|  | | Home > How to Start a Vending Machine Business or Route | How to Start a Vending Machine Business or Route | Starting a Vending Business – The Basics
Considering starting a vending route business? Good decision according to a November 2007 article on forbes.com, which states that operating vending machines is one of the easiest businesses to start. If you are starting from scratch, it’s critical to do some thorough research while thinking through some basics that will eventually become the foundation of your vending route business.
Before jumping in, consider the following:
Location, location, location.
Like real estate, this adage also holds true for vending machine route success. Finding and choosing the right locations for your vending machines is critical. Obviously, high traffic locations will likely generate the most sales. But, it also may be difficult to find ones that are not already taken. Seek out new venue opportunities while carrying on with other daily activities. Are there places that generate a lot of foot traffic that are void of vending machines? Is the traffic older or younger people?
Once you find a promising location, you will need to approach a manager of the location to ask for permission to place a vending machine there. Be prepared to offer a percentage of the machine income and if the manager agrees, create a written agreement that outlines your agreement. Stick with offering a percentage of your earnings from the machine versus a flat fee since you do not know how much money your machine will generate until it is operational. You want to avoid having to give all your earnings to the location manager should your machine not perform.
Decide Type of Vending
Before investing in your first vending machines, it’s important to decide what product you want to vend, which will determine which kind of machine you will need. Depending on your location, it’s important to place machines and product that will attract the audience. For example, in areas where there are lots of young people, you may want to place machines that vend toy capsules, tattoos, Gumballs.com to find the latest merchandise available for vending machines.
Conversely, if your location attracts older individuals, you may want to have a soda and snack machine (just be sure you have access to an electrical outlet), or offer gum or candy that also appeals to an older crowd. Remember that as the machines’ owner, you are responsible for keeping them filled as well as their maintenance, which is another thing to consider. The amount of time you have to spend on your vending route may help you determine which type of machine is the best fit for you.
Start Small
Once you’ve found a few locations and determined the type of vending machines you’d like to start with, it’s time to purchase your machines and set them up. At the onset of your vending business, you may want to start with smaller machines that require a minimal upfront investment, such as gumball machines or candy machines. The maintenance on these machines is minimal provided they are checked on a regular basis. Plus, they do not require any electrical hook-up.
Just because these machines are small, they still offer great profit margins. Here’s a basic breakdown:
• Purchase one gumball machine with a stand and a case of 850 assorted one-inch gumballs for a total first-time investment of $148.00 ($118.00 for product plus $30.00 shipping from gumballs.com).
• Set your gumball machine to $0.25. Once all 850 gumballs are sold, you will make $212.50. Your initial profit is $64.50, or 44 percent for each gumball machine you own. If you set your gumball machine to $0.50, you will make $425.00 once all the gumballs are sold, which increases your profit $277.00 or 187 percent.
• As you continue, your profit margin will grow because the machines are purchased and just need the product to fill them now. If you purchase another case of 850 assorted one-inch gumballs (starting at $44.00 at gumballs.com, including shipping) and set your machine at $0.25, your profit once all the gumballs are sold increases to $168.50, or nearly 400 percent for each machine you own.
Keep in mind that these numbers will fluctuate depending on if you decide to purchase cases in bulk where you might get a discounted rate OR if you decide to sell a product that costs more. The beauty of a vending business is that you can tweak it along the way to see what works and what doesn’t, while maximizing your profits.
The above are a few pointers to help get you started. Visit gumballs.com for all your vending machine and vending supply needs. Gumballs.com offers the most competitive prices on vending machines and vending supplies including gumballs, candy, toy capsules, bouncy balls, stickers, temporary tattoos, mints and chocolate-covered espresso beans.
Here are some additional steps and tips to starting your own vending business:
1. Find a reputable supplier of commercial quality vending machines (like gumballs.com!).
2. Find locations in your area that you think would be good locations for vending machines, preferably locations with a lot of foot-traffic. The more people that come through the location, the better.
