The Free Vending Business Guide
Author – Steve Sutherland Copyright © 2012
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 otherwise without prior written permission from the author. All trademarks mentioned in this report are the property of their respective owners. The information contained in this guide represents the opinions of the author. The author has made all reasonable efforts to ensure that the information is correct and up to date. However, it cannot be guaranteed that this is the case and we make no representations or warranties with respect to the completeness or accuracy of the following information. By reading this guide users acknowledge that they cannot hold the author or publisher liable for any losses suffered as a consequence of their actions. This information is intended for educational purposes only and should be used at your own risk.
Table of Contents
1) Introduction – Read This First................................................................................3 2) Vending Machine Industry Overview ....................................................................4 3) Ten Reasons to Start a Vending Business...............................................................9 4) What to Consider Before You Start......................................................................12 6) How to Name Your Business................................................................................17 7) Funding Options...................................................................................................19 9) Buy a Vending Route or Start your Own?............................................................24 10) Sample Business Plan Template.........................................................................27 11) Some Warnings about Scams............................................................................32 12) Growing Your Business With Charities...............................................................35 14) Suitable Machine Locations...............................................................................40 15) What to Consider when Locating Machines......................................................43 16) Tips for Beginners..............................................................................................46 17) Income Opportunities - Earning Six Figures.......................................................50 18) A Buyers Guide to Equipment............................................................................53 19) Good Products for Vending Machines...............................................................56 20) Vending Business Contracts...............................................................................59 21) Customer Service...............................................................................................62 22) Understanding Marketing..................................................................................65 23) Forms and Standard Letters...............................................................................69 24) Vending Business Books and Guides..................................................................72 24) Additional Information......................................................................................74
1) Introduction – Read This First
Welcome! My name is Steve Sutherland. I did some research into the vending machine industry between 2009 and 2011. I still haven't opened a vending machine business as I ended up going into other areas of business. However, I still think that vending represents an excellent opportunity and I may get in at some point in the near future. While I was researching vending business models I took a lot of notes and chatted with a few vending machine business owners. The following guide contains the information that I uncovered. Some of the content in this guide is fairly generic business advice and other parts contain information that is specific to vending business owners. There is a table of contents so you can go straight to any particular topic that interests you. If you are looking for more information check out Vending.org (the US industry association) as well as StartaVendingBiz.com (this guy also has some awesome information that is quite different from what you will read below). It can be hard to find good quality information on how to get started as business owners in this industry are usually fairly secretive. Business owners will never let on how good they have it or share information as they fear that newcomers will steal locations or ideas from them. If you have a desire to start a vending business they I strongly encourage you to pursue your dream. Read on and find out how you can join this elite group of entrepreneurs who have achieved the lifestyles and incomes of their dreams through the placing and servicing of vending machines.
2) Vending Machine Industry Overview
By 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 with realistic profit potential. Smart businessmen and women realize that quarters and dimes can quickly add up to a lot of money when you own dozens of machines in good locations. A Growth Industry The vending industry in the US has grown at a phenomenal rate over the past few decades and that growth rate looks set to continue well into the future. This growth is driven by an expanding population, an expanding variety of new vending concepts and the increased need for convenience. An increasing variety of payment options also now means that consumers never have to pass up on a machines offerings due to not having any coins in their pockets. Recession Proof? Most sectors within the industry are seen as being insulated from economic downturns due to the fact that they are price competitive with retailers. Vended products such as coffee often represent a much cheaper option compared to retailers. Competition The industry is certainly competitive like any business is, but competition is not always a bad thing. In some cases vending machines placed in the same location mutually support each other by forming blocks that offer better variety, value and convenience than nearby stores. A Seasonal Business?
The industry is not seasonal overall. Certain machines doing hot or cold beverages for example certainly will fluctuate in sales volume throughout the year. Some locations can be better in summer or winter. Don't forget that some locations may completely close down for short vacation periods leaving you with no sales at all. Regulations and Compliance Some states require vendors to have a business license (usually around $100), sellers permit, a sales tax license, or all of these things. Before you start a vending business you should inquire and find out how to comply with local regulations. Depending on what products you are vending you may also have to comply with your local health authorities. Most vending business owners go for sole proprietorship but a limited liability company also has advantages to offer. It is best to speak to an attorney or an accountant and try to determine the best legal operating structure for your situation. Start up Costs Start up costs in this industry are reasonable. It is possible to start a vending machine business for less than a few thousand dollars. However, if you have more funding available then obviously you can start off in a better position and grow much faster. The Nature of Vending Work The work of a vending machine business operator can be divided into two basic areas. Firstly there is the maintenance and re-supply of the machines that the owner has in various locations. Secondly operators have to continually find new locations to place even more machines. As a vending machine business owner you can choose to work by yourself, with a partner or hire teams to work for you. Most highly successful business owners in this area take on a sales role, continually trying to get more of their machines out there, while they hire teams to re-stock machines and maintain them when required. If you wish to hire staff to collect cash and re-stock machines then you
need to develop systems to account for inventory and cash so that your staff don't take advantage and steal from you. Machines and Repairs The great thing about vending machines is that they are essentially your best employees. You can have a great deal of success even as a sole operator while leveraging on the productivity of your machines. Vending machines never need vacations and only require electricity to function in some cases (instead of a wage) and are thus the ideal workers. Vending machines do have to be repaired from time to time and if you are not technically inclined then you will need to hire someone to do this. Having machines that are not functioning correctly for a period of time can result in your business losing sales volume and locations. Customer Service It is essential to treat your clients well. This will not only ensure that you are able to maintain their account but may also lead to new business through referrals. Customers hate it when they put money in a slot and nothing happens. If the manager responsible for the place where your machine is located gets too many customer complaints then they may decide that having vending machines on-site is just not worth the hassle. The Importance of Good Locations Locations for machines often don't come free. Sometimes operators find that employers want to have machines on site as a convenience for staff and allow you to be on-site for no charge. More realistically though, companies and other locations may charge you a small fee for electricity or make you pay a set amount into a 'social club' or charity fund. Some business managers will insist on a share of your machines profits and may demand anywhere from 5% to 40% commission for giving you the privilege of taking up a small part of their valuable floor space. How much you can pay for the right will depend on how much exposure and therefore how many sales your
machine is going to get. Working with a vending machine charity can help you to secure new accounts. Charities are often happy to have vendors represent them in exchange for a donation which can be set as a percentage of machine takings or a flat rate per machine. A good location will see the owner visiting frequently to re-stock the machine. A worthwhile spot should allow the owner to collect at least $70 in cash each time they visit otherwise it is not worth the owners time. The most profitable machines for a vending business owner will be the ones that are in busy locations that they are well suited to. They will have large capacities, not require a lot of servicing and have products with the best mark up. They will also offer a range of payment options and offer a good variety of products in a minimal space. A Cash Business Vending is a cash business and aside from the hassle of having to bank large volumes of coinage, business owners 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 look at solutions for their security. Franchise or Independent? New entrants to the industry will have to decide if they want to start a vending business from scratch, start out with a franchise or buy an existing route. Due to the number of scams in the vending industry over the past few years it is advisable to put in the hard work yourself and go it alone. There are many sharks out there offering unrealistic promises to naive newcomers and ripping them off so you must avoid these people. Industry Challenges Challenges facing the industry include the continual downsizing of businesses.
There is a trend for factories and offices to hire fewer and fewer people and more people are starting to work from home. This can make great locations harder for operators to find. Vending also generally has a bad reputation. Many people have had bad experiences over the years with vending machines. The general feeling among large parts of the population is that vending machines are often unreliable. People feel like if something goes wrong it is almost impossible to contact operators and that they have little chance of getting their money back. Many established vendors are starting to address these issues but there is still much that can be done to improve the industries reputation among consumers. A Bright Future The vending industry in the US and internationally should continue to expand rapidly over the coming years. For smart entrepreneurs who are prepared to put in some initial effort, starting a vending machine business represents an opportunity that is limited only by the owner's drive and imagination. Some want to run a small route and only work three of four days a month while others want to build an empire. Either way, vending is one of the more attractive business opportunities around for Americans today.
3) Ten Reasons to Start a Vending Business
A vending machine business, when set up and managed well can be an extremely profitable venture for an entrepreneur. There are many reasons to start a vending machine business and in this section I examine why the industry is so attractive. Passive Income Many people perceive a vending machine business to be one that runs on autopilot and assume that they will be able to sit back, relax and have a bunch of machines make money for them. It doesn't always work out like this though. Most business owners in this industry find out that it does take a fair bit of work before you can put you feet up and enjoy an income that is semi-passive. No Income Ceiling Many people are drawn into the business by the earnings potential. As with any small business the owner can decide how much effort they want to put into the business and thus how much profit they will make. Rather than having your earning capacity capped with a salary structure in the workplace that is hard to break out of, the sky is the limit in terms of income when it comes to running your own enterprise. Choose your Schedule Vending business owners can, to some extent, decide their own working schedule. You will have some limitations as to when you can access areas where your machines are located. However, once you are set up you can basically work the hours or days that you want. Freedom from the Boss
It is refreshing to not be directly under the control of an employer and to be able to control your own destiny. You will always be answerable to someone in business though if you want to be successful. In the vending business you won't be answerable to customers as much as you would be in other industries. However you will have to work hard to keep people happy if they are giving you the right to locate your machines on their property. Avoid the Daily Grind You can escape the grind of a nine-to-five job and the commute that goes along with it by having the freedom to schedule trips during off-peak hours. You can also target machine locations that are within a reasonable drive time from your home base. Minimal Start up Costs Start up costs can be kept to a minimum and you can even get started in business with a few basic second hand machines for less than a thousand dollars. As you won't have the overheads that other businesses face you will find that there is much less downside risk in vending. While high profits are not guaranteed, it is unlikely that your business would become insolvent as monthly costs are relatively minimal if you run your business from home. A Cash Business Vending is a cash business and this gives operators an opportunity to very easily avoid taxes or pay a lot less than what they are supposed to. While not all vendors are dishonest with their taxes this is undoubtedly one of the reasons why vending is attractive to some. Low Barriers to Entry Aside from machine repairs the work involved with a vending business is relatively simple and anyone can master it within a short space of time. That fact that no qualifications or specific training are needed to run this kind of business is one reason that attracts many people.
