ne!spaper vending include busy street corners train stations and airports.
"athroom Related ,roducts
(n the right environment products such as soap sanitary pads condoms and
perfumes can be vended from small units attached to bathroom !alls.
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*rcade and Video +ames
#he entertainment mar"et is huge and many entrepreneurs choose to specialiCe in
this area alone. 1ith vended forms of entertainment there is usually no product
cost involved and machines never have to be re:stoc"ed !hich ma"es this sector
&uite lucrative for those !ho "no! !hat they are doing.
'ther ,roducts and !er(ices
.ther products and services that are sold via vending machines include CD@s
cameras pantyhose (nternet services D,D rentals and photos. #he Hapanese
!ho are usually the !orld leaders !hen it comes to vending machines even sell
cans of beer via machine.
.ne e<ample of an interesting ne! vending service concept is to perform breath
alcohol testing via a machine and locate them in or around bars or night clubs.
Ne! vending concepts are arriving all the time and big profits can be made if you
are able to Bump on a ne! idea at the right time. %ut at the same time ne!
business o!ners !ould do !ell to concentrate on the vending machine products
that ma"e up the bul" of the mar"et share such as snac"s candy and beverages as
these are proven !inners and are more li"ely to succeed in any given location.
%asically any product or service should eventually be able to be offered via a
machine for a favorable cost and at the greatest convenience. #he vending
machine industry definitely has a bright future.

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$>) Vending "usiness Contracts
As a vending business operator you may need a contract that can be signed
bet!een yourself as the vending operator and the client or person responsible for
the location !here you !ant to place your machine.
Not all vendors use contracts. (n some cases they may not be !orth the time and a
casual agreement !ill be sufficient. *or important locations and e<pensive
machinery though a proper contract can offer protection and piece of mind to
both parties. A contract should let both parties "no! clearly !here they stand and
help them to avoid unnecessary conflicts.
#he best !ay to put together a contract for your business is to firstly ta"e a loo" at
some e<amples that are in use by other vending companies. 2ou can then get
ideas for suitable clauses for your o!n contract and consider some others that are
relevant to your o!n uni&ue situation. 9astly you should have a la!yer !rite up
the final contract to ensure that the !ording is correct and that it provides you
!ith the protection that you are see"ing.
Remember that there are t!o sides that have to agree and sign to ma"e a contract
valid. (f you stac" all the clauses in your favor then you may find that you lose a
client to your competitors. %e sure to include some clauses that reassure the client
that your service is first class and reliable. Set a reasonably high standard for your
company through the contract and set out to consistently live up to that standard.
#he follo!ing list sets out some typical clauses that vending business contracts
could include. Note that this is not an e<tensive list and that every case !ill be
different.
The ,arties In(ol(ed
A contract should start off by clearly identifying the parties involved. A vending
business agreement !ill be bet!een the @location@ and the @vendor@ and it should
clearly state !ho these t!o parties are in detail.
Legal Re@uirements
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(t is reassuring to the client to include a clause stating that the vendor operates
their business in full compliance !ith all state and city regulations relating to
vending and the handling of food.
27clusi(it&
Do you have the e<clusive right to have your machines at the specified location or
is the client able to bring in competitors as !ell5
Commission ,a&ments
#he agreement should set out details of the financial arrangement bet!een
vendor and client. (f the client is to be compensated for having a machine on their
premises then the commission details should be made clear.
Vending %achines
Clauses can be set out that limit the type &uality and &uantity of vending
e&uipment that is able to be located at the site and ho! often it is to be cleaned
or re:stoc"ed.
Vended ,roducts
#he parties may !ish to list out or define precisely !hat products are able to be
vended from machines at the specified location. #his !ill differ on a case by case
basis. A school for e<ample may !ant the vendor to agree to vend only foods that
conform to certain health guidelines. #he contract may also set out price
limitations or minimum portion siCes.
Insurance and Damages
#he contract should mention any liability insurance policy that the vendor has
relating to their machinery. (t should also note !ho is responsible for the security
of the machines and for any damages should they occur.
2lectricit& and /ater
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(f the machine !ill be using on:site utilities then the contract should set out !ho is
responsible for paying for these.