2. Approach the store/location owner, let them know you operate a vending machine business in the area, and propose to set up one of your vending machines in their store. Explain to them that, as part of your vending business service, you will completely service the vending machine and take full responsibility for it. Let them know that the vending machine takes up less than two square feet of floor space, does not need any electricity, and will provide their customers with a great service. Best of all, they will earn a percentage of the gross sales (anywhere from 15% to 33%- its up to you).
3. Set up your vending machine and start making money! Once you set up the first vending machine, find another location and start the entire process over again.
Frequently asked questions regarding the vending machine business:
How much
will my vending machine business make?
If we could accurately predict how much money your vending machine business will
earn, we would no longer be in this business--we would be on Wall
Street. What we do know is that the success of your vending business
will be dependent upon three factors: location, location, and location.
The busier the location, the better your vending machine business will do. It’s
that simple.
Do I
have to offer the store owner a percentage of my vending sales?
This depends on the approach that you take. If you approach the owner
as a vending machine business owner strictly interested in expanding your vending route,
then it would be proper to offer them a percentage of the sales. Do not
forget that offering a percentage is an incentive for the owner
to allow you the space in their business. We recommend offering anywhere
from 15% to 33%, depending on the location. Another approach that you
could take is through charity. There are many charitable organizations
that will supply you with stickers to put on your vending machines in
exchange for a nominal monthly fee, usually $1 per month, per machine.
Most store owners will allow you space in their stores for free when you
are associated with a charitable organization.
Should
I use a locating service to locate my vending machines?
We firmly believe that the best way to secure quality locations for your vending machine business is to
do it yourself. If, however, you wish to use locating services, we have
compiled a list of locating companies that you can contact and hire independently.
Click Here
to view our list of locating companies and charities.
What are
good locations for vending machines?
In our experience, certain businesses have consistently proven to be successful
locations. These include restaurants, bowling alleys, skating rinks, shopping
malls, Boys and Girls Clubs, laundromats, movie theaters, high schools,
colleges, markets, coffee shops, banks, automotive centers, taverns, and
apartment complexes. Always be on the look out for more obscure locations
that could prove to be really favorable. Some surprisingly successful
locations that we have come across include auction facilities, casinos,
bingo halls, horseback riding facilities, and airports. If you frequently
have friends and guests over to your house, you might consider putting a
small candy machine in your bathroom. Remember, any place with steady
foot traffic is a good location for a vending machine.
Do I need
a business license or insurance to operate a vending machine business?
You should consult with
your local licensing department to find out the specific rules and regulations
pertaining to the vending business in your state.
Once I place a machine, should I have the location owner sign some sort of contract?
This is up to you, but in our experience we have found that a contractual agreement is unnecessary.
Is theft and/or vandalism a big issue in the vending business?
Because bulk vending machines are typically placed in high visibility and high traffic locations where there are people or employees at all times, theft and vandalism is uncommon. If you are locating your machine in a questionable location, a simple and cost-effective solution would be to wrap a chain around the base of the machine and chain it to a fixture within the store. This simple solution would prevent any would-be thieves from attempting to steal your equipment.
How often
will I need to service my vending machine business and how long does it take to service?
Our spiral gumball machine holds up to 3300 gumballs and could go several
months without servicing. However, we recommend that you check on your
vending machines at least once a month. Servicing a vending machine business, which includes
collecting the money and refilling the machine, takes about three minutes
per machine. A vending business consisting of 100 machines could take as
little as 6 hours a week or two weekends a month to fully service.
Do I need
a truck or van to run a vending machine business?
No. Our spiral gumball machines, bulk vending machines, and triple-vend
machines easily fit within a standard vehicle. That is, of course, unless
your vehicle is a bike. Then we have a problem.
Can I
operate my vending machine business from my home?
Heck, you could operate your vending machine business out of your bedroom closet
if you really wanted to. There is absolutely no need for an expensive
office or warehouse.
Gumballs.com offers over 50 different types of gumball & candy machines!
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