Choose your Coworkers Avoid the stress of working with a group of people that you may not get along with. As a vending business operator you may be happy working alone or you may wish to select a partner or team to help you. There are so many different reasons to start a vending business and every entrepreneurs reasons will differ. As an industry it can offer so much to those who are prepared to work hard, learn the ropes and grow their businesses over the long term.
4) What to Consider Before You Start
To most people, vending represents an easy opportunity to make money without a lot of effort. This assumption is far from the truth though as most vending business owners will tell you. Some people are more suited to this industry than others and in the following article I look at some of the things that you should consider before deciding that a vending business is the right opportunity for you. Are you Fit and Healthy? A vending business will require you to lift heavy objects when you install or remove machines and when you are re-stocking machines in areas that are not easily accessible by vehicle. Some of the lifting required may be too much for one and you may need to hire someone else from time to time to assist. Focus on doing tasks ergonomically (don't bend your back when you lift heavy objects) and look into tools or equipment that can help you to be more productive. Are you Organized? It takes good organization and time management skills to succeed in the vending business, as it does with most other business models. You need discipline to get out there and find new locations and once you have them you need to frequently restock them. You need to be able to keep good records so that you are able to analyze the performance of your products and locations. Money Management Vending is a cash business and operators receive cash up front without having to bill clients. Money management is important here and you must be disciplined in terms of what you do with cash when you receive it. It is important to record cash as it comes in and to stay aware of business expenses as they become due.
You will also be handling large amounts of cash every day and you must make sure that you maintain a high level of security to avoid becoming a target for criminals. People Skills Gaining new locations or accounts and keeping them is a major part of the business. If you have, or are able to quickly develop good sales skills then you will be off to an excellent start. You will also have to relate well with people that you hire to work for you and with managers and staff at your locations when it comes to servicing machines. Determination Success with locating machines is all about determination and will power as you will receive many rejections. It's all about staying positive while you get the experience that you need to refine your approach. Many people give up too soon and never manage to place more then a few machines. Self Motivation To be really successful in vending you have to get interested and start to love putting in the hard work that is required to become successful. Successful vendors are always interested in new machine developments, constantly brainstorm new ideas and always keep an eye out for good locations. The people who do well in this industry are also the ones who enjoy tracking, testing and analyzing things in detail. By doing so, they end up with great locations, find the most suited machines for them and maximize profits by testing and rotating products. Variety of Work It takes hard work to be able to sit at home and run a business on autopilot. As a vendor you will have to spend time finding new locations, dealing with 'decision makers', visiting suppliers to buy stock in bulk, re-stocking machines and coordinating maintenance and repairs. The work involved is varied and you have to like being out on the road for most of the day when you are starting out. There is more to vending than meets the eye and new entrants often find that it is not what they want to do after they have a garage full of machines. Before you
invest in your first machine you should carefully research the business and ask yourself if getting started in this field is the right move for you.
5) Start up Costs
One of the great things about starting a vending business is that it is possible to do it with minimal start up costs. If you do have access to considerable funding though you could also choose to purchase existing routes or jump straight into your own more professional set up. Depending on how you want to kick off your venture into vending, getting started could set you back anywhere between a few thousand dollars and several hundred thousand dollars. A vending machine business can be started on a really low budget so it is best to start off slowly and take on less risk. You can then invest more heavily once you start earning some profit and decide that vending is definitely a business that you want to be in. When it comes to determining the amount of capital that is required you need to take more into account than just the costs that you will face up to the point where you start doing business. You also need to consider the operating expenses that you will have over the first six months while your profits are still low. If you start out full time then you may also need to set aside funds to cover your living costs for a period of six to twelve months until your business becomes profitable. Let's take a closer look at some of the start up costs that entrepreneurs in this industry typically face. Vending Machines The amount of start up funding needed will vary greatly depending on the kind of machines that you want to start off with. One trick to starting off on a shoestring budget is to start with candy vending machines which can usually be bought very cheaply on online auction sites for around US$150 or less per unit. These machines are cheap, simple to operate and candy and gum balls offer a great profit margin for little effort. Buy them in lots of one, two or three at a time and slowly grow your business as you find suitable locations.
If you do want to start out with larger, electronic vending equipment that vends snacks and hot or cold beverages then you are looking at much larger start up costs. New machines for vending food or beverages range in price from around $2000 up to $6000 per unit. As an inexperienced operator you would be crazy to buy new machinery and would be much better off leasing some machines for a period while you test out a variety of locations. Buying quality second hand machines is also one way to lower your initial outlay. Other start up costs associated with vending machines include, security locks, tools for a maintenance kit and extension cords. Don't forget to allow for machine parts and repairs if you are reliant on hiring a technician when the need arises. Rent for Business Premises Most operators start a home-based business and therefore don't have the overhead costs associated with leasing commercial premises. If you have a spare room for an office and some space in the garage for storing machines you should be fine. Otherwise you can look at renting storage space. Office and Administration Depending on what equipment you already have and the scope of your plans you will have to spend a certain amount on kitting out your home office. You will likely require a desk, filing cabinets, a PC, printer, Internet connection, phone connection, stationery and possibly other office equipment as well. Vehicle Expenses To service your route effectively you will need a suitable vehicle. Depending on the kind of machines that you operate you may not be able to get away with using your own car and you may have to consider leasing a vehicle. You may require a larger van or light truck for transporting machines and stock and you might even require a vehicle with a refrigeration compartment. Professional Fees, Licenses and Permits
You will be applying for licenses and permits in order to set up a legal operation that is in compliance with local regulations. You may also require the services of an accountant, an attorney or other professionals during the process of setting up your vending business. Stock Don't forget that most of the time the machines that you are likely to purchase are empty and you will therefore need to buy stock for them. This can represent a considerable start up cost at first as you will certainly be looking to buy your inventory in bulk in order to save money. Marketing and Branding In order to get started making money with vending machines you will need to secure your first few locations. The initial marketing of your business may require some spending on advertising. At a minimum you will want to get a logo designed and have a set of business cards made up. Your initial marketing efforts will most likely involve making phone calls and pounding the pavement and the major cost here will only be your time. Other Start up Costs and Operating Expenses You will also have to figure in other start up costs and operating expenses such as market research, insurance coverage, cell phone costs and possibly commissions. Don't forget to make an allowance for unforeseen expenses and price changes. Your forecasts may be inaccurate and prices often rise over time or end up being higher than you first anticipated.
6) How to Name Your Business
When it comes to starting a vending business you will have to come up with a suitable name to represent your company in the market. In the vending business it is important to build a brand just like it is in any other industry and a great business name is the cornerstone of any brand. Over time the reputation that you build up in your name will be able to help you to win more locations and to do more sales volume if the name is recognized and trusted by clients and end customers. Many entrepreneurs leave the naming of their business to the last minute and don't give it the attention that it deserves. Firstly, it is important to think ahead about what your vending business may grow into one day. Naming your business after yourself as the owner could make the name no longer relevant if you end up selling your business in the future. Including the city, town or geographic area that you serve as a part of your name can also end up as a liability if you wish to expand beyond your original region. Some vendors incorporate the name of a charity that they represent into their business name and while this can help immensely with branding and marketing it can backfire if you have a falling out with the charity for some reason and are no longer able to work with 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. Try to come up with a name that is flexible and will allow you to move in any direction that you want in the future. Another approach to naming is to try and convey a message. By using specific wording 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. Look at the names of all your local competitors in the vending section of The
Yellow Pages and online and make sure that your selection is not too similar to those of other established market players. Think of something that is truly unique and you will have a better chance of standing out and being remembered. Your chosen name should be available to be registered and not already taken by any other company. You should also check out some suitable domain names for any future website that you may want to have and register one as soon as you have made a decision. Make sure that your name is simple to pronounce and that it can be clearly understood over the phone. Run a few of your short-listed names past your friends and family to see what they think. Test them a few days later to see which ones they can remember and which ones they were able to pronounce correctly. A lot of value or goodwill will be built up in your name over the years so it is important that it can continue to serve you well 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.
