One of the things that make the vending machine business so attractive is the very same thing that makes hard. It’s a business with a low barrier of entry which basically means anyone with $100 and a dream can start a vending business. This in turn means lots of competition. Does this mean you can’t compete and make a living at it? No, but it does mean you’ll have to work smarter and harder than your competition.

Vending is not a get rich quick scheme. You can make a decent living by growing your vending machine business slowly over several years or investing a large amount of money upfront to get started, but whichever route you choose it will not be easy. This does not mean it can’t be done, but I warn you to have realistic goals and not believe the hype that some people are selling. I’ll cover more of the hype in the biz op section of this website but suffice it to say that if it sounds too good to be true, then it probably is.

The vending machine business allows you to be your own boss, set your own hours, and schedule your day however you like. This can be a blessing or a curse depending on your temperament and abilities. Not everyone is cut out to be their own boss. Some people are lazy, some are disorganized, and some don’t play well with others, only you can judge for yourself whether you have the personality traits that are suited to an entrepreneurial endeavor. At the very least, you will need to have good time management skills, be self motivated, have general book keeping skills, and some limited people skills. If you have this and a dash of common sense, don’t let me talk you out of anything. But if you don’t see yourself in this description, proceed at your own peril.

With vending machines, your machines are always working even when you’re not. This is generally considered a passive income stream and is one avenue to building long term wealth and security.  At some point in the future you may want to hire someone to service your machines and this is an option that can further increase your revenue streams.

Vending is a numbers game; this is very true in bulk vending, but less so in full service vending. By this I mean you will need a lot of bulk vending machines to make any decent money. What’s a lot of bulk vending machines and what is decent money? Consider that an average bulk vending machine makes $7. per month per head, so a triple machine is expected to make $21 per month. Mind you, this is gross not net. Add in anywhere from 20%-35% cost of goods and you get a general ball park. And this is given as an industry standard for bulk, not everyone will achieve this goal. My experience is that $5. per head is more likely.

I’ve about covered the basics on the pros and cons of the vending machine business. I’ll be adding more topics and information as I develop this website. I’ll be covering biz op scams, full line vs. bulk, how to buy an established route, and whether to go with new or used equipment. Plus anything else I think might be helpful.

If you’re thinking of starting up your own vending business, make to read the articles on buying used vending machines, buying an existing vending route, coffee vending, coin operated machines and getting your vending machines on location.

A vending business is an excellent option for people who are looking for a small home based business. A vending business can be started quite easily with a minimum of hassle; there are no franchise fees, no need to rent a property and no need to hire an employee. In fact, it’s so easy that some people even get their children involved or even set up a route specifically for their kid to run. It’s a great way to teach kids about responsibility, finances and the fun of being entrepreneurial.

The vending business is comprised primarily of bulk vending and full line vending.

Bulk Vending

Bulk vending is selling unwrapped “bulk” candy out of machines. Some of the more popular candies that are sold out of bulk machines are: peanut M&Ms, regular M&Ms, Mike & Ikes, Hot Tamales, peanuts, trail mix, Reese’s Pieces, gumballs and Skittles. Small children’s toys such as temporary tattoos, jewelry and key rings are also considered a part of bulk vending.

Typically the vending machines used in bulk vending are comprised of heads or separate compartments for each different type of product. Bulk machines are usually mechanically simple; they usually don’t have electric features such as bill/change acceptors or refrigeration. These coin operated machines are designed with a simple spring mechanism that returns to its original position once a coin is inserted and the product is dispensed.

Pros

• Machines are inexpensive
• Machines are easy to work on
• No special skills are needed
• You don’t need any special equipment like a new vehicle
• You get to be your own boss
• You have the freedom to set your own schedule
• Machines can be moved by one person

Cons

• Fully loaded machines are heavy
• Good locations are hard to find
• You need a lot of locations (400+) in order to make a decent living
• It takes a long time to get a route established
• There is a lot of competition
• Some people consider vending a less desirable or respectable job
• The machines get broken and stolen

Full Line Vending

This part of the vending business is the selling of packaged goods out of machines with packaged snacks and soda being the largest portion of this business. Other items such as cigarettes, condoms, feminine hygiene products, ATMS, and Redbox movie vending are all variations of full line vending.

The machines used in full line vending are more sophisticated than those used in bulk vending, plus they are a lot larger. These machines commonly require refrigeration and they also have electronic bill changers so electricity is usually required. There are some simple full line machines such as those used in laundry mats or bathrooms that use a simple pull dispenser, but most full line machines are more advanced.