,lacement and *ccess
#he agreement should specify the precise location of the vending machines on the
clients premises and it should also ensure that customer access to the machine is
not bloc"ed in any !ay. #he contract should also set out the rights that the vendor
or the vendor@s staff have to access the premises to service the machines.
Duration8 Termination and Rene)al
#he contract !ill be valid for a fi<ed term that should be clearly specified. >pon
e<piration of the contract both parties can then have the option to renegotiate it
or e<tend it if they are still in agreement.
#he contract should clearly state the terms under !hich either party is able to
cancel. A reasonable amount of notice should be given in !riting so that the
operator has time to remove the machine or the location manager has time to
find another company to organiCe a replacement. Representatives of the location
may also insist that the space occupied by the machine is left in the same
condition as it !as prior to the installation of the machine.
.perators should al!ays give themselves an e<it option in the event that a
location turns out to be unprofitable or une<pected problems occur.

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$1) Customer !er(ice
(n the vending business customer service is one of the "eys to your survival and
prosperity.
1hen you thin" of your customers you should thin" of t!o distinct groups of
people. *irstly you must consider your client the manager @decision ma"er@ or
property o!ner !ho has given you permission to have your vending machines on
their premises. Secondly you have to consider your end users or customers the
people !ho are actually using your machines on a regular basis.
The Im.ortance of Customer !er(ice
7ood customer service ma"es sense for most business models and vending is
definitely no e<ception. Customer service is not Bust about @doing the right thing@
and respecting those that ma"e your livelihood possible. (t also ma"es good sense
financially.
#he cost of customer ac&uisition is e<pensive these days. Ne! vending locations
ta"e time and money to get and they often come !ith a limited number of regular
customers. 1hen you consider that the cost of "eeping your e<isting customers
happy is much cheaper than ac&uiring ne! ones it becomes clear that you must
treat them !ell.
6eople !ill tal" about your machines your products and your services. Satisfied
customers may refer business to you but unsatisfied customers !ill definitely
spread the !ord li"e !ildfire. %uild a strong reputation through strong customer
service.
7ood customer service is about being approachable and living up to the promises
that you ma"e to people. ;<ceptional customer service also involves sometimes
going the @e<tra mile@ or @over delivering@ by doing something that the customer
didn@t e<pect. #hat@s ho! you really impress people and get them tal"ing about
you.
%anagers or ADecision %a0ersA
64
#ry to service your machines in a !ay that you don@t interfere !ith the !ay that a
client runs their business. Some vendors try to snea" in and out li"e they are
invisible and try not to get in the !ay. #his is a good approach but if you do get the
chance then a smile or a &uic" chat can go along !ay to!ards maintaining your
relationship !ith the @decision ma"er@.
Don@t hesitate to give some free products to the @decision ma"er@ and other
important people at your locations. (f your machines have bill acceptors then you
may be able to have coupons made up that can be inserted for free products. (f a
location is profitable then handing out some free products or vouchers !ill hardly
ma"e any difference to your bottom line.
-a"e sure that you clean your vending machines as often as is necessary so that
they don@t become a dusty eyesore. Repair your machines promptly if they brea"
do!n and al!ays "eep your visits to re:supply a machine as short as possible.
Never give the @decision ma"er@ an e<cuse to !ant to get rid of your vending
machine.
Customers or 2nd <sers
No matter ho! !ell you get on !ith a client or @decision ma"er@ it is your
customers or end users that provide you !ith your bread and butter. Set out to get
customers on your side right from the start.
(ntroduce yourself to staff !hen you place a ne! machine. An office employee or
gym member can represent an enormous volume of sales over a period of several
months so you should value your regulars. 9et people "no! that they are !elcome
to call you if they face difficulties !ith the machine. 7ive them an email address
and say that you !ould love to hear from them if they have any specific product
re&uests. 6assing around a flyer or putting a notice on your machines are good
!ays to communicate !ith your customers.
9et people "no! your refund policy if they encounter problems !ith your machine
and ho! they can contact you. %eing able to give people coupons instead of a
refund is the best option as you can mail them out easier than cash and you "no!
that the money !ill be going bac" into your business.
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7et people into the habit of using your machines right a!ay. 1hile introducing
yourself to people at a ne! location you can pass around a fe! coins and invite
people to try out your machine.