7) Funding Options
Due to the generally low start up costs involved with vending compared to other industries it is not a sensible idea to go too far into debt right away. You may need access to credit at a later date to see you through tough times or to expand so it is best to use savings to cover start up costs if possible. However, if your starting capital is insufficient you could consider one of the funding options below. Family and Friends If you do need funding then a loan from friends or family would be the best way to go. If they have a lot of trust in you and you are sincere with them this arrangement can work well. If things go bad though you can risk losing a lot more than your business. Investors Alternatively you could look at taking on an investor and giving them an ownership stake in your business. Potential investors would probably want to see a detailed business plan. They may also want to have an active role in the management of the business in return for their investment. For the small amount of funding required you are usually better off having 100% ownership of your business and having full control. Distributors Vending machine distributors will often offer you financing plans to help you to purchase their machines. It is likely though that you will be required to come up with the money for a sizable down payment. If 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 looks strong and that you have some collateral to offer. You will also find that some of the distributors that you are able to purchase
inventory to stock your vending machines with, can sell to you on credit. Depending on the deal that you work out with them you can usually arrange to pay your invoices within 30 days (Net 30). This is usually only possible if you have a good credit history and are able to show references. Bank Loans Seeking a bank loan is another funding option open to some. To have the best chance of being approved you should apply at a bank where you have a good account history, have a detailed business plan to show them and show a willingness to be able to fund at least part of the start up costs out of your own pocket. You will also likely need a guarantor or an asset that can be used as collateral. Government Loans and Grants In the US there are government agencies that offer small business loans with more favorable terms than banks. The Small Business Administration can also help to secure a loan for your business. There are also business grants if you are lucky enough to qualify and these often don't have to be repaid at all. Of course these government loans and grants are not easy to get due to high numbers of applicants. However, if you are able to show a solid plan for your vending business and you can prove that you will be doing some good in the community then you will stand a better chance of qualifying for this funding. Credit Cards Lastly, for those who 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 This method is risky though and due to the high interest rates involved you should only do it if you are reasonably sure that you can start paying sizable amounts off the debt within a few months. Whatever methods you turn to for funding the start up costs of your new vending business make sure that you value every dollar and ensure that it is spent wisely.
8) Market Research
Market research is all about getting a better understanding of the market that you are planning on entering. A market is made up of both customers as well as vending operators. You need to understand the current state of affairs in order to allow yourself to position your new business for success. Your market research will help you to identify some of the risks and opportunities in the market. It will help you to identify good locations and the kind of machines and products that would do well in them. Hiring a market research company to put together a report on the local vending industry would be great. This option is cost prohibitive though so it is more likely that you will end up doing your own investigations. When it comes to starting a business, market research should be the first thing that you do. Here are some ideas on the kind of information that you should collect and how to go about it. Demographics Before 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. This will help you to know where to place your machines and what products to offer. If, for example you are in a fairly young area with lots families then you might look at a product line that targets children. If the population is older then it might be worth trying to place machines within retirement communities. Surveys If you are trying out a new vending niche it will be important to gather some data from prospective customers. This will help you to confirm whether or not your business ideas are viable and if there is enough demand. Put together a brief questionnaire and ask people within your target area what they think. Would they be prepared to buy the products that you intend to sell via
vending machines? How much would they reasonably expect to pay for such items? You should get the best response from your surveys if you do them in person but you could also look at purchasing a database and doing them by phone or mail. To get a better response you could offer respondents some kind of free gift such as a voucher for a free coffee at a local cafe. This may end up costing you but the information that you end up obtaining from local prospects could be of considerable value to you. Try to talk to some business owners about whether they think your product line would sell on their premises. If 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. Scouting the Area Once you have decided on the area that you want to target and have marked out your territory on a map go out for a few drives and explore. Visit some of the places where you would expect to find vending machines. Take note of the range of machines that are in place, if they are being used, what products are being vended and how well maintained they are. The Competition Research some of the other vending players in the local market. You should see their company details on the side of their machines and you will find many of them listed in local business directories such as The Yellow Pages. Learn 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 maker' for a possible machine location and find out how they work with their clients. Do they offer commissions? What can you learn from the way that they are doing their marketing? How can you improve on what they currently offer? 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 walk for 10 minutes or more to a store. People always
have alternatives though and if they don't like your machines or your service they bring products from home or take the trouble to purchase them elsewhere. Distributors and Suppliers Machinery manufacturers and dealers may be able to give you specific information relating to your market when you are starting out. An even better source of market information will probably be local distributors or the suppliers of the inventory that you use to stock your machines. They will be dealing with other local vendors and will be able to tell you what products are selling well in vending machines and what product combinations and volumes you should start out with. Of course every location will be different though so you will also want to start collecting your own data as soon as each machine starts making sales. Updating your Research Don't forget that things change. Your initial market research will be extremely useful but it must be updated from time to time so that you keep up to date with an ever changing market. Changes in demographics and product trends will mean that you may have to consider switching machines, products and locations from time to time. Keep your finger on the pulse so that you don't fall behind and lose market share to those that are paying more attention.
9) Buy a Vending Route or Start your Own?
Once you have decided to enter the vending business, one of the many choices that you will have to make is whether to buy a route from another operator or to start your own from scratch. Your decision will depend on many factors and in this article we look at the differences that you will be facing with each option. The Price If you are buying an established business that runs well, makes money and has good relationships in place then you will pay for this privilege. The cost of buying the business will be considerable but if you can manage to keep the business on its successful course then you will recoup your investment over time. On the other hand you can start up your own vending operation on an extremely low budget but it will take time to get it profitable. It's all about deciding which approach will give you the best return on the time and money that you are investing. Set your own Course or Follow Others When you start your own business you can start it off the way that you like and create something unique that you can be proud of. By buying a business you will be inheriting the creation of someone else and all the good and bad things that go along with it. Think about your own plans and goals and decide if you can use someone else's business as a vehicle to achieve them. Your Personality Starting up a vending machine business from scratch will take time and determination. You will have to learn through your own research and trial and error. This process can be lengthy before you start to see success. If you feel that you are the kind of person that will become disheartened easily and have trouble seeing a project through to the end then you may be better to start off with an existing business that works well right away (if you can afford it).
Relationships If you buy a vending route then you should find that it is easy to carry on the relationships that the former owner worked hard to establish. Make sure that you have the seller introduce you to all the key suppliers and location managers before you buy. If you are starting from scratch then you will 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 will find numerous information resources available. You may even be able to find a successful vending business operator (who is not in direct competition with you) to mentor you for a small fee. You could also consider starting out working for a large vending company to get a feel for the business before jumping into your own venture Risk No matter which path you decide to follow there are risks involved. The vending industry is rife with scams and rip-off artists that prey on newcomers to the industry. If 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 packages. Look into subscribing to industry publications and contact the industry association NAMA before making any major purchases. Do a search online and check with the Better Business Bureau to find out if a company that you want to deal with has had any complaints filed against it. On the other hand there are also risks involved with buying an existing business. Vendors selling their businesses can obviously inflate figures and generally make their business sound like a much better opportunity than it really is to justify a higher sale price. Do your due diligence here and look for proof that the business is indeed performing at the level that is promised. Get your accountant and lawyer involved and consider getting the business valued by an independent expert. Try to find out if the owner has a genuine reason for selling and insist on an arrangement whereby the previous owner stays on for a few months to teach you
the ropes. Insist on paying the sale price in installments. Give yourself a way out of the deal if you observe the returns from the machines over a few months and find out that they are not as high as the owner claimed they were. Start off Slow or Fast? With your own vending business you will be able to start off slowly, buying a few machines here and there. You could even keep your day job for the first year while your business slowly grows. Buying an existing business though will mean jumping in at the deep end so you must be prepared and know something about managing a business if you are to keep it performing well. By starting off small with your own business you won't be committing yourself fully. You can give yourself a trial period to see if it works out without spending a fortune on a business that may be difficult to exit if you find that it is not what you want to do. Choosing whether to buy an existing vending business or to start your own is not an easy decision. Your decision will be influenced by your access to funding, your past experience in business and your personality as well as the level of risk that you are prepared to take on. Both alternatives offer you an excellent way to get into what is still one of the best business opportunities around.
10) Sample Business Plan Template
The preparation of your vending machine business plan will be the most important thing that you do prior to launching your new venture. A business plan will be a crucial resource that will help guide your business in the right direction. A business plan sets out what has to happen in order for you to reach your goals, outlines how you will do it and sets out alternative plans in case things change further down the line. It forces you to do the research that is necessary in order to find out if there really is a market for the vending machines and locations that you have in mind. It may be necessary to have a plan written in a formal, professional style if your aim is to use it to convince bankers or investors to support your idea. However, even if you don't have anything to prove to anyone, your business plan will help to confirm the viability of your ideas in your own mind. Keep a copy of your plan on your PC as well 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 make sure that you are on track to meet targets. Don't be afraid to make changes to the plan where necessary. Every entrepreneur or business consultant will have different ideas about how a business plan should be structured. There are many different templates available online and some sites even have samples relating directly to the vending machine industry. Below we offer an example of a suitable outline with section titles that you might consider including in your own vending machine business plan. Cover and Contents Page Start off with a cover page with a heading to let people know what the report is about, who the author is and when it was written. If you will be presenting the report to many different people then you may consider including a personalized cover letter with each copy of the plan. Start out with a table of contents so that readers can easily find their way around the report.
