Even if we get rid of the pandemic, many people are still looking for ways to get what they need without having physical contact with others.
Vending machines serve this purpose-and make money for the owners of the machines.
Owning and operating a vending machine is a big business, and it does not require any professional skills to provide passive income. It is also called automatic sales.
Basically, all you need to start is some start-up capital to buy machines, good locations and suitable products.
What to expect from the vending machine business
The revenue of the vending machine industry in 2019 was US$24.2 billion, a year-on-year increase of 3%.
The data comes from Annual survey of the industry status of vending companies — Before the full impact of COVID-19.
In 2019, 2,175,756 vending machines were put into use in multiple locations, including:
- Manufacturing field
- Retail space
- Hospitals and nursing homes
- Correctional facilities
- Military base
- Restaurants, bars and clubs
Cold drinks are the best-selling product category. Most vending machines involve food and beverage products, including soda, coffee, snacks and sweets.
There are also a large number of vending machines, such as chewing gum, stickers, toys, novelty goods and so on. During COVID-19, machines selling masks and hand sanitizer appeared.
In places such as airports, vending machines usually sell technology accessories and travel essentials, such as neck pillows, blankets, and eye masks. Laundry rooms in residential buildings are usually equipped with machines containing detergents and fabric softeners.
Due to the coronavirus pandemic, many offices, businesses and other public places are closed or restricted, and the vending industry will definitely be hit.
Scott Ausmus is the manufacturing director of National Entertainment Network, Inc. and chairman of the National Bulk Vendors Association. He grew up in the vending business. The machines he sells and manages are novel, providing stuffed animals, toys, and chewing gum. Many are in entertainment venues such as restaurants and bowling centers.
Many factors make owning a vending machine an attractive business venture.
Start-up costs are relatively low, sometimes around US$2,000. This work is flexible and usually does not require much daily participation. The risk is relatively low and there is potential for growth.
“Gumball is more profitable than anything else,” Ausmus said. “The cost of goods for chewing gum is very low, everyone likes chewing gum, so everyone still buys chewing gum, so this is a winner for many people.”
Started vending machine business
Although start-up costs are low and income is usually passive, owning a vending machine is not without risk. You must be able to understand your financial situation and the amount of investment you can afford.
Machine cost, inventory cost, inventory cost, maintenance cost, etc.
The more perishable the product and the busier the area, the more time the machine will take.
Ausmus said: “If (your machine location) has a big lounge and a lot of employees, then you have to go there once a day to fill up your machines because they are very busy. Other machines, such as toys and candies, don’t need so. More replenishment.
The first step in starting a vending machine business is to find your niche market and decide what to sell. This requires some research and understanding who your customers are.
“You have to buy the right product. If you buy the wrong product, it won’t move, you won’t make money, and you certainly don’t want to throw it away [product] Go,” Ausmus said. “You have to provide people with diversified products and find the products they want. This is the product you restock and sell. “
The vending machine business is scalable, which means it can start small and expand. You don’t have to wait for payment because the customer pays when they purchase the item.
Location, location, location
Putting yourself in the most profitable position means finding the right position.
Places with a lot of people are good, such as schools and universities, shopping malls and office parks.
Think about where people need to wait. During the waiting period, they may feel hungry or thirsty. Ausmus’s novel machine needs the company of children.
“One of the hardest things to do is to find a position,” he said.
The location can be trial and error.
“Put it in one place and find that it didn’t make enough money. This is really not a bad risk. … You can remove it and move it to the next one until you find the right place. ,” Ausmus said.
When looking for a location, be prepared to present a business plan for the machine to the owner or landlord.
- Pay a certain percentage of sales expenses or other expenses to place your machine in their place.
- Pay the electricity bill for the use of the machine.
- Ensure the safety of the machine. There is money in the machine, as well as inventory. Theft and vandalism are always possible.
- Study national and local laws and regulations.
- Pay sales tax on the income generated by the machine.
Key purchase: your vending machine
Then you will need a real vending machine. There are several types, and the price depends on the content in the machine, whether it needs cooling or heating, and the interactivity.
Buying directly from the manufacturer or supplier is an option, as is buying in the secondary market. Some companies also rent machines. Ausmus warns to ensure that the products you purchase have spare parts and support.
The price of the machine ranges from approximately US$1,500 for a used or refurbished machine to thousands of US dollars for a new high-end machine with many technical features.
Some machines have:
- Remote monitoring software: This helps to keep track of how the machine works and to notify the operator when a problem occurs.
- Low stock reminder: Notify the operator when the item needs to be replaced.
- Vending Management System (VMS): Track sales and other data to help owners make better business decisions.
Operating vending machine business
Although owning a vending machine does not require any special skills, it is a business.
You will need inventory and personnel to keep machine inventory and maintenance. This may require vans or trucks.
Compared with other items, perishable items need to be stored more frequently. Learning some basic maintenance skills can save you from having to hire people when the machine has problems.
Different types of machines have different functions. Some only accept cash, while others process credit or debit cards. Some models have touch screen or voice functions.
“Make sure you have your phone number on the machine and the store location knows your phone number,” Ausmus said. “If someone doesn’t get what they want, make sure the store can give them a refund, and then you return the refund to that store. Then go out and repair the machine as soon as possible so you can continue to make money.”
Automated sales are not for everyone, but owning and operating vending machines can be a good business. Being able to easily get back the money you earned and easily replenish the machine is the key.
Ausmus said: “Then you only work three days a month, basically for the entire performance.” “Three or four days a month can give someone a good extra income.”
Tiffani Sherman is a freelance journalist based in Florida with more than 25 years of experience writing on finance, health, tourism, and other topics.