Pros

• Although the machines aren’t as cheap as bulk machines, they are still cheaper than starting a lot of other more traditional small businesses
• You get to be your own boss
• You get to set your own schedule
• You need a lot less locations than with bulk to make a decent living
• Less competitive than bulk

Cons

• The machines are very heavy
• In order to move these machines you will most likely have to hire someone, have someone help you or be very strong and have a truck with a lift gate
• Even though it’s less competitive than bulk, it’s still hard to get excellent locations
• Machines are complicated; it would definitely be beneficial to know how to do electrical work and refrigeration
• The machines have to be serviced more often than bulk machines

Conclusion

Some people like the flexibility of moving machines on their own, while others prefer not having to service so many different locations. There are pros and cons to both sides of the vending business, so which side of the vending machine business you pursue is simply a personal choice.

Like most everyone starting out, I read everything I could about vending before starting out. I joined a chat group and found a lot of excellent free information available by reading about other people’s experiences in vending, but eventually you have to learn some things the hard way. Or maybe not the hard way, but by learning from your own experiences.

Why Triple Head Aren’t the Best Choice

So, now that I’ve been in business for a couple of years I can say unequivocally that double headed machines are the way I’m taking my route. Initially I started with triples, the kind that sells 3 different products but has one lid on top. I quickly found out that triples are too big for a lot of locations, it sounded like a good idea when I was starting out. As a newbie I thought more selections equaled more money, but it actually worked out to be just the opposite. I ended up having a lot of unnecessary product waste. That’s not to say some locations can’t handle a triple, but a location would need to be very busy to make a triple worthwhile. I see some of my locations that have the 6 or 8 U Turns and this is just amazing to me. If my triple has candy going bad, I have to assume that they are either serving up stale bad product or having a lot of product waste. Another problem with this type of vending machine is that they offer you no flexibility.

Why Double Heads Are the Way to Go

So why am I moving to the doubles? A couple reasons. One, I think they make the product look better, the product can be seen 360 degrees while in the triple it can only be seen from the front. I recently traded out a couple of my triples for doubles and my sales doubled, when my profits double, I immediately start wondering why. One of these locations did have a rundown triple so this may have kept sales down, so I’m not sure if this can be 100% attributed to the double machines, but it’s something I’m going to be toying with in the future.

Another great thing about these machines is that they can be configured into any type of machine you need. You can put up to 3 separate heads on a single stand, make racks, or use them as singles or doubles.

My Comparison of Northwestern 60s and Oaks

So far I’ve tried both the Northwestern 60 and the Oaks. I bought the Northwestern 60s new from Sam’s Club; currently they’re going for $61.02 a head. Once you add in two heads, a stand and the plate, a double head costs about $170 from Sam’s. If you shop around you can find plates and stands cheaper, so you can knock about $20 off of this price.

I bought my Oaks used off of Craig’s list for $50 each double head. Each machine was also fully assembled, so this saved me a lot of additional work.

Well, these two brands are considered among the best in the business, so either one is an excellent choice, but I guess I like the Northwestern 60s the best. For one thing the Northwestern is a great looking machine, the paint is glossier and the front is beveled silver so that it really pops, but without a doubt the best thing about these machines is how easy they are to service. Honestly it’s like other machine designers never actually put any thought at all into how the machine will actually be serviced. With the Northwestern, you pick up the head; twist it a couple degrees and it easily rests on the base allowing you to easily scoop out the coins. The Oak is a fine looking machines and definitely of excellent quality but the servicing is a nightmare. You have to juggle the head in one hand while you try to dig the coins out or you have to remove the head entirely to get to the cash. The one thing I do prefer in the Oak over the Northwestern is that the Oak has a smaller head; this allows me to fill it up more so that it looks better but still keeps the profit loss to a minimum.

Obviously at $50 a head I’d by a couple hundred more of the Oak, but I’ll keep shopping around for the cheapest used vending machines I can find. The Northwestern is well worth the money and since I’m in the vending machine business for the long haul, I don’t mind making the investment.

When it comes to the vending machine business, the hardest part of the business is getting good locations. Obviously when you’re growing and expanding your route this requires a lot of initial placement work, to a certain extent once you have a fully established route, your need to find good locations tapers off, but it never truly ends. Even well established routes will need about 5% of their locations be replaced every year, so a decent sized route of 500 bulk machines will require about 25 new locations a year. It’s a never ending process.