#ry not to let your machines run out of more than one or t!o product lines. (f
customers don@t get !hat they !ant the first time they may give up on your
machine and go else!here. #ry to re:stoc" your machines !ith product before
they fall belo! 80F of their full capacity as an empty machine can loo"
unappealing.
-a"e sure that your machine is !ell presented and stoc"ed !ith &uality products
that are not beyond their e<piry dates.
1hen you do visit to service your machines ma"e sure that you are al!ays polite
and friendly to people as there is a good chance that they are your customers. (f
you see someone using one of your vending machines you might consider
than"ing them for their business.
#o be successful in this business you need a customer service plan. *or the most
part you !ill find that it fairly easy to deliver a high standard of service. (t !on@t
cost you a lot and you !ill end up !inning the loyalty of your customers instead of
ris"ing losing them.

66
$$) <nderstanding %ar0eting
*inding great vending locations is one thing but to have any hope of being a
success in this business you have to become good at convincing location managers
to let you place your machines on their premises. 1hat you need is a mar"eting
strategy to help you to get in touch !ith prospective clients and successfully sell
your service to them.
/ho )ill do &our %ar0eting-
(deally you should approach clients yourself so that you can learn as you go and
"eep costs to a minimum. $iring someone to handle your mar"eting for you is also
an option. 2ou could even consider using the services of a professional @locator@
and many businesses have sprung up that offer this service to vendors.
/hat are &ou !elling-
#he first step is to define e<actly !hat you are trying to sell. #his is not as easy as it
sounds as the needs and opportunities at every location !ill be different. -ost
business models in other industries re&uire you to choose a product or service and
then go out and find a mar"et for it. (n vending you !ould be foolish to buy
machines and then go on the loo"out for suitable locations. (nstead you should be
a!are of a variety of vending machines and then consider the needs and
opportunities of each location on a case by case basis. 1in the account first and
then ac&uire the machines to service the location.
/ho are &ou !elling to-
#hin" about !ho your clients are and ho! you can design a mar"eting campaign
that !ill appeal to them specifically. 2ou may have to adBust your strategies if you
target a variety of different businesses and organiCations.
(f you are approaching schools for instance you should let them "no! that you can
stoc" your machines !ith healthy snac"s if they re&uire. #a"e along some samples
for them to try and let them "no! that you strongly agree !ith their decision to
limit their student@s inta"e of Bun" food.
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%a0e 4our Vending "usiness %ore %ar0etable
#ry to be different !ith your machines your service and ho! you approach your
business. -anagers at most of the top locations !ill have already been
approached by your competitors and if they !ant machines then they !ill have
them by no!.
#ry to offer something different or thin" of a concept that !ill really appeal to the
location in &uestion and add value for their customers. 7et inside a business
o!ner@s head and thin" about !hat they need to improve about their business.
Really listen to each client and offer them a customiCed solution that is tailor
made to suit their needs.
.ne good !ay to strengthen your mar"eting is to form an association !ith a
charity and carry an official letter from them to your meetings. 9et prospects "no!
that for every month your vending machine is located on their premises you !ill
donate a certain amount of money to your charity partner. #his usually ends up
cheaper than giving them a commission and you can feel good about doing some
good in the community.
(f the @decision ma"er@ seems determined to get a commission then you should
come out !ith a set percentage of the machines ta"ings. %e prepared to go a little
higher if they !ant to negotiate. 9et them "no! that you !ill pay them every time
you come to collect money from the machine. 2ou can even offer to let them
!atch you empty the machine and count the money so that they can be sure that
they are getting their share.
2ou !ill also stand a much better chance of !inning large accounts if you carry
liability insurance of at least a million dollars !hich only costs around E/0 to E=0
a month depending on certain variables. ,ending machines are pretty safe these
days but accidents have been "no!n to happen.
+et !tarted b& Net)or0ing
-any people get started locating their machines through friends family members
and associates. 2ou are bound to "no! business o!ners or people in management
positions so this is a great !ay to "ic" off your mar"eting efforts. (f you let them
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"no! that you are going into vending they may consider your services or introduce
you to other @decision ma"ers@. #he more net!or"ing you do and the more you let
people "no! about your business the more li"ely you are to get referrals. Consider
Boining your local Chamber of Commerce or other local business associations.