Executive Summary Summarize the other sections of your business plan. Present some brief information on the opportunities that you see in the market and summarize what it is that you intend to do with your business to capitalize on these opportunities. Try to entice readers into reading the whole report. Background Offer the reader some background information on yourself and your reasons for starting a vending machine business. Provide details of any relevant experience or competitive advantages that you have. You can also include a vending industry background showing national industry data as well as information about the local industry that you plan on entering. Mission Statement A mission statement is usually a phrase or a couple of short sentences that summarizes what your business is all about, what it does and how well it does it. It is a good way 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 how you strive to be better than your competitors. Goals and Objectives State the goals that you wish to achieve in the short and medium terms. Goals could include placing a certain number a vending machines or reaching a certain income level per machine. Start up Requirements Set out a list of start up costs and calculate the total amount of capital that will be needed for the company to get started. Report on some of the funding options that are available to the owners. In this section of the report you can also mention some of the other things that
must happen in order for the business to commence trading legally and professionally. Mention the processes and the fees involved with applying for licenses, permits and other paperwork under the laws of the region where the business will be operating. Ownership and Management Structure Note who the founders of the company are and the particular ownership interest that each has in the business. For those who will be active in the management of the business it is important to outline what role they will play and their responsibilities. Will the business be registered as a sole proprietorship, a partnership or a corporation? Business Operations This section of a business plan should outline the details of how you plan on running the vending machine business. Include information on where your business will be based, administration, any plans that you have to hire employees and how your business will run on a day to day basis. Include details on vending machines, maintenance, products, distributors, route planning and how you will record and manage sales data. What systems will you put in place to maximize productivity and efficiency? Try to come up with solid reasons why you are choosing a certain vending machine, product line or system. Wherever possible include some supporting evidence from research that you have done. Market Analysis Using data from your market research you can report on the current state of your target market and identify some of the opportunities. Here you can include demographic data as well as information that you have gathered from surveys and other investigations. Provide information on the competition in your target area and examine their strengths and weaknesses. Look at ways of delivering products and services via your machines that are distinctly different from what your competitors are
offering. Get ideas from them about what is working well and what isn't. Look for a competitive edge. Don't forget to also mention indirect competitors such as convenience stores, in-house cafeterias or food vans. Marketing Plan Outline a strategy for creating a vending brand that will meet market needs. Based on the market opportunities that you see, set out a strategy for meeting customer needs in terms of locations, vending machines, product lines and pricing. Provide details on how you plan on getting new machine locations, arranging appointments with 'decision makers' and selling your services to them. Your marketing could mostly be done by approaching decision makers directly or you could rely on advertising to generate some inquiries. Also outline your plan for marketing directly to your customers or end users. These could include 'point of sale' promotions on the machine front or how you or your staff will build relationships with customers when you visit the premises where your machines are located. You should also mention how you plan on maintaining vending accounts and customer satisfaction in the long term. Customer retention is just as important as customer acquisition. Financial Planning Use a spreadsheet program to set out forecasts of cash flows in and out of your vending machine business over a hypothetical two year time period. If you have done your research you should be able to anticipate monthly income and expenses going forward. You will thus be able to determine future levels of profitability and a break even point. Run a variety of different scenarios that consider a conservative growth rate, an expected growth rate and an optimistic growth rate. Things don't always happen like you expect so it is important that you plan for a variety of outcomes. Appendix
Lastly, you should attach an appendix 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. Try to back up all of your assumptions with proof wherever possible.
11) Some Warnings about Scams
So many people perceive vending machines to be an easy way to make a lot of money with little input of time or effort. Many scams have sprung up that prey on these hopeful entrepreneurs and many people fall for them. While owning a vending machine business can be a very lucrative business you really have to create your own opportunities. There are so many fraudsters selling ready-made opportunities but for the most part these systems don't work or will end up costing you thousands more than they are worth. The Federal Trade Commission frequently does sweeps to clean up these vending business scams but new ones seem to emerge all the time so you have to beware. In this section I look at some of these scams in detail and offer advice on how you can avoid them. Machine Manufacturers and Distributors While vending machine manufacturers and distributors are mostly legitimate in the ways that they run their businesses, they are very good at selling their products. Many people fall for the sales talk and end up with more vending equipment, and more expensive equipment than what they really needed. This is not a scam but merely one of the first things that you need to be aware of. The best approach is to start off with only one or two machines and build up from there. Be wary of any company that tries to sell you a set of ten or twenty machines as they know that this is not the best move for a new market player and are only thinking of their bottom line. Seminars and 'Get Rich Quick' Schemes Occasionally you will see seminars advertised that promise you 'easy riches' with your own vending machine business. Most of these seminars are not worth attending as they offer very little in the way of useful advice but rather offer hype, false promises and a sales pitch.
Some scams give out the impression that they will be employing you and guaranteeing you a certain level of income. However, if you read the small print you will usually find that you are purchasing the machines by yourself and taking on the risk just as you would with your own 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 will refer you to some of their so called 'satisfied customers' and they will give you a glowing report on the success that they have had with their methods. These references have often been set up with people who are paid to make false statements. Professional Locators Start out by establishing your own route. There are professional 'locators' that will find locations for you but many vending business owners have reported that these companies almost never come up with worthwhile locations that work out to be profitable. After all, if you were running a 'locator' service and found a great location, wouldn't you be tempted just to put your own machine at the site? There are some great locators out there but they can be hard to find. If you do deal with them make 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 ask for 50% of the fee up front and this is reasonable. Buying Vending Routes You also have to be very careful when it comes to buying vending routes off other operators. While this can be a great way of picking up new accounts if you are not much of a salesman there are many potential pitfalls to be aware of. There are scams out there where sellers have arrangements with certain locations and they will sell you a route, let you run it for a while and then slowly take back all the accounts. The scammer usually has a deal with the 'decision maker' and they get their account back a few months later. This kind of scam is not common but there have been reports of such things happening. You should make sure that you go with the seller while he services his route several times so that you get a fair idea of what you will be getting into. Having a contract is place with the client, and the seller can also offer you some protection.
Avoiding Vending Scams Stay away from the sharks at the beginning by sourcing your own vending machines on Ebay or from other trade publications. You can usually pick up quality used machines for only a fraction of the price of a new machine. One good way to spot a scam is to ask yourself if the offer seems too good to be true. If it seems too good to be true then it probably is and you would do well to avoid it. The Internet is full of sad stories of entrepreneurs falling for scams and ending up with a garage full of machines because the routes and systems that they were promised were not profitable and just not worth the time. You should do your due diligence before entering any kind of arrangement with any vending industry company. The Better Business Bureau website will alert you if the company in question has had any genuine complaints filed against it. You can also check the US National Automatic Merchandising Association (NAMA) website for lists of reliable companies in the industry. Don't let yourself be suckered by scams and 'get rich quick' schemes. Do your own independent research and be careful who you buy machines from. Start out by accepting the fact that you will have to work hard to grow your own successful vending business rather than buying an 'easy opportunity' and ending up being disappointed.
12) Growing Your Business With Charities
One great way to convince 'decision makers' to allow you to place your vending machines on their premises is to associate your company with a charity. This can often allow you to make greater profits than if you were to give them a commission and it allows you to do some good in the community as well. Let's take a look at how your business can benefit by working with vending machine charity programs. Partnering with a Charity It is quite common for vending business operators to partner with charities. This makes your service more marketable and can help you to win locations and improve sales. If the donations are coming directly from your business then they are also tax deductible. Of course you will still be running a business and are allowed to profit. Only a share of your profits will be going to a charitable organization. It is not hard to find charities to work with these days and some of them actively market themselves to vending machine operators. Some reputable charities will let you officially represent them for as little as one or two dollars per machine, per month. Dealing with the Issue of How Much Money Goes to Charity The key to leveraging the charity approach is to give the 'decision maker' the impression that having your machine at their location will really make a difference and raise a decent amount of money. In reality though the donation that you are giving from the machine that is on their premises will most probably be quite small. Vending machine charity is a win-win situation for everyone involved but to make your business model work it is best to make people feel like they are giving a lot when in fact they are giving just a little.
Most 'decision makers' will be skeptical until they see official documentation. Once they realize that you are a legitimate representative they will sometimes want to know exactly how much of your profits are going to the charity in question. There are many ways of calculating the contribution that your business will give to your charity partner. It is common to donate a fixed rate per machine or to pay a percentage of machine takings. A fair percentage to give to charity and still maintain profitability for your business would be around 10% to 15%. Many vendors come out and state clearly to clients that they give a percentage of machine takings to charity if this is indeed the case. However a contribution of just a small percentage can sound stingy to some people so there are ways to make your contribution sound more impressive. A better way is to let 'decision makers' know your 'total contribution' to the charity that your business is associated with. You can say that over the last year you have given over $5000 to the charity in question. In some cases you will be able to get a letter that backs up your statement. If you haven't been in business long you can always say that your goal is to give $5000 to the charity in the next year and to achieve that you need to place a certain number of machines. The fact is that each location won't be contributing much to the charity after you allow for your costs and your profit. If you allow the 'decision maker' to do a mental calculation of the small amount that their location will be contributing you may be giving them an excuse to back out of the deal. Rather you should highlight the fact that their contribution along with all your other locations add up to a considerable donation every month or year. Other Tips for Vending in the Name of a Charity You should carry official charity paperwork at all times as well as wear their badges if they have them. When 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 work with in their vending business name. Be sure to not misrepresent yourself. If questioned on the subject you should make it clear that you are only working with the charitable organization and are
not directly hired by them. Choose a cause that you are genuinely interested in and concerned about and then you will be able to talk freely on the topic and your passion will be more likely to come across in the conversation. Choose a local charity if there is something that is appropriate as people are likely to be more concerned about supporting local causes. Once you have secured a location, make sure that you place the charity's stickers or other branding on your machines in a way that can enhance sales without obscuring the machines vending face. Many vendors have done extremely well by working with charities. If you go about vending machine charity correctly and with integrity you will find it easier to win locations and thus your business will be more profitable.
13) Should you Pay Commissions?