Using a Telemarketing Locator

There are a few things you can do to help with the locating process. Since I’m working part time, I work with a telemarketing locator. My locator charges $40 – $60 per location depending on the size of the machine. The tricky part of using a locator is finding one you can trust and who won’t rob you blind. Unfortunately locators are one area of vending that is rife with problems; there are a couple good ones, but a lot more bad ones. The best way to find a reliable locator is to use one that comes recommended by other venders, so a good place to start looking is on vending chat boards. This is no guarantee but at least it gives you a reasonable place to start shopping around. What I recommend is that you only pay for 1 or 2 locations at a time, this keeps the locator hoping to get more business from you, plus if you do get ripped off, at least it won’t be too painful. I hate to take this tone, but this is the reality when it comes to using a locator. Some locators ask to be paid up front, so this is not necessarily indicative of a scam. Some have earnings guarantees, discounted replacements and free replacements if you get bounced out before 60 days. Some locators also give you the right to refuse locations right away if you don’t like the location. Locators can locate all different types of machines including: bulk machines, energy vending machines, full line machines, amusement machines, coffee vending machines and virtually all other types of coin operated machines.

The Perils of Hiring an In Person Locator

I’ve never worked with an in person locator, but they do exist. I’m very hesitant to recommend using one because these businesses and individuals are even sketchier than telemarketing locators. Proceed with caution.

How to Affiliate With a Non-Profit

One thing you can do that will increase your odds of getting a location is to affiliate with a non-profit, this is true if you work with a locator or place the machines on your own. Some non-profits already have established vending programs, but you could work with a local non-profit and set up a deal of your own. These programs are a win-win for both the vender and the non-profit. Most programs charge the vender $1 per machine per month for the right to place the non-profits sticker on their machines. This helps the non-profits make money and it also makes it easier for venders to get their machines on location. Business owners are a lot more receptive to vending machines if it helps a charity.

Placing Machines Yourself with Telemarketing or In Person

When it comes to placing vending machines on your own, you can either do telemarketing or in person locating. Telemarketing is easier because you don’t have to drive around town lugging a machine with you, but the success rate is low. In person placement gives the business owner an opportunity to see you and your machine, plus it’s harder to turn someone down in person than on the phone, but the placement rate is still low, only about 10%. So, to place 100 machines, expect to visit over 1000 businesses.

Affiliating With a Local Non-Profit

One thing you could try is to find a local organization you want to support and affiliate with them, for example, a local scout group or junior high band. You could pay the kids per location plus $1 per machine per month. If you had a route of 500 machines, this would be $500 a month. I’m sure a lot of non-profits would love to have an extra $500 a month for their group.

Hire Someone You Know

With so many people currently out of work or needing extra money, I’m sure you might be able to hire someone you know and pay them a set amount per location; kids are particularly hard for business owners to turn down. If you’re going to pay a locator $50 per location why not pay someone you know. No matter what method you use, you better be prepared for the never ending cycle of getting vending machine placements.

There’s almost an unlimited variety of coin operated vending machines available in the market today. The first historical evidence of a coin operated machine is found in works of a 1^st century engineer and mathematician called Hero of Alexandria, but it’s not until the Industrial Age that they really came into wide spread use. During the early 1880s coin operated machines were introduced in London England to sell post cards. In the United States, the first vending machines sold gum in train stations, these machines were manufactured by Thomas Adams Gum Company. These machines eventually started becoming more advanced in 1897 when small moving figures were added to the machines, these figures would move around when gum was dispensed from the machines; this advance was made by the Pulver Manufacturing Company. These early advances spawned pinball machines and slot machines.  

The first coin operated machine was made to dispense holy water, but today’s machines can vend almost anything. The potential in vending is almost unlimited. Vending in the United States in broadly divided between two main types of vending; bulk vending and full line vending. Bulk vending is selling loose candy, nuts, toys and gum in small coin operated machines consisting of single or multiple heads. These heads can be arranged in a multitude of configuration on stands or what is referred to as racks. Racks are able to hold a large number of multiple heads, while stands usually only hold 1 – 3 heads. Full line vending is selling packaged snacks and drinks such as candy bars, soda, and chips. Full line machines are also coin operated machines but they are a lot more sophisticated, they can have refrigeration, bill changers, lighted panels, and fancy electronics. Full line machines are a lot larger than bulk vending machines. Coin operated machines are typically run as a route by small operators or individuals who will usually have machines in several different locations. 

Japan has a lot more variety in the coin operated machines than we currently have in the United States. Vending machines are prolific throughout Japan, in large cities they can be found on every corner. Not only do they have a lot more machines, but it seems that consumers in Japan are willing to buy almost anything out of a machines. Some of the strange offerings out of Japan include coin operated machines selling umbrellas, electronics, fresh flowers, eggs, porn, electronic charging stations, vegetables, bags of rice, hot ramen noodles, shoes, French fries and fried prawns.