Contacting ADecision %a0ersA Directl&
After you have e<hausted your personal connections you !ill have to loo"
else!here for opportunities. .nce you have some locations in mind you can then
try to contact the @decision ma"ers@ there directly.
Door:to:door cold calling is the most common approach that is used in the
vending industry. 6honing businesses directly can also !or" !ell but you !ill
probably be able to ma"e the best impression if you visit locations in person.
#o be successful someone should be pounding the pavements at least one or t!o
days a !ee" representing your business and loo"ing for ne! locations.
#he first step is to drop off your business card introduce yourself identify the
@decision ma"er@ and find out if they currently have any machines in place. #he
ne<t step is to push for an appointment !ith the @decision ma"er@ to go over !hat
you have to offer them or to e<plain ho! your solution is better than the one their
current operator is providing.
*d(ertising
1hile vending is a business !here you usually have to go out and get the
customer you can also e<pect some customers to come to you if you advertise
effectively. A 2ello! 6ages advertisement and advertising on your vehicle can go
along !ay to!ard bringing in ne! leads. 2ou should also have a !ebsite set up
that is optimiCed for "ey!ords that people might enter if they are loo"ing for
vendors in your area.
Closing the Deal
.nce you have an appointment lined up you then need to loo" at ho! you plan on
!inning the account. Set out to impress !ith your machines by ta"ing along a
machine sample Aonly suitable for smaller machines' or a folder !ith photographs.
69
Also ta"e along samples of some of the products that you !ill be vending through
your machines and hand them out to management to try.
9et prospects "no! !hat@s in it for them by highlighting some of the advantages
that your machine can offer such as ho! it can offer their employees more
convenience or act as a feature that enhances the e<perience of their patrons.
>nderstand common concerns that they may have and address them one by one.
Al!ays present a professional image by being reasonably !ell dressed and carry
business cards !ith your company@s logo and contact details.
Converting a lead into a ne! client re&uires s"ills in salesmanship and you should
learn all that you can about see"ing out the @decision ma"er@ body language and
ho! to sell and close a deal. Develop a sales script and a process that you go
through !ith each meeting. #ry out different approaches to see !hat !or"s !ell
so you can refine your system over time to give every lead your best possible shot.
2our failure rate !ill be high so you must learn to deal !ith reBection. #ry to see
every reBection as a learning opportunity to improve your sales s"ills.
Success in your vending business mar"eting re&uires you to locate great spots for
your machines and then to convince the @decision ma"ers@ responsible for those
locations to allo! you to place your machines there. (f you are able to fre&uently
get ne! leads and become s"illed at !inning over decision ma"ers you !ill be !ell
on your !ay to a @si< figure@ income.

70
$1) Forms and !tandard Letters
1hen you start a business you !ill find that there is a considerable amount of
paper!or" involved. 2ou !ill need to establish some forms and standard letter
templates that can be changed to suit each situation as it arises. 9et@s ta"e a closer
loo" at some of the forms letters and other paper!or" that you !ill need in the
vending business.
"usiness Forms
,endors use a variety of business forms. (t is convenient if you have standard
business forms that you constantly improve all the time as your operation evolves.
(nstead of having to ma"e a ne! form up from scratch for every situation you can
Bust pull up a standard form on your computer and adBust it as necessary.
*irstly you !ill need a form to help you deal !ith the large numbers of prospects
that you !ill be coming into contact !ith every !ee". A basic @contact form@ !ill
allo! you to "eep a record of every prospect that you tal"ed to and the outcome
of your conversation. Also ta"e note of the @decision ma"er@ at each location their
contact details and the date that you spo"e !ith them.
(f things go !ell and you visit the site for further discussion you can then complete
a @location evaluation form@. .n this form you need to note do!n all of the "ey
information about a location that could affect machine performance such as
!or"ing hours and employee numbers. 2ou !ill need to record information on the
machines that they presently have in place as !ell as any specific re&uirements set
out by the @decision ma"er@.
.nce you have machines in place a record needs to be "ept on every machine so
that you can "eep trac" of sales volume and inventory levels. ;very vending
machine that you are operating should have a file !ith a fact sheet outlining basic
details on the machine the client and the specific location.
;very time you visit that machine you should complete a form to let you "no!
ho! much inventory !as there !hen you arrived ho! much you added and ho!
much cash !as collected from the machine.