When it comes to securing an agreement to locate a machine in a certain location, the 'decision maker' will often expect to receive a cut of the profit for giving you the right to do so. Because of this natural 'what's in it for me?' attitude that many people have it is important that you have a firm policy in place so that you can deal with the question when it arises. As you meet with prospective clients you should try to convince them that there are advantages for them in having one of your vending machines on their premises. Let them know that your machines offer a service to their customers or employees by offering them convenience and by providing them with reasonably priced products. Let them know that you would rather keep prices down then have to increase prices to cover their commission. Some locations will come up with the logical argument that the machine will be using their power. You 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 down after hours. Some vendors feel that commissions are too much hassle and they have a 'no commission' policy. They will politely try to avoid the issue and if pressed they would rather lose the account than give in. These vendors prefer to compete by offering high quality products and excellent service and a large part of the market will find this to be enough with financial compensation not being necessary. Some vending businesses are officially associated with charities and this can make it difficult for them to offer commissions as well. Other vendors will enter into agreements that offer the authorizing party a share of machine takings. Sometimes this is absolutely necessary in order for a vending business owner to win a large account. If the account is really worthwhile you can even assure the 'decision maker' that they can watch you as you empty the machine. Some people find it hard to trust others and this should reassure them that they will indeed get the full commission that they are owed.
Some vendors like to let an account run for a while before they will discuss a commission rate. This reduces their risk as they can assess how the machine is performing at that location and calculate the commission accordingly. Other operators like to sign a contract with the decision maker setting out the commission rate as a favorable part of the deal for the authorizing party. At the same time the vendor will 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 5% to 10% of gross sales on powered machines and even less on machines that don't require electricity. Locations that have an exceptional amount of foot traffic may expect even higher rates and 20% would not be unrealistic for these locations. Vending business commissions often only add up to a small amount but having to organize payment is an extra hassle for operators. However you approach this issue you should make sure that you set out a firm policy before you talk to prospective clients. By setting your rules, being consistent and not letting clients push you around over commissions you will find that there are good market opportunities out there for your business whether you offer commissions or not.
14) Suitable Machine Locations
Vending machines can be placed just about anywhere and it can be very hard to tell which locations will be profitable and which won't be worth the time. You only need three or four people to use a machine regularly to make a location worthwhile, so it is possible to put machines in small businesses or offices and to be rewarded for your efforts. Other locations can seem to be busy at certain times of the day but only get occasional sales instead of loyal customers. The decision to place a machine comes down to a combination of intuition, experience and luck. Let's consider a variety of suitable locations that you might consider. The Workplace - Offices and Factories People need access to food, snacks and beverages during their working day. Offices, factories and other working environments can offer great potential, even if there are convenience stores nearby. The ideal situation is where you have people on the premises all day. On the other hand, a less than ideal situation would be an office with a lot of sales representatives who are out on the road for large parts of the day. As a rule of thumb, look for businesses with at least 50 employees as any less than this number and the location is probably not worth the time and effort. Apartments and Hotels Locating a vending machine close to where a lot of people are living or staying can naturally be a good move and many venders specialize in this area. Getting to know real estate managers is the key here as they are in charge of numerous properties and can usually help to smooth a deal through with the owner. Venders report greater success in lower socio-economic areas than they do in more middle class apartments. Try to have your machines inside the common areas of the complex so that they can be secure at night. The laundry is a great
location to have a machine as residents will usually spend a fair bit of time there waiting around while they do their washing. Schools and Universities Accounts in the educational sector can be very lucrative but are often tough to get. Schools and other educational institutions usually only work with one vendor and often have long term agreements with them. Modern schools catering to students under 18 years old will nearly always have strict controls on the types of snacks and beverages that can be vended to their students. You will have to have a range of healthy snacks and juices and still offer prices that students can afford. Schools nearly always push for the maximum amount of commission. They usually have plans to use the funds to contribute to schools projects such as building a new swimming pool. Retailers and Service Providers While some stores will like to sell their own drinks and snacks there are many others that find that it is not worth the hassle. A surprising number of people pass through hair salons, doctor's clinics and other small stores and service providers. A 'waiting room' location can do an amazing turnover from customers and employees as well. Shopping Malls With a huge amount of foot traffic, malls are a great place to locate machines. Most malls enter into high commission agreements with large vending companies so it can be a tough sector for small operators to break into. Others Locations The main categories are covered above but there are numerous other locations that you could consider. You can pretty much locate a machine in, or close to, any public or privately owned building and this means that the scope of possibilities is limited only by your imagination. Airports, car sales yards, police stations, train
stations, swimming pools, prisons, churches and parks are a few of the many options.
15) What to Consider when Locating Machines
The opportunities are endless when it comes to suitable locations to place a vending machine. At first glance you might think that the only requirements for a successful location are having enough people nearby and permission for placing your machine. However when it comes to choosing profitable locations for vending machines there is much more to it than meets the eye. What Kind of Locations to Look For The first step is to sit down and brainstorm a list of suitable vending machine locations in the area that you are targeting. You may decide to target schools, offices or factories specifically or you may decide to take whatever you can get. It could be a good idea to focus on smaller towns or suburbs near your home where the vending business is not as competitive as in the city. Route Planning Mark out your territory on a map. The key to maximizing productivity is keeping your route tight so that you are efficient with your driving time and fuel costs. Try to keep all your accounts within a limited radius of your home base or secure one large account first and then try to get other accounts nearby. Be Observant Keep an eye on changes and developments within the communities that you are targeting. It is safe to say that most obvious location opportunities will have already been targeted by vending companies. Things do change though and you will find that many factors can cause bad locations to suddenly becoming good ones. Look for opportunities and be the first to strike. Scope out your area and look for new buildings or new tenants moving into existing buildings. One way to judge potential is to examine the number of cars parked outside a specific location. You can also observe the number of staff
working on night shifts as vending machines are often well used by this group. Do a Head Count You can learn a lot by counting heads or observing traffic patterns. Visit a potential location and try to find out how many people are based there at various times of day and how many people are coming and going. There is a good chance that you can make a location with 50 employees profitable. Any less than that figure though and you have to give the account some serious thought. When weighing up the pros and cons of a potential workplace location take note of how many employees leave the building during break times. Competitors In determining the viability of a location you need to take into account the competition. Your competitors are not only other vending machine operators but also local retailers such as convenience stores. If they are within a five minute walk from your machine then you will be in direct competition with them and you will lose sales to them. However, the threat posed by any stores beyond a walking distance of about five minutes will be diminished considerably. Ideally you want to have a 'captive audience' in that your customers have little choice but to use your machine. Other more direct competitors would include in-house cafeterias if you are dealing with larger organizations. Food trucks can also pose a threat if they stop nearby your locations. Demographics When making the decision to place a machine we should not only be concerned with the number of people who are nearby but we should also give some thought to demographics. We can judge how likely somebody is to use a vending machine by considering their age, gender and the line of work that they are in. Prospective vendors should note that men typically buy more snacks and beverages from vending machines than women and blue collar workers in general buy more than white collar workers. A NAMA survey noted that around 41% of vending machines were located at manufacturing locations while only 26% were
located at white collar office locations. Survey a Location If you are really unsure about the viability of a location ask the location manager if you could ask them and their staff some questions. Find out about the demographics of the employees, their working hours and their break times. Survey staff directly and ask them if they would use a vending machine if one was available, how often they would use it and what kind of products they would consider purchasing.
16) Tips for Beginners
Vending offers entrepreneurs a unique business model that can be highly profitable, smooth running and recession proof, at least if they set themselves up right from the beginning. Here are some vending business tips for getting started, managing and marketing a company in this exciting industry. Find a Mentor Try to get a mentor who already has a successful vending business. If they are working a slightly different market or niche from yours they will often be happy to help a newcomer 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 experienced vendor in action will give you a great idea of what the daily life of a vending machine business operator entails. Work with your Competitors Another tip is to forge relationships with other vending business operators as soon as possible. Look into trading accounts with them if possible so that each of you can keep your respective routes tight to save on time and fuel. Work from Home 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 won't have large numbers of customers or employees visiting your office. Check with local authorities though to make sure that zoning regulations for your street allow you to run a home business there. Start out Part-Time Run your vending business on a part-time basis before you quit your day job and go at it full time. You should have no problem running a small business like this around your working hours and it will give you a chance to see how it is working out before you take the plunge and go full time.
Stick with Proven Concepts that Work Don't go for new vending concepts right away as there is a good chance that they don't work out well. It is safer to start off sticking with the traditional favorites such as candy, snacks and drinks until you build up a sizable business and can afford to start taking risks. Get the Client Before the Machine This tip can save you a lot of headaches. Many vending business operators rush out and buy a lot of machinery and then look 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. Once you sign up a location you can then proceed to purchase machinery that is suited exactly to the needs of that client. Don't Believe the Hype Scams are common in the vending industry and you are better to avoid any systems or schemes that just sound too good to be true. Do your Due Diligence Do your due diligence. If you buy a vending route then you should make sure that the locations that you are inheriting are profitable. Do your research and seek proof to back up all of the seller's claims. Be Organized Start your business off right by implementing systems that can help you to stay organized and increase productivity. Look into a software package like Vend-Trak that is designed specifically for vending machine businesses. Maximize Income from Available Space The selection of products in each vending machine will go a long way towards determining your profitability. Customers at each location vary enormously in their tastes and buying decisions.