Here in the US we’re beginning to see more and more products being sold out of machines but we have a long way to go before we’ll even come close to matching Japan. We have all the standard offerings of snacks, condoms, ATMs, feminine hygiene products, gumballs. Cigarettes were one of the most commonly vended products but concerns about underage buyers has caused this to dramatically slow down. The Stand Hotels, a small upscale hotel chain, has recently introduced coin operated machines selling Quicksilver board shorts and bikinis to guests. IPod vending machines are making the rounds at hotels, airports and Macy’s Department Stores. These newer machines are a big step away from traditional coin operated machines that typically vend inexpensive items. It will be interesting to see how readily consumers take to machines that vend electronic devices with prices that can exceed $300.00. I’m sure these machines take credit cards as well as debit cards but I’m wondering how the return policy or customer service issues are handled. Clearly this is only a small hindrance, because these machines are really starting to take off.

Although I think coin operated machines selling candy to kids will always be around, the US will gradually begin to see a rise in machines selling a greater variety of products at an ever increasing price point. Eventually US consumers will become more comfortable with machines selling high end merchandise. Truly the potential of vending is almost unlimited.

Read all about the various aspects of the vending machine business, check out the articles on Getting Your Vending Machines on Location, Single, Double, Triple – What Is the Best Machine?

I should probably start with a general definition for people that are entirely new to vending. Full line vending consists of generally larger machines which vend a variety of products including soda, snacks, sandwiches, condoms, and cigarettes. This is by no means a full list as I could probably fill a sheet with things that could be considered full line vending.
 
Bulk vending machines are usually much smaller machines consisting of one, two, or three “heads” or compartments for loose (“bulk”) candy.
This includes gumballs, M&M’s, peanuts and even capsules containing tattoos, key rings, and other such kid toys.

For the sake of this article I’m not including vending amusements which are crane machines, fortune teller machines, and kid’s rides like those found outside of big box stores. It’s been my experience that most people don’t specialize in vending amusements but rather roll it into their primary vending business.

Now that we know what we’re discussing here’s a general overview.

Full Line Pros: Since the machines are more expensive, there is a little less competition. You can have a lot less locations and machines for the same amount of profit.

Full Line Cons: With full line vending the machines are much (MUCH) heavier and more difficult to transport. They usually require electricity to operate so that may limit where you can put the machine. The machines are big so it’s a little bit more of a commitment to get one placed. If a manager OK’s a placement and then the owner comes in the next day and overrides his decision you are not going to be happy. More full line vending companies have placement contracts then do bulk vendors; this contract usually covers what percentage of your profits you give to the business owner. Full line machines are more expensive so starting out is going to cost more. Full line machines typically need to be serviced more frequently, once a week or every other week depending on volume. Since the machines are both mechanical and electrical they are more difficult to repair.

Bulk Vending Pros:  Compared to the full line machines, the bulk machines are virtually light weight, plus they can fit in a car. No electricity is needed for most bulk machines. (There are some exceptions to the electricity rule such as the really fancy lighted, spiral maze gumball machines that you may have seen around.) The equipment is cheap and easy to repair. The machines are small and can be placed virtually anywhere. It’s less of a “perceived risk” or “commitment” to the business owner to place a very small machine rather than a bigger one. The machines need to be serviced a lot less than full line machines. A typical cycle for servicing is 30 – 90 days, mine are on 45 – 60 day cycles.

Full Line Cons: Because the equipment is cheaper you will have much more competition. To make a decent living you need LOTS of machines. Although the machines are light compared to full line vending, they are not exactly light, about 60 lbs. when full of candy. Spend a day moving and placing these all day and you’ll feel it.  Machines can be very easily stolen.

As I read this, it seems I listed quite a few more cons for full line vending than bulk vending. Although this was not my intent, perhaps I am biased as I chose to do bulk vending myself. My own personal reasons for choosing bulk were primarily based on transporting the machines and not feeling like I have the ability required to work on the machines. If you choose to go with the full line vending, it’s a valid choice just not one that I thought was right for me. And also there is no hard and fast rule that says you can’t do both full line and bulk candy. It does seem that people tend to specialize in one or the other, but you can pretty much do what you want, as it is your business.

Coffee has never been more popular than it is today; there is literally a Starbucks on every corner. Perhaps the most remarkable thing about the coffee business is how its popularity has spread to less traditional markets such as fast food restaurants, gas stations and donut shops. Even these less traditional markets have begun to see the popularity and financial popularity of coffee. McDonalds has even rolled out their “designer” coffee drinks, the Frappe, it’s available in 3 sizes and two flavors – mocha and caramel. Plus McDonalds is also selling a regular iced coffee. I’m not sure if these coffee offering are only available for the summer or a permanent addition to the menu, but clearly if McDonalds is embarrassing the product, it’s safe to say that designer coffee has gone main stream.