71
2ou also need to "eep a detailed maintenance history on each machine and it is
convenient to have a form for this purpose.
.ptimiCing sales and profits at each location is all about testing and trac"ing. 2ou
need to stic" !ith core products that are selling and eliminate those that aren@t
popular. ,ariety is important and it is also important to rotate in ne! products
occasionally to see if they !or" out. 2ou should have a constantly evolving plan for
the volumes and combinations of inventory that should be displayed in the
@columns@ or @spirals@ of your machines. -any operators set out charts for each
machine that they can &uic"ly refer to !hen they are out on the road stoc"ing
machines.
(f you have machines in non:public locations you may attach a number a refund
forms to a pouch on the side of each machine. #his is an e<tra service that you can
offer to customers !ho didn@t get !hat they paid for and !ant to be reimbursed at
a letter date.
!tandard Letters
.ver time your business should develop a set of standard letters. #hese can be
used for a variety of situations that you commonly encounter in the day to day
running of your business. Standard letters are great and save you the hassle of
having to !rite an original letter for every situation.
Simply pull out a standard letter template on your computer that already has your
business branding on it and some commonly used paragraphs. #hen ma"e the
necessary changes to the te<t that every uni&ue situation !ill re&uire and you are
a!ay laughing.
Standard letters are a great !ay of managing your relationship !ith your clients
and you can have letters ready to !elcome clients than" them for their business
and to ans!er common complaints or re&uests.
.ther letters can be used to enhance your mar"eting by re&uesting a testimonials
or as"ing for referrals.
!ur(e&s
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#o sho! your customers that you care and to get some feedbac" from them you
should survey them once or t!ice a year. #ry to find out if they are satisfied !ith
your services and if they have encountered any problems. #ry to find !ays that
you can serve them better and to increase your profits.
6ut together a one page survey form that you can easily print out or photocopy
!hen you need it.
Fl&ers
Sometimes the mar"eting activities of a vendor re&uire for flyers and other
promotional materials to be printed.
1hen you place a ne! machine it doesn@t hurt to pass around a flyer to
employees introducing your company to them. ;ncourage them to use the
machines to report problems to you and to let you "no! if they have any specific
product re&uests.
2our promotional efforts may also involve printing special offers and discount
notices that you can attach to your machines to encourage customers to focus on
specific products.

73
$3) Vending "usiness "oo0s and +uides
%efore ta"ing the plunge !ith your o!n business is important that you do some
thorough research in order to find out if vending is the right business for you. 2ou
!ill also need to "no! ho! to go about starting out right and setting yourself up
for success.
%y reading some of the numerous vending boo"s and guides that are available you
!ill be able to learn a lot about the industry. Iuite a fe! successful vending
business o!ners have published boo"s designed to help beginners get started in
the business. (n these guides they share their "no!ledge and e<perience and offer
uni&ue insights into the business that may other!ise ta"e years to figure out. 2ou
!ill be able to avoid ma"ing some of the typical mista"es that beginners ma"e
!hen they go into this industry if you do some proper research beforehand.
9et@s e<amine some of the factors that you should consider !hen deciding !hich
boo"s reports and other information products you should invest in.
#here are many boo"s related to vending available online from some of the larger
boo" sellers. (t is great to order real paperbac" or hardbac" boo"s to read and
have sitting on your boo" shelf for future reference. $o!ever don@t forget that
there are also some great e:boo" guides that are able to be bought and
do!nloaded online.
1ith e:boo"s you get information instantly and can ta"e action right a!ay instead
of !aiting for boo"s to be delivered to your home. -any of the digital products
that you can buy related to the vending business also offer you much more than a
guide boo". Some are actually full start up "its and in addition to an e<pert guide
they offer you bonuses such as forms routing programs lists of prospective
locations and even offers for free coaching.
1hen shopping for information on ho! to start a vending business it is important
to consider the bac"ground of the author. .ne thing that ( have noticed is that
most of the boo"s available on this topic that you might order off Amazon.com
have been !ritten by researchers !ho haven@t actually had any first hand
e<perience in the industry themselves. #hese !riters Bust !rite generic @start a
74
business@ boo"s and thro! in some specific information related to vending that
they get from research online and intervie!ing people.