When you start off you can ask your suppliers for ideas on product variety and volume. But you should immediately start keeping data for each machine about what is selling and what isn't. This way you can optimize sales and give your customers what they want. Aim to re-supply your machines when they are about half full so that you don't run out of certain items and disappoint customers. Build a Brand One of the more unusual vending business tips that few operators pay attention to is brand development. Too many vendors don't put any effort into this and therefore lose out on a lot of opportunity. Get a logo design so that you can brand your vehicles, machines and even uniforms. Branding will help you to present a professional image and get your company name out there in public view. Over time, the high standards that your brand represents will allow you to grow a reputation that will allow you to more easily win new locations. Look for Locations that Already Have Machines Many vendors make the mistake of looking for locations that don't currently have vending machines on site. The problem here is that these opportunities are mostly unprofitable and have probably been passed over by other operators. The tip here is to go after busy sites that already have machines. Many locations will be dissatisfied with the service that they are currently getting from their vending operator and they may consider changing if you have something better to offer. Add Machines to your Existing Locations After you have taken the time to build relationships with the 'decision makers' and have proven that you offer great machines and service why not try to up-sell them with additional options. Try to think of something that compliments your existing setup, put your proposal forward and you may see your revenue from that site
double over night. There are many things that you can do to start up successfully in vending and to maximize your profits. By thinking 'outside the box' and by borrowing ideas from other industries it is possible to give yourself a real edge over your competitors. Use some of the above tips as well as your own ideas and allow your business to see profit levels that you never thought possible.
17) Income Opportunities - Earning Six Figures
When entrepreneurs first start to considering vending as a business opportunity, one of the first questions that they often ask is if it is possible to earn a' six figure' income in this industry. 'Six figures', or $100,000 or more in pre-tax earnings per year is still seen as a reasonably good benchmark for success by many people. They want to know that they will have a realistic chance of hitting this income level within a few years before they put their time and capital into a new business venture. Let's look at some of the factors that typically separate the operators with 'six figure' incomes from the rest. Part Time or Full Time? It is common to start off doing vending part time while also keeping a regular job. Some vending business operators make a nice income to supplement their day job salary. However, to reach the $100,000 profit level you will probably need to eventually go full time. Understand Vending Machines Successful operators understand vending equipment and closely follow industry developments. Understanding in these areas allows the business operator to acquire good quality machines for the best prices and to organize their maintenance effectively. Branding The winners in this business understand that branding is important. If you establish a name and a reputation for yourself over several years then you will find that new accounts will come to you instead of you having to go out and get them all the time.
Organization The high income earners in the vending industry are organized and manage their time well. Computer systems and software can be used as a way of collecting data that can help a vending business owner make crucial decisions that can affect profitability. While some see vending as a way of earning easy passive income, the most successful players realize that this comes many years down the road and that there is a lot of work to do before you get to that point. Master the Art of Sales Getting new locations comes down to having an attractive offer and solid sales skills. To be successful you need to fine tune the art of scoping prospective locations, getting appointments with decision makers and selling them on what your machines can do for them and their business. Good vendors find ways of making their machines more marketable such as working in cooperation with charities. Hiring Employees While you can start off doing everything yourself you will soon find that to scale your business up to the' six figure' income level you will need to hire reliable staff to do the footwork for you while you concentrate on growing your business. Customer Relations Always maintain the highest standard of customer service. Service machines regularly and keep them clean and presentable. Never give 'decision makers' at your locations any excuse to ask you to take your machines off their premises. If you maintain good relations with managers at each location you may even be able to sign them up for additional machines. This can be an easy way to increase revenue without having to find new clients. You will also get referrals from your clients if you keep them happy. Commissions Most of the vendors that see a decent level of income learn how to deal with the
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 takings. Successful vending business operators do however realize that some locations are so good that a commission can be justified if it is required to win the account. Attention to Detail Vending is a numbers game and the top entrepreneurs in this industry realize the variables that must be focused on to improve income levels. To get to a decent level of earnings you must maximize your locations, maximize the quality of your locations, reduce the frequency of machine breakdowns, reduce commission paid to location mangers and maximize the efficiency of your employees. Getting the right product mix, or category management is also crucial so that your stock sells well and so that you don't run out of some items quickly while others are slower to sell. In this way you can increase sales and reduce the frequency of visits to re-stock machines. The Right Attitude Determination and a willingness 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 rejection as you try to place machines. The key to success is to learn from failure and rejection and to see them as opportunities to learn how to improve and refine your systems until you find ones that work. Keep trying, trying and trying again and success is inevitable. Could you earn a 'six figure' vending business income? With the low barriers to entry and low start up costs that this industry offers it is definitely an opportunity worthy of consideration.
18) A Buyers Guide to Equipment
There are many different kinds of vending equipment. As a business operator in this industry you should be familiar with a variety of machinery so that you have something appropriate for any location. Let's take a look at some of the various machine types and their key features. We will also set out some strategies for acquiring new or used vending equipment. Types of Vending Equipment Some vending machines such as the kind that sell gum balls or condoms are small enough to hang on a wall. Others are set up to sell hot and cold beverages as well as a variety of snack products and can take up a considerable amount of floor space. Vending equipment comes in a variety of sizes and shapes and there is something suitable for just about any location. Some of the smaller machines don't require a power supply and can therefore be much more flexible in terms of where they are used. Most of the larger machines do require a nearby power socket though for heating, cooling or other machine functions. Look for machines that are a little different, add value to a location or offer customers more than just convenience. Some of the new vending machines are more interactive, such as the ones where kids can watch a bouncy ball roll down after they have purchased it. Other machines are returning to the 'classic look' that vending machines had in the 1950's to cash in on baby boomer nostalgia. Pricing and Payments Machines perform better if they are able to offer customers a variety of products and a variety of payment options. Obviously, customers should be given a choice of payment options if possible. Many machines now allow a customer without change in their pocket to be able to pay with bills or even a credit card. It is extremely convenient for a business owner to be able to change the pricing of
the machine's products easily without requiring major upgrades and many of the modern machines make these price changes easy to implement. If the cost of your supplies goes up then you are able to quickly respond by passing these price increases onto your customers. Buying Second Hand Equipment If you are new to the business then buying new machines may not be the best move for you. Instead you should look at leasing options or buying second hand equipment. Vending machine prices can vary wildly and some dealers will try to sell used machines for the same price as new ones so it pays to shop around. Parts and Maintenance Before you buy used machinery you should make sure that you have a solution in the way of parts and expertise for fixing that particular brand of machine when repairs are necessary. The best thing to do is to look for the production or model number and contact the manufacturer to find out if they can still supply parts for that model. Have a technician inspect equipment before you make a purchase and get a professional opinion instead of taking unnecessary risks. You can rely on technicians to fix your machines for you but this gets expensive if you have to call them out for every little thing. Observe them in action so that you can at least learn how to carry out basic repairs yourself. Practice doing some basic maintenance on your machines at home. You have to be sure that if you carry out maintenance at your locations that you get it done quickly and with 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 with a little assistance from your suppliers help desk. Buying New Machines There are many advantages to buying new equipment. New machines will come with a guarantee so you will be covered if things go wrong during the warranty period. There are a variety of 'smart' vending machines entering the market that are able
to transmit data to you from their remote locations. You are able to find out in real time if machines have malfunctioned, if alarms have gone off and what their inventory levels are. This data can save you an incredible amount of time by reducing the amount of visits that you have to make to each machine. Make sure that you choose your vending equipment carefully. Do some research into some of your more successful competitors and find out who their suppliers are. Having reliable equipment that requires little maintenance and functions as it is supposed to for customers is one major part of ensuring that your business will succeed.
19) Good Products for Vending Machines
When it comes to running a vending business you have to carefully consider the kind of machines that you want and exactly what you want to sell. It can be wise to stick with a popular niche and vend products that have proven to be popular and have a track record of success. However some entrepreneurs have also done very well by testing out new concepts and have become pioneers in their introduction. Let's take a look 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. Food, Snacks and Beverages According to the National Automatic Vending Association in the US (NAMA), canned beverages make up 40% of the overall vending market, snacks 19%, food 10%, hot cup beverages 8% and cold cup beverages 8%. Snacks and beverages altogether represent 85% of the market in the US. While opportunities are plentiful, many experienced operators find that it can be labor intensive as the products are bulky and need to be re-stocked often. Profit can also be quite low due to products in this area being priced low. Even if you mark up 100% from your purchase price it can be difficult to make money unless your machines are performing really well. Most experienced operators report that junk food and soda options are much more popular than health bars and fruit juice. So unless you are locating in a school or outside of a gym then you may be better off with the former as it has proven to be more profitable. Gum Balls and Bulk Candy Gum balls and other carefully selected candy items can offer far higher mark ups from the purchase price. A gum ball that may cost three cents can be marked up
more than 700% and sold for 20 cents or more. Even though we are only talking about a small amount of money here, one of these machines can hold thousands of gum balls. These kinds of machines don't have to be re-stocked often and when they are the owner can usually take out over $500 of almost pure profit. Candy machines can suit any location, though they are best suited to areas with a lot of children nearby. One interesting candy related niche market that some operators are getting into is small machines in restaurants selling 'after dinner' mints to guests. Cigarettes Cigarettes have traditionally sold well via vending machines in the right locations and currently represent 2% of the industry according to NAMA. However the market lately is changing with the gradual introduction of more anti-smoking regulations and the cigarette vending business therefore doesn't look like it will have a bright future. Toys and Stickers Toys and trinkets that kids love, such as bouncy balls and stickers, can also have an amazingly high markup and don't have to be replenished so often. In a location with lots of 'young family' traffic these kinds of products can do really well. Newspapers Newspapers have to be re-stocked daily of course as nobody would want to buy yesterday's newspaper. This makes newspaper vending machines a bad proposition for most vendors who would prefer to re-stock less frequently unless the location has a huge volume of foot traffic. Locations that are suitable for newspaper vending include busy street corners, train stations and airports. Bathroom Related Products In the right environment products such as soap, sanitary pads, condoms and perfumes can be vended from small units attached to bathroom walls.