There are a lot of potential markets that could be well served by coffee vending, malls, office buildings, hospitals and ice hockey rinks. I’m sure that when most people think about coffee vending, they think of the nasty horrible coffee usually associated with late night hospital visits, but this is no longer the case, coffee vending has come a long way. Not only are these coffee vending machines capable of vending an excellent cup of coffee but they capable of grinding beans and steaming milk.

Today’s coffee vending machines are stocked with premium beans and first rate quality products. They can dispense traditional plain coffee as well as upscale drinks such as cappuccinos, espressos, lattes, hot chocolate, chai tea, and mochaccinos. No doubt, you would be surprised at the variety and quality of coffee products that are available.

Coffee consumption is definitely on the rise the United States, over 70% of adults in the US drink coffee and the vast majority drinks about 2-3 cups a day. The average cost of a premium drink is over $3 and over 8 billion dollars are spent on premium coffee drinks every year. Although Starbucks has closed down several locations to consolidate their market due to the downturn in the economy, coffee consumption shows no signs of slowing down; it’s just moved to more mainstream and convenient locations.

From a vending perspective, one of the best things about coffee vending is that coffee drinks have a very high profit markup; sometimes it may be even be higher than 70%. So, if you’re looking for an interesting addition to expand your vending business and capitalize on the coffee trend, then coffee vending may be an excellent addition to your fleet.

OK, in order to not become vending road kill, don’t believe anything the seller is telling you. Sure the vending machine route is making $40 per machine per location. Sure the seller is just looking to unload what may be the most profitable vending route ever in the history of vending. Of course, when you actually ask to see IRS tax filings proving their legitimacy, they won’t be able to provide it. Don’t believe any spread sheets or book keeping forms they may offer to provide, these can all be faked. This isn’t meant to imply that they are trying to rip you off or that they are lying but consider that they are selling an asset and trying to get the best price possible. You, as the buyer, are also trying to get the best price possible and more likely than not, the seller is overpricing the vending machine route.

How then can you determine what the route is worth? The single only way to determine a route value from a buyer’s point of view is to only place a value on the used vending machines being sold. Yes, the locations do have value, the good will of the business has value, and the age of the vending accounts also have value, but not for our buying purposes. We are essentially buying a business with unknown variables. We don’t know what the machines are actually making. We don’t know if the businesses where the used vending machines are located are happy with the prior vendor (the seller). We don’t know anything about this business except how many machines are being sold and this should be checked and verified. It is possible for a thoroughly unscrupulous person to sell someone else’s machines but usually these will be stolen from a location and not still in place.

When making an offer on the vending route, ask the seller if you can go on a servicing run with him to check out the state of the used vending machines. If a route is very large, you would most likely just do a head check to see that the machines exist. But it is best to watch the seller service a few machines to see how the business owners react to him and gauge the value of the locations. Even though we are not placing any value on the locations for our buying decision making, the locations can give you an overall feel for how much future work will be required to turn this route into a money maker for you.

Another thing to keep in mind when making an offer to buy is how many different brands of machines are on the route and what kind of quality are they. When building a route, obviously you want to grow fast and keep your expenses low and used machines are a great way to do just that. But once your vending machine business starts to become rather large, a variety of brands can become a liability. You will have less compatibility of parts for when things break down and buying replacement parts sometimes isn’t worth the money. With vending heads going for about $60.00 brand new, a new coin mechanism for $25.00 doesn’t seem practical. And believe me when I say,  used vending machines are going to break down. Another small thing to consider with multiple machines is the sheer volume of keys you will have to keep track of and organize. This may seem like a small consideration, but think about having separate keys for the top and sometimes separate keys for the back and multiply that by twenty. When you’re trying to zip through your route, organizing your keys is just one more thing to slow you down.

Lots of great deals are to be had on vending machine business routes. Craig’s List is a great source for both routes and used vending machines. Like I covered in the biz ops and scams section, lots of people get ripped off early in their vending careers and never fully recover. If you shop wisely, you may find vending gold. There are people who have bought neglected vending routes and upon servicing the route the first time have made the buying price back essentially making the purchase free. While I hope you have the good fortune to find such a deal, even if just heed my advice to only consider the value of the machines in the route being sold, you will avoid getting ripped off.

