How Much Money Can Be Made From Owning A Vending Machine?
How much money can really be made from owning a vending machine
? Millions! The only limitation you have when it comes to operating a successful vending machine operation is the limitations that you place on yourself. Your ability to succeed at this venture is dependant however on your business skills. These skills of course include, the ability to plan, market, manage people, resources and product lines, and of course you need to be strong in accounting. In many ways the running of a vending machine operations business is no different than the running of any other business but in other ways it's very much different.
The operation of a vending machine business is able to get underway with only a modest investment and can almost immediately create a positive cash flow. The business can be easily and quickly expanded and the operator can control directly how much he makes on a regular basis. These items above all else set the vending machine operators industry apart from others.
Some people may go into a vending machine business with the mindset that all they will have to do is place the machine, fill them up and count the money that comes rolling in. But the truth is this is a business opportunity that comes dressed in work clothes. The fact is that when you are a vending machine operator you have to like to work. You have to be the kind of person that likes to get up early and stay up late and not mind working on the weekends. A good way to determine if you have what it takes to be a vending machine operator is to follow one around during a typical workday and see if you find yourself being able to keep up with the pace and hours.
To be a successful vending machine business operator you have to be the kind of person who has detailed goals. This is a hallmark of all successful vending machine operators and has been since the dawn of the industry. You have to be able to decide what you want before you take action. You have to be able to not only set a goal but to look at it in minute detail.
Let me give you an example of how goals and details play out in a real world situation. Last year I placed four new accounts in manufacturing facilities which run at least 75 employees over three shifts a day seven days a week. These new accounts have at least 50% Hispanic male workers under the age of 35. I put in snack and soda machines and coffee vending machines. I placed machines which have a "guaranteed vend option" which are late model and refurbished coffee machines. I set the price points as $X for chips and other bagged snacks, $Y for candy and pastry, $Z for bottled drinks and Coffee was set according to options. I decided that these accounts would be serviced three times per week and after calculating the popularity of the particular products with the majority demographic which the machines would be exposed to I was able to ascertain that with 2 hours spent per location, per visit I could expect revenue to be in the $ABC range, which would equal profit of $P after overhead of $O and revenue sharing with the location owner of $S.
I set these goals and numbers down long before I wheeled the first machine into place at one of the locations. This type of goal setting might be different than most people. They set a goal such as, "Golly I wished I was able to make a lot of money." This type of goal setting is based largely in research and planning. The above started as a goal, then I prepared a marketing and sales plan to make that goal a reality, as you can see this is, in a way, opposite of any other type of small business system.
I started by taking my vending machine abilities and looked at locations which I might be a fit for. I could have started out just placing an ad in a paper or a B2B journal and hope I got some calls but if had taken that approach I would have been out of business within a couple of weeks. I found the target businesses that I could work with within my goal setting parameters and then made the calls. I explored the possibilities how an account could be established and then visited the owners of the locations personally. I worked directly with the owners, via personal email and regular mail correspondence, then after I made a commitment to the location owner I spent some time with the employees at the location trying to get a sense of what they wanted in the machines, a great way of doing that is pending a couple of hours at the lunch period at the location with a sampler selection of your products, of course being mindful of what the target demographics has to start with,, and then paying attention to what items they took the most of and what they didn't even touch. Granted giving away product like this may seem like a loss of money, but the greatest loss of money is having a machine sitting full of product that no one will ever buy.
After I had my sales and marketing plan in place and decided on the placement of my machines, I was able to check with my contractors to arrange for the installation of the machines as soon as possible. All this was done before the first dollar was ever earned. Many of these steps are usually completed before I even get the approval of the account so that I am able to accommodate the location owner's expectations quickly.
Its important to also have an operations in place which outline what days each account will be serviced, how to handle things like service calls and what to do about refunds. You need to be able to interact with location owners on a regular schedule to keep up with changes to the demographics or to renegotiate your accounts. You must have a product acquisition plan so that you can have items to go into your machines and of course a money-handling plan. You will also need an equipment maintenance and replacement plan not only for your vending machines, but also for your automotive, office, and changer equipment) you will need to learn how to not only use software but have a plan for its updating and of course the inevitable will happen and you will need to have a replacement plan for vending machines which are irreparably damaged or destroyed.
To be successful you should also be able to put together an expansion plan, this will not only entail the acquisition of new machines but also people to help you service the accounts, as well as planning for the growth of the business to the point that you will need legal, financial and operations assistance. As your business grows you will find that what was irrelevant in the past is now crucial to the survival of your business.
If you want to succeed then you have to set goals, specific goals and be ready to back them up with detail planning and preparation. The vending machine industry in the United States alone is valued at more than 8 billion dollars. The opportunity is there but you must be able to seize it the proper way to succeed. Study, plan and work not only hard but work smart.
by: Joe Nichols
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