Arcade and Video Games The entertainment market is huge and many entrepreneurs choose to specialize in this area alone. With vended forms of entertainment there is usually no product cost involved and machines never have to be re-stocked which makes this sector quite lucrative for those who know what they are doing. Other Products and Services Other products and services that are sold via vending machines include CD's, cameras, pantyhose, Internet services, DVD rentals and photos. The Japanese, who are usually the world leaders when it comes to vending machines even sell cans of beer via machine. One example of an interesting new vending service concept is to perform breath alcohol testing via a machine and locate them in or around bars or night clubs. New vending concepts are arriving all the time and big profits can be made if you are able to jump on a new idea at the right time. But at the same time, new business owners would do well to concentrate on the vending machine products that make up the bulk of the market share such as snacks, candy and beverages as these are proven winners and are more likely to succeed in any given location. Basically any product or service should eventually be able to be offered via a machine for a favorable cost and at the greatest convenience. The vending machine industry definitely has a bright future.
20) Vending Business Contracts
As a vending business operator you may need a contract that can be signed between yourself as the vending operator and the client or person responsible for the location where you want to place your machine. Not all vendors use contracts. In some cases they may not be worth the time and a casual agreement will be sufficient. For important locations and expensive machinery though, a proper contract can offer protection and piece of mind to both parties. A contract should let both parties know clearly where they stand and help them to avoid unnecessary conflicts. The best way to put together a contract for your business is to firstly take a look at some examples that are in use by other vending companies. You can then get ideas for suitable clauses for your own contract and consider some others that are relevant to your own unique situation. Lastly you should have a lawyer write up the final contract to ensure that the wording is correct and that it provides you with the protection that you are seeking. Remember that there are two sides that have to agree and sign to make a contract valid. If you stack all the clauses in your favor then you may find that you lose a client to your competitors. Be 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. The following list sets out some typical clauses that vending business contracts could include. Note that this is not an extensive list and that every case will be different. The Parties Involved A contract should start off by clearly identifying the parties involved. A vending business agreement will be between the 'location' and the 'vendor' and it should clearly state who these two parties are in detail. Legal Requirements
It is reassuring to the client to include a clause stating that the vendor operates their business in full compliance with all state and city regulations relating to vending and the handling of food. Exclusivity Do you have the exclusive right to have your machines at the specified location or is the client able to bring in competitors as well? Commission Payments The agreement should set out details of the financial arrangement between vendor and client. If the client is to be compensated for having a machine on their premises then the commission details should be made clear. Vending Machines Clauses can be set out that limit the type, quality and quantity of vending equipment that is able to be located at the site and how often it is to be cleaned or re-stocked. Vended Products The parties may wish to list out or define precisely what products are able to be vended from machines at the specified location. This will differ on a case by case basis. A school for example may want the vendor to agree to vend only foods that conform to certain health guidelines. The contract may also set out price limitations or minimum portion sizes. Insurance and Damages The contract should mention any liability insurance policy that the vendor has relating to their machinery. It should also note who is responsible for the security of the machines and for any damages should they occur. Electricity and Water
If the machine will be using on-site utilities then the contract should set out who is responsible for paying for these. Placement and Access The 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 blocked in any way. The contract should also set out the rights that the vendor or the vendor's staff have to access the premises to service the machines. Duration, Termination and Renewal The contract will be valid for a fixed term that should be clearly specified. Upon expiration of the contract both parties can then have the option to renegotiate it or extend it if they are still in agreement. The contract should clearly state the terms under which either party is able to cancel. A reasonable amount of notice should be given in writing so that the operator has time to remove the machine or the location manager has time to find another company to organize a replacement. Representatives of the location may also insist that the space occupied by the machine is left in the same condition as it was prior to the installation of the machine. Operators should always give themselves an exit option in the event that a location turns out to be unprofitable or unexpected problems occur.
21) Customer Service
In the vending business customer service is one of the keys to your survival and prosperity. When you think of your customers you should think of two distinct groups of people. Firstly you must consider your client, the manager, 'decision maker' or property owner who has given you permission to have your vending machines on their premises. Secondly you have to consider your end users or customers, the people who are actually using your machines on a regular basis. The Importance of Customer Service Good customer service makes sense for most business models and vending is definitely no exception. Customer service is not just about 'doing the right thing' and respecting those that make your livelihood possible. It also makes good sense financially. The cost of customer acquisition is expensive these days. New vending locations take time and money to get and they often come with a limited number of regular customers. When you consider that the cost of keeping your existing customers happy is much cheaper than acquiring new ones it becomes clear that you must treat them well. People will talk about your machines, your products and your services. Satisfied customers may refer business to you but unsatisfied customers will definitely spread the word like wildfire. Build a strong reputation through strong customer service. Good customer service is about being approachable and living up to the promises that you make to people. Exceptional customer service also involves sometimes going the 'extra mile' or 'over delivering' by doing something that the customer didn't expect. That's how you really impress people and get them talking about you. Managers or 'Decision Makers'
Try to service your machines in a way that you don't interfere with the way that a client runs their business. Some vendors try to sneak in and out like they are invisible and try not to get in the way. This is a good approach but if you do get the chance then a smile or a quick chat can go along way towards maintaining your relationship with the 'decision maker'. Don't hesitate to give some free products to the 'decision maker' and other important people at your locations. If your machines have bill acceptors then you may be able to have coupons made up that can be inserted for free products. If a location is profitable then handing out some free products or vouchers will hardly make any difference to your bottom line. Make 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 break down and always keep your visits to re-supply a machine as short as possible. Never give the 'decision maker' an excuse to want to get rid of your vending machine. Customers or End Users No matter how well you get on with a client or 'decision maker' it is your customers or end users that provide you with your bread and butter. Set out to get customers on your side right from the start. Introduce yourself to staff when you place a new 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. Let people know that they are welcome to call you if they face difficulties with the machine. Give them an email address and say that you would love to hear from them if they have any specific product requests. Passing around a flyer or putting a notice on your machines are good ways to communicate with your customers. Let people know your refund policy if they encounter problems with your machine and how they can contact you. Being able to give people coupons instead of a refund is the best option as you can mail them out easier than cash and you know that the money will be going back into your business.
Get people into the habit of using your machines right away. While introducing yourself to people at a new location you can pass around a few coins and invite people to try out your machine. Try not to let your machines run out of more than one or two product lines. If customers don't get what they want the first time they may give up on your machine and go elsewhere. Try to re-stock your machines with product before they fall below 50% of their full capacity as an empty machine can look unappealing. Make sure that your machine is well presented and stocked with quality products that are not beyond their expiry dates. When you do visit to service your machines make sure that you are always polite and friendly to people as there is a good chance that they are your customers. If you see someone using one of your vending machines you might consider thanking them for their business. To be successful in this business you need a customer service plan. For the most part you will find that it fairly easy to deliver a high standard of service. It won't cost you a lot and you will end up winning the loyalty of your customers instead of risking losing them.
22) Understanding Marketing
Finding 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. What you need is a marketing strategy to help you to get in touch with prospective clients and successfully sell your service to them. Who will do your Marketing? Ideally, you should approach clients yourself so that you can learn as you go and keep costs to a minimum. Hiring someone to handle your marketing for you is also an option. You could even consider using the services of a professional 'locator' and many businesses have sprung up that offer this service to vendors. What are you Selling? The first step is to define exactly what you are trying to sell. This is not as easy as it sounds as the needs and opportunities at every location will be different. Most business models in other industries require you to choose a product or service and then go out and find a market for it. In vending you would be foolish to buy machines and then go on the lookout for suitable locations. Instead you should be aware of a variety of vending machines and then consider the needs and opportunities of each location on a case by case basis. Win the account first and then acquire the machines to service the location. Who are you Selling to? Think about who your clients are and how you can design a marketing campaign that will appeal to them specifically. You may have to adjust your strategies if you target a variety of different businesses and organizations. If you are approaching schools for instance you should let them know that you can stock your machines with healthy snacks if they require. Take along some samples for them to try and let them know that you strongly agree with their decision to limit their student's intake of junk food.
Make Your Vending Business More Marketable Try to be different with your machines, your service and how you approach your business. Managers at most of the top locations will have already been approached by your competitors and if they want machines then they will have them by now. Try to offer something different or think of a concept that will really appeal to the location in question and add value for their customers. Get inside a business owner's head and think about what they need to improve about their business. Really listen to each client and offer them a customized solution that is tailor made to suit their needs. One good way to strengthen your marketing is to form an association with a charity and carry an official letter from them to your meetings. Let prospects know that for every month your vending machine is located on their premises you will donate a certain amount of money to your charity partner. This usually ends up cheaper than giving them a commission and you can feel good about doing some good in the community. If the 'decision maker' seems determined to get a commission then you should come out with a set percentage of the machines takings. Be prepared to go a little higher if they want to negotiate. Let them know that you will pay them every time you come to collect money from the machine. You can even offer to let them watch you empty the machine and count the money so that they can be sure that they are getting their share. You will also stand a much better chance of winning large accounts if you carry liability insurance of at least a million dollars, which only costs around $40 to $80 a month depending on certain variables. Vending machines are pretty safe these days but accidents have been known to happen. Get Started by Networking Many people get started locating their machines through friends, family members and associates. You are bound to know business owners or people in management positions so this is a great way to kick off your marketing efforts. If you let them
know that you are going into vending they may consider your services or introduce you to other 'decision makers'. The more networking you do and the more you let people know about your business the more likely you are to get referrals. Consider joining your local Chamber of Commerce or other local business associations. Contacting 'Decision Makers' Directly After you have exhausted your personal connections you will have to look elsewhere for opportunities. Once you have some locations in mind you can then try to contact the 'decision makers' there directly. Door-to-door cold calling is the most common approach that is used in the vending industry. Phoning businesses directly can also work well but you will probably be able to make the best impression if you visit locations in person. To be successful, someone should be pounding the pavements at least one or two days a week representing your business and looking for new locations. The first step is to drop off your business card, introduce yourself, identify the 'decision maker' and find out if they currently have any machines in place. The next step is to push for an appointment with the 'decision maker' to go over what you have to offer them or to explain how your solution is better than the one their current operator is providing. Advertising While vending is a business where you usually have to go out and get the customer you can also expect some customers to come to you if you advertise effectively. A Yellow Pages advertisement and advertising on your vehicle can go along way toward bringing in new leads. You should also have a website set up that is optimized for keywords that people might enter if they are looking for vendors in your area. Closing the Deal Once you have an appointment lined up you then need to look at how you plan on winning the account. Set out to impress with your machines by taking along a machine sample (only suitable for smaller machines) or a folder with photographs.