History of the Vending Machine

The vending machine has been around for hundreds of years but it wasn’t until the 1880s that they came into widespread use. According to historical accounts the first vending machine was written about in works by Hero of Alexandria and was used to dispense holy water, it used a simple weighted mechanism that reset after each use. Amazingly, Hero designed his machine during the first-century but it wasn’t until the Industrial Age that vending machines came into more widespread usage. Two of the first “modern” commercial uses were selling post cards in the early 1880s in London and gum in train stations in the US. The Pulver Manufacturing Company essentially revolutionized vending in 1897 when they came up with the idea of adding moving figures to the machines to further entice customers to spend their coins; these automated machines eventually lead to the development of slot machines and pinball machines.

Modern Vending Machine Usage

Today the modern vending machine is capable of vending almost anything. In the US, the vending market is broken down broadly into 2 main categories: bulk vending and full line vending.

Bulk Vending Machine

The modern day bulk vending machine is not that far removed from the vending machines developed hundreds of years ago. These machines sell “bulk” products; this simply means loose candy or toys that are typically loose and unwrapped. Some of the more popular bulk products that are sold include nuts, M&Ms, Mike and Ikes, Hot Tamales, gumballs, and small toys like tattoos, key rings and jewelry.

Bulk vending machines are usually mechanically simple; they work with a spring type mechanism. A coin is inserted and the handle turned, the coin drops into the machine, product drops out a shoot and the handle springs back into its original position so that it can be used again. Most of these machines are made up of individual heads on separate stands or racks allowing the route owner to stock several different types of product at the same time.

Some of these bulk machines are more sophisticated with flashing lights and moveable parts that activate when a coin is dropped, but most are simple and require no electricity or refrigeration.

Full Line Vending Machine

These machines are usually much bigger than bulk machines and usually require electricity and sometimes refrigeration. The term full line indicates the selling of packaged chips, crackers, candy bars, soda, water and other packaged items for resale. These machines are becoming increasingly more sophisticated with bill changers, credit card accepters and temperature controls.

Although these are the two most common categories, vending is becoming increasing more advanced. 

Other Types of Vending

Amusement Vending

This category of vending includes children’s rides like those found outside major retailers, pinball machines, video games, crane machines and other game type machines.

Miscellaneous

There are other categories of vending machines that don’t clearly fall into either of these broader categories, but they are usually categorized under full line vending. Products that can be vended out of a vending machine that fall in this miscellaneous category include condoms, laundry detergent, cigarettes, electronics and buss tickets.

Unusual Japanese Vending Machine Offerings

Japan is a lot more advanced with their vending machine products. Not only are machines located on virtually every corner, but the products they vend are a lot more usual that the typical offerings in the US.

Here are some of the things currently being vended in Japan:

• Porn
• Alcohol
• Used school girl panties (these were made illegal, but apparently can still be found)
• Umbrellas
• Hot ramen noodles
• Bags of rice
• Charging stations for electronic devices
• Shoes
• Deep fried prawns
• Fresh flowers
• Eggs
• Fresh vegetables

Future of the Vending Machine

At this point the only thing holding the vending business back is public acceptance and imagination. In 2009 a small boutique hotel chain in the US, The Standard Hotel, partnered with surf wear company Quicksilver to sell retro swimwear to their hotel guests, the vending machine is selling board shorts and bikinis for about $75 apiece. The suits being vended are retro designs from the 1970s and 1980s but with more modern fits and fabrics. When vending goes this mainstream and this hip, you can easily see the long term potential of the vending machine.

Some of the newer vending machine offerings include machines selling iPods, cell phones and electronic devices. Machines selling ballet flat slippers have popped up recently in night clubs allowing women to get out of their high heels after a night of dancing. Vending machines have come a long way from when they were first introduced, but not much has changed really. The vending machine offers the customer cheap products in convenient locations while allowing the vending machine owner to vend products while keeping overhead low by not having to have a store front or employees.

A lot of people are sucked in by these business opportunities or biz ops as they’re called. The pitch goes something like, “For only $15,000 we’ll provide you with 50 machines with locations, product and unlimited support from our team. You’ll make $100 a month per machine and you’ll be able to turn a profit immediately and quit your day job.”

Well, don’t quit your day job. This is a total con job. So many people get sucked in by these people and then end up getting disgusted and frustrated by the whole vending business. The vending business is not a scam but it’s hard to see straight when you now have 50 machines making only $5. a month. At that rate, it will take 5 years just to pay off the $15,000. Most people just quit at this point and figure the whole vending machine business is a waste of time.