.n the other hand there are some e:boo"s and guides available for purchase
online by real vending professionals. #hese authors have had first hand success
and are !illing to share some vending tips and secrets !ith those starting out in
the business. .ften these vendors have moved on into more successful ventures
and don@t mind passing on their "no!ledge to beginners. #hese authors may not
have such good !riting and research s"ills as those that get published but the
information that they share can be more valuable and gives you a real perspective
on ho! the business !or"s.
Another advantage !ith buying e:boo"s or digital products online is that they
often give you a 100F@ no &uestions as"ed@ refund if for some reason you feel that
you didn@t receive value from the information and !ant your money bac". #his is
not al!ays the case !ith real paperbac" and hardbac" boo"s if you have already
read them.
(f you are going to be investing a considerable amount of time and funding into
your o!n vending business then spending a small amount on boo"s guides
reports and start up "its on the topic is surely !orth!hile. Do yourself a favor and
put some time into reading about this industry from a variety of vie!points. #hen
you !ill "no! that you definitely !ant to enter this business and you !ill be able
to ma"e informed decisions that !ill lead you in the right direction.

75
$3) *dditional Information
(nstead of Bust Bumping into vending and hoping for the best you should prepare
by doing as much research on the subBect as you can. 9et@s consider some of the
information sources that you may use to get a preliminary understanding of the
industry and some data for your business plan.
'ther Vending "usiness '.erators
#he best !ay to get information about the vending business !ould be to as" some
e<isting operators about the local industry and their businesses.
Due to the competitive nature of this business some business o!ners may be
unli"ely to share a lot of information and may even discourage you !ith false
information.
$o!ever some of the more established operators care a lot about improving the
often bad reputation that the vending industry has. #hey may be "een to see ne!
operators start out properly instead of having them end up adding to the myth
that vending machines and their o!ners are not to be trusted.
(f you try to get tal"ing to a business operator !hile he or she is re:stoc"ing one of
his machines you may be able to get some information out of them as part of a
polite conversation but it is unli"ely that they !ould spare a lot of time to go into
the details.
$aving a mentor could be invaluable though and you may find one by approaching
successful vendors in other cities and as"ing them for coaching.
The Internet
#here is actually very little free information available online relating to the vending
business specifically. #here are a fe! forums li"e Vendinghat.com !here vendors
are discussing the business but you have to sift through a lot of chit chat to find
much in the !ay of useful information.
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"oo0s and !tart u. Dits
Reading boo"s is a great !ay to learn and most of the popular online boo"stores
have a variety of titles specifically related to vending start ups. #here are also a
number of e<cellent guides available for purchase on the (nternet that have been
prepared by e<perienced vendors !ho have long trac" records of success. #he
great thing about these e:boo" guides and start up "its is that you can do!nload
them immediately instead of having to pic" them up from a store or !aiting for
them to be delivered. #a"e positive action and get started right a!ay?
%aga#ines
-ost industries have their o!n magaCine or Bournals and vending is no e<ception.
6ublications li"e the Vending Times and Automatic Merchandiser can help you
learn about the industry and "eep you updated once you have started.
National *ssociations
#here are a number of national associations that you could contact such as NA-A
ANational Automatic -erchandising Association' and some of them may be able to
offer assistance and advice. #here is also a number of vending trade fairs
internationally and in the >S that are !orth attending.
%achine %anufacturers and Distributors
#he machine manufacturers and distributors can be a useful source of industry
information. 2ou have to be !ary though as they !ill be trying to sell you
something and you should be a little s"eptical about !hat you hear from them.
Tal0 to ,eo.le
2ou !ill also be surprised as to ho! much insight into vending can be gained
simply by tal"ing to everyday people. ;veryone has used vending machines at
some time in their lives and some use them every day. As" them about their
e<periences !ith machines both positive and negative. As" them about the "inds
of products they buy the location of the vending machines that they use and their
reasons for using those specific machines and locations.
77
(t is al!ays a !ise move to inform yourself before ma"ing any big decisions in life.
Starting your o!n company is a big move and it !ill pay to revie! as much
information as you can before you Bump in.
( sincerely hope that you enBoyed this guide. *or further information ( recommend
chec"ing out Vendingorg and !tartaVending"i#com
Ste!e Sutherland
Hune 2012
78