Also take along samples of some of the products that you will be vending through your machines and hand them out to management to try. Let prospects know what's in it for them by highlighting some of the advantages that your machine can offer such as how it can offer their employees more convenience or act as a feature that enhances the experience of their patrons. Understand common concerns that they may have and address them one by one. Always present a professional image by being reasonably well dressed and carry business cards with your company's logo and contact details. Converting a lead into a new client requires skills in salesmanship and you should learn all that you can about seeking out the 'decision maker', body language and how to sell and close a deal. Develop a sales script and a process that you go through with each meeting. Try out different approaches to see what works well so you can refine your system over time to give every lead your best possible shot. Your failure rate will be high so you must learn to deal with rejection. Try to see every rejection as a learning opportunity to improve your sales skills. Success in your vending business marketing requires you to locate great spots for your machines and then to convince the 'decision makers' responsible for those locations to allow you to place your machines there. If you are able to frequently get new leads and become skilled at winning over decision makers you will be well on your way to a 'six figure' income.
23) Forms and Standard Letters
When you start a business you will find that there is a considerable amount of paperwork involved. You will need to establish some forms and standard letter templates that can be changed to suit each situation as it arises. Let's take a closer look at some of the forms, letters and other paperwork that you will need in the vending business. Business Forms Vendors use a variety of business forms. It is convenient if you have standard business forms that you constantly improve all the time as your operation evolves. Instead of having to make a new form up from scratch for every situation you can just pull up a standard form on your computer and adjust it as necessary. Firstly, you will need a form to help you deal with the large numbers of prospects that you will be coming into contact with every week. A basic 'contact form' will allow you to keep a record of every prospect that you talked to and the outcome of your conversation. Also take note of the 'decision maker' at each location, their contact details and the date that you spoke with them. If things go well and you visit the site for further discussion you can then complete a 'location evaluation form'. On this form you need to note down all of the key information about a location that could affect machine performance such as working hours and employee numbers. You will need to record information on the machines that they presently have in place as well as any specific requirements set out by the 'decision maker'. Once you have machines in place a record needs to be kept on every machine so that you can keep track of sales volume and inventory levels. Every vending machine that you are operating should have a file with a fact sheet outlining basic details on the machine, the client and the specific location. Every time you visit that machine you should complete a form to let you know how much inventory was there when you arrived, how much you added and how much cash was collected from the machine.
You also need to keep a detailed maintenance history on each machine and it is convenient to have a form for this purpose. Optimizing sales and profits at each location is all about testing and tracking. You need to stick with core products that are selling and eliminate those that aren't popular. Variety is important and it is also important to rotate in new products occasionally to see if they work out. You 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. Many operators set out charts for each machine that they can quickly refer to when they are out on the road stocking machines. If you have machines in non-public locations you may attach a number a refund forms to a pouch on the side of each machine. This is an extra service that you can offer to customers who didn't get what they paid for and want to be reimbursed at a letter date. Standard Letters Over time your business should develop a set of standard letters. These 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 write 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. Then make the necessary changes to the text that every unique situation will require and you are away laughing. Standard letters are a great way of managing your relationship with your clients and you can have letters ready to welcome clients, thank them for their business and to answer common complaints or requests. Other letters can be used to enhance your marketing by requesting a testimonials or asking for referrals. Surveys
To show your customers that you care and to get some feedback from them you should survey them once or twice a year. Try to find out if they are satisfied with your services and if they have encountered any problems. Try to find ways that you can serve them better and to increase your profits. Put together a one page survey form that you can easily print out or photocopy when you need it. Flyers Sometimes the marketing activities of a vendor require for flyers and other promotional materials to be printed. When you place a new machine it doesn't hurt to pass around a flyer to employees introducing your company to them. Encourage them to use the machines, to report problems to you and to let you know if they have any specific product requests. Your 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.
24) Vending Business Books and Guides
Before taking the plunge with your own business is important that you do some thorough research in order to find out if vending is the right business for you. You will also need to know how to go about starting out right and setting yourself up for success. By reading some of the numerous vending books and guides that are available you will be able to learn a lot about the industry. Quite a few successful vending business owners have published books designed to help beginners get started in the business. In these guides they share their knowledge and experience and offer unique insights into the business that may otherwise take years to figure out. You will be able to avoid making some of the typical mistakes that beginners make when they go into this industry if you do some proper research beforehand. Let's examine some of the factors that you should consider when deciding which books, reports and other information products you should invest in. There are many books related to vending available online from some of the larger book sellers. It is great to order real paperback or hardback books to read and have sitting on your book shelf for future reference. However, don't forget that there are also some great e-book guides that are able to be bought and downloaded online. With e-books you get information instantly and can take action right away instead of waiting for books to be delivered to your home. Many of the digital products that you can buy related to the vending business also offer you much more than a guide book. Some are actually full start up kits and in addition to an expert guide they offer you bonuses such as forms, routing programs, lists of prospective locations and even offers for free coaching. When shopping for information on how to start a vending business it is important to consider the background of the author. One thing that I have noticed is that most of the books available on this topic that you might order off Amazon.com have been written by researchers who haven't actually had any first hand experience in the industry themselves. These writers just write generic 'start a
business' books and throw in some specific information related to vending that they get from research online and interviewing people. On the other hand there are some e-books and guides available for purchase online by real vending professionals. These authors have had first hand success and are willing to share some vending tips and secrets with those starting out in the business. Often these vendors have moved on into more successful ventures and don't mind passing on their knowledge to beginners. These authors may not have such good writing and research skills as those that get published but the information that they share can be more valuable and gives you a real perspective on how the business works. Another advantage with buying e-books or digital products online is that they often give you a 100%' no questions asked' refund if for some reason you feel that you didn't receive value from the information and want your money back. This is not always the case with real paperback and hardback books if you have already read them. If you are going to be investing a considerable amount of time and funding into your own vending business then spending a small amount on books, guides, reports and start up kits on the topic is surely worthwhile. Do yourself a favor and put some time into reading about this industry from a variety of viewpoints. Then you will know that you definitely want to enter this business and you will be able to make informed decisions that will lead you in the right direction.
24) Additional Information
Instead of just jumping into vending and hoping for the best you should prepare by doing as much research on the subject as you can. Let'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. Other Vending Business Operators The best way to get information about the vending business would be to ask some existing operators about the local industry and their businesses. Due to the competitive nature of this business some business owners may be unlikely to share a lot of information and may even discourage you with false information. However some of the more established operators care a lot about improving the often bad reputation that the vending industry has. They may be keen to see new operators start out properly instead of having them end up adding to the myth that vending machines and their owners are not to be trusted. If you try to get talking to a business operator while he or she is re-stocking one of his machines you may be able to get some information out of them as part of a polite conversation but it is unlikely that they would spare a lot of time to go into the details. Having a mentor could be invaluable though and you may find one by approaching successful vendors in other cities and asking them for coaching. The Internet There is actually very little free information available online relating to the vending business specifically. There are a few forums like VendingChat.com where vendors are discussing the business but you have to sift through a lot of chit chat to find much in the way of useful information.
Books and Start up Kits Reading books is a great way to learn and most of the popular online bookstores have a variety of titles specifically related to vending start ups. There are also a number of excellent guides available for purchase on the Internet that have been prepared by experienced vendors who have long track records of success. The great thing about these e-book guides and start up kits is that you can download them immediately instead of having to pick them up from a store or waiting for them to be delivered. Take positive action and get started right away! Magazines Most industries have their own magazine or journals and vending is no exception. Publications like the Vending Times and Automatic Merchandiser can help you learn about the industry and keep you updated once you have started. National Associations There are a number of national associations that you could contact such as NAMA (National Automatic Merchandising Association) and some of them may be able to offer assistance and advice. There is also a number of vending trade fairs internationally and in the US that are worth attending. Machine Manufacturers and Distributors The machine manufacturers and distributors can be a useful source of industry information. You have to be wary though as they will be trying to sell you something and you should be a little skeptical about what you hear from them. Talk to People You will also be surprised as to how much insight into vending can be gained simply by talking to everyday people. Everyone has used vending machines at some time in their lives and some use them every day. Ask them about their experiences with machines, both positive and negative. Ask them about the kinds of products they buy, the location of the vending machines that they use and their reasons for using those specific machines and locations.
It is always a wise move to inform yourself before making any big decisions in life. Starting your own company is a big move and it will pay to review as much information as you can before you jump in. I sincerely hope that you enjoyed this guide. For further information I recommend checking out Vending.org and StartaVendingBiz.com Steve Sutherland June 2012