How to make your vending machine business profitable
More and more savvy entrepreneurs are investing in vending machines as a way to supplement their income or, in some cases, earn their entire living from them. After all, this is a cash business with almost no overheads or staff issues. As with any business, there are some golden rules to consider before starting a profitable vending machine business – we’ve simplified things and narrowed it down to our top 7 tips:
1. Buy second-hand
Second-hand vending machines can sometimes be snapped up for a song. Whether you regularly attend auctions or browse Gumtree, you’re bound to pick up a bargain. Buying a used (and, hopefully, previously loved) unit, makes financial sense because a brand-new one depreciates in value the minute you turn on the plug for the first time. Obviously, you’ll need to check that the machine is fully operational, and that any faults are easily repaired and reflected in the price.
2. Find the right location
This one is pretty obvious, but needs to be included because the success of a vending machine venture hinges on the placement of the unit. Make sure that the machine is not only situated in a safe and appropriate building or area, but that it is displayed prominently within the building itself. You don’t want it hidden behind a large pot plant or shoved in a corridor that doesn’t see much foot traffic.
3. Maintenance is key
A dirty, ugly vending machine or, worse, one that sucks up coins and gives your customer nothing in return will make almost everybody turn tail. Nobody wants to put money in a machine that is grimy, rusty, scratched or faulty. Make sure that your machines are all close by enough for you or a hired hand to check on it on a regular basis. Give it some TLC and it’ll be nice to you.
4. Keep stock
Another obvious one – it makes sense that your vending machines are always well-stocked. A half-empty machine lacks class somehow and often turns potential buyers away. At the same time, watch that edible items have not passed their sell-by date. Paying good money for stale peanuts won’t get peckish customers flooding back to your machine.
It’s widely known that products nestling inside most vending machines are exorbitantly priced. Give your customers a break: mark your products at reasonable prices, and watch your stock fly down those chutes. Especially when times are tough, your customers will appreciate the fact that they can buy a cola that isn’t twice the price of those on grocery store shelves.
6. Stay on target
Just as important as the location of your machines is knowing who your customers are and what they want. Do some research before you match your product to your location. Think about what type of person walks past the vending machine several times a day. Students? Businessmen? Gym bunnies? Establish whether your product range suits a target market renowned for impulse buying or one that will schedule a trip to your machine at a certain time of day.
Perhaps the most valuable tip is to not put all your eggs in one basket. Research shows that owners of vending machine businesses who make the most profit are those who have a variety of machines that are situated at various types of locations and stocked with a diverse range of products. Keep your eye on the market and take action when a particular product becomes a big hit. Visit marketing, lifestyle and catering expos where you can network with exhibitors and visitors and stay on top of new trends as soon as they hit.