These vending biz ops take many forms, the latest being the energy vending craze. Basically anything that requires a huge amount of cash upfront is a scam – don’t do it! Another thing to be weary of is machines that are targeted to only one product. If you have a machine that can only sell one product, what if that niche doesn’t work out for you, then you have 50 machines that are worthless. Any “package” that requires you to commit to a large number of machines is not legit. If it was, they would sell you only one machine and you could test it out. Also, most times you have to buy your product from this company, again not a good idea.

If you do get taken in by one of these operations, you have some tough choices to make. You can continue on with the machines and products you have and plug away at the $15,000 or you can bail out. So many people get so upset at this point that they do just quit. But another option you could take is to continue on with the biz opp all the while adding on more economical machines to expand your business.

Just remember, if it’s too good to be true it probably isn’t true. Do your research, get your information from a variety of sources, and take your time making any decision.

With a vending machine business easy to begin and operate, it is referred to as having a low barrier to entry. This translates into the fact that anyone can start a vending business. Tons of people with a few spare bucks get into vending every year. The lower the barrier to get into a field the more competition you will have to compete against. I’m not saying that you can’t make it in vending, just that you will have to be that more dedicated than the next guy.

Vending machine business opportunities (biz ops) are to be avoided. A big biz op scam these days seems to be energy pills or gel. There are many others out there, but energy seems very popular recently. For the dear price of about $15,000, a biz op will get you equipment, get you in businesses and offer to help you with your whole start up. Biz ops make grossly exaggerated profit claims. Vending is numbers game. In vending, it is all about the numbers – tons of machines churning out a small monthly profit to get ahead. After losing lots of money to a biz op scam, some become disillusioned and quit the business. Tons of unused machines are sold by these frustrated people.

If you have been duped by a biz op, your options are few, you can complain through the Justice Dept., the BBB, or get an attorney. That money will more than likely never be seen again. It’s good to be informed when starting any business. The people that are pushing biz ops and promoting vending as a way to make easy money are not to be trusted.

When starting out in bulk vending or full line vending, have a workable business plan before you quit your job. It is not my intention to deter you from the vending biz, but instead, I am hoping to give you information that will help you on your business path. Most single heads make seven bucks on average. This is an industry average, not a guarantee. Venders don’t always make seven dollars. Personally, my machines are averaging five dollars per head. As you can see, a double head machine making $14.00 per month is going to require a lot of machines to pay your mortgage.

Please be alert to the possibility of locator problems. Locators help you by making lots of phone calls to zip codes you provide to help you get your machines placed faster. Sometimes you can hire a person to drive around and place machines. To get a machine placed by a locator using a phone is about fifty bucks. I have no experience with an in person locator personally, but it is about the same price. To expand your business more efficiently, a locator can be a real asset. Locators vary in their placement options. Some promise a certain amount per machine, some do not. Despite what you may hear, excellent locators can be found, the problem is finding one. A good way to find a locator service is on forums that are dedicated to the vending business. Other people in the business can help you avoid getting ripped off by unreliable locators.

The vending machine business is not a get rich quick plan. Vending requires a lot of time and commitment to be successful just like every other business. A lot of folks that start vending business will fail, but this doesn’t mean vending isn’t a viable business. Too many people are really not up to the challenge of managing their own business. With vending, you can start without a lot of cash. All you have to do is get a couple vending machines located, service them for a short time and you’ll have a good indication of how things work. One of the great things about vending is that you can do it at your own pace while keeping your day job. A plan to grow your vending machine business, based on your experience will be infinitely better than the impossibly dreamy goals others may give as their results.

The vending business is broken down into two main categories: bulk vending and full line vending. Both types of vending are usually pursued as small home based businesses and they are usually run by individuals. Some people may have a partner or run a vending route as a family business, but with bulk and full line vending; usually these are small businesses and not corporate run operations. There are a wide range of vending machines available, but generally anything that doesn’t qualify as bulk is classified as full line. Some types of vending machines that are more typically run by corporations include ATMs and Red Box movie vending.

The main beauty of the vending business is that it is one of the few businesses that is within the reach of most people. Most business start ups require a large initial investment and require the new business owner to fully commit their time and energy to the new business in order to get it off the ground. This type of commitment usually creates a substantial risk because not only does it require investing a lot of money, but you will usually need to give up your job in order to start your own business. This is not the case with running a vending business, the machines are fairly inexpensive and it’s easy to start a route part time while still keeping your day job.

Bulk Vending

Bulk vending is the selling of “bulk” products out of machines to consumers. The term “bulk” simply means the products aren’t wrapped; the customer just gets a handful of product delivered right into their hand. Bulk products include M&Ms, Mike&Ikes, nuts, trail mix, gumballs, Hot Tamales, Reeses Pieces, and Skittles. Also included in bulk vending is small children’s toys such as temporary tattoos, jewelry, key chains and other small novelties.

The vending machines used in bulk vending are very mechanically simple machines with a simple spring back mechanism. Most of these vending machines don’t require electricity and are easy to work on.

Pros

• The machines are very inexpensive. Brand new they cost only $125 – $300 depending on the amount of heads.
• Simple machines.
• Easy to get started.
• You can start part time.
• It takes very little money to start a small route.
• No big vehicle needed.
• Machines can be broken down for transporting.

Cons

• It’s a very competitive business.
• It’s hard to find profitable locations.
• When fully loaded, the machines can be heavy.
• You need a lot of machines in order to make a full time income. Each machine only averages $7 a head.
• Most people never get to the point where they make decent money. The failure rate is high.
• Establishing a large route takes time and money, so if this is your goal, you may need to stay at your job for quite awhile while you do vending part time.
• Some people consider vending demeaning or trivial work.

Full Line Vending

Full line vending is the selling of packaged snacks and drinks out of vending machines, products include chips, crackers, candy bars, soda, ice tea and water. There are other categories of bulk vending such as feminine hygiene products, cigarettes and laundry products, but snack and drink vending is the biggest part of full line vending.

The vending machines used in full line vending are usually much more complicated than those used in bulk vending, they usually require electricity, and some also have bill changers and refrigeration.

Pros

• Compared to other businesses, it’s still fairly inexpensive to get started. You may be able to find decent used vending machines for $1,000 – $2,000, while brand new ones are much more expensive.
• Full line vending machines make more per location than bulk locations.
• Compared to bulk vending, you will need less machines and locations in order to make a full time income.
• Servicing is easier because you will have fewer locations.
• A full line route can be run part time while keeping your full time job.

Cons

• The machines are very large and heavy; most people will require help moving them.
• Although it’s less competitive than bulk vending, it’s still very competitive.
• Since the machines require electricity, plus some have bill changers and refrigeration, this makes them harder to work on.
• It’s hard to get profitable locations.

Without a doubt the best place to buy used vending machines is online. Craig’s List is the best place to go, but if you shop around you may be able to find some good deals on eBay. The main problem with eBay is the shipping costs, even if you manage to find a good deal, a lot of time the shipping costs eat up any savings. Although I still look in my local paper for used vending machines, this no longer the best option.

When it comes to buying used vending machines or an already established route, there are a few things you need to keep in mind. I see people selling used vending machines online all the time for outrageously high prices. A lot of these sellers are trying to take advantage of people who are new to the business or people who are over excited and naïve. Unless you can get these machines for at least half off the market price, I would say pass on the deal and bide your time.

Buying Used Vending Machines for a Bulk Vending Route

One thing that I quickly discovered when I started buying used vending machines is that it’s always a good idea to buy groups of machines that are all from the same manufacturer and keyed the same. When I was new, I bought a couple lots of mixed machines and this ended up being a bit of a nightmare. Not only did I end up with way too many keys, but now I also had a bunch of machines that didn’t have interchangeable parts. I can’t overstress how important it is to have a route consisting of machines from only 2 – 3 different manufacturers. One of the odd things about bulk vending machines is that the replacement parts are so expensive that it is usually more practical to buy a new machine than it is to buy a couple new coin mechanisms and a replacement Plexiglas face plate. This is why it’s a good idea to not to buy small mixed lots, try to buy as large a lot as you can afford and lots with only one type of machine.

Buying an Already Established Bulk or Full Line Route

Regardless of whether you are looking to buy an established bulk vending route or an established full line vending route, you need to proceed with caution. Until you have been in vending for awhile, it’s easy to over pay or get ripped off in these transactions. When it comes to valuing a vending route, the main thing to keep in mind is to only place a value on the used vending machines. From the buyer’s perspective, the locations have absolutely no potential value. This is not to say that the locations don’t have any value, because clearly they do, but we have no clear cut way to value them, so for our purposes we disregard them.
People trying to sell an established route will make all sorts of income claims, but the vast majority of them will not be able to verify these earnings. Since vending is a cash business, a lot of people don’t keep accurate records or don’t report the income that they earn, so good luck verifying income. Of course these sellers want you to believe what they say, but unless they can provide tax returns or other reliable proof of earning, then view everything they say with a healthy dose of skepticism.

Summary

The key to buying an established route or used vending machines is to wait for the desperate seller. Don’t just jump on the first good deal that comes your way; wait for deal with rock bottom prices. Believe it or not, there are a lot of these desperate sellers out there, sellers who are just looking to unload their route or used vending machines dirt cheap to the first cash buyer who shows up at their door.