Vending Machine business

[azpirin]

Does anyone know how to start up a vending machine business without joining a franchise?

A warehouse store near me sells vending machines for half of the price of the ones on the net or through vending.......com's. They also sell the food and pop in bulk for cheap.

But, how do I find the location to put one?

Thank you in advance!

[shugotenshi]

I do not own any vending machines but the way I understand it is just building relationships. You will need to find the locations for you machines. Most agreements are, "let me put my machine on your property and I will give you __% percentage of the take." You'll just need to bang on doors and ask if they'd let you put a machine in their lobby.

A friend of mine has a friend that refills vending machines for a living. I was interested and surprised to hear that they are Unionized. Who knew?!?! Be careful. You maybe seen as a scab. You could end up with broken vending machines... "Hired Goons!" (for all you Simpson fans out there).

[Arlene M Passalacqua]

Why not buy an existing vending business?

[azpirin]

Originally Posted by Peter T Davis

Why not buy an existing vending business?

How would I find one in my area (Denver)? Through business opps in the newspaper or with the franchisers?

Thank you!

[bliksembiz]

First, to get into a location on your own, you must build a relationship with the store owners/managers. They may need some of the products you offer. That may get you in the door. You usually pay a % of the sales back to the store. Then if you prove to be better and more cost effective than the other guy, they might expand your goods.

Second, to find an existing business, you may just want to talk to the store owners and find out what company does their route. Then you can call the company and ask if they are interested in selling. Of course, there is always the business opp ads in the paper.

As always, be cautious of buying an existing business. Always do extensive research before investing.

[anupam]

Relationships are one thing, but you don't necessarily have to pay a %. Some places have a royalty they pay to a charity and that is another route. It's easy to walk door-to-door or you can get a placement agency to do this for you (of course at a fee that may be anywhere from 1-3 mos. profit).

Good luck and remember, like anything, it requires heavy work but don't give up.

[stuartnickerson]

My parents ran a vending business for a couple years and let me key you in on something. It's very, very, very hard work. You may think that there's nothing to it--- the machine does all the work right? Stocking those machines weren't fun and the whole process of loading and unloading snacks/cold food/and pop wasn't easy either. It's physically and mentally tough work. Well, that is if you actually want to make a business out of it. My parents were grossing something like $5000 a week in sales because they had some monster locations. They worked full time and really put in a lot of work. It's not easy, that's all I'm saying.

It IS good money though... if you can find some good locations or buy a location from another vending company. Another thing to keep in mind about those machines is that they do break down a lot no matter how good of condition they are in. I remember my dad telling me that they would spend a lot on just maintaining the machines (which they bought new.) There's just a lot of problems with this business. It's really, really, really tough work. You won't know until you were stocking vending machines full time but just take my word for it. This is not easy money. It's good money, but not easy.

Lastly, there is a problem if you ever wanted to hire employees. Realize that if you get some monster accounts (like my parents did) that you are going have $5,000 in cash sitting on your kitchen table. If you ever wanted to hire somebody to help you you'd have to really, really, really trust them. They'd be handling everything in CASH.

I hope I helped you out a little--- I don't mean to sound so negative about the business but just helping you realize what's involved with it. I know a lot of people assumed when we were in the business that it was so great... having all that food and pop and just "filling" the machines. But those machines needed filled every day and sometimes twice a day.

[stuartnickerson]

Oh yeah, my parents did pay 10% of the profit back to their locations. I'd recommend doing this- for most companies and locations it's probably mandatory and well worth it. You don't want another vending company knocking you out because they'll pay and you wont.

[bigdawg8330]

Originally Posted by MartyJump

My parents ran a vending business for a couple years and let me key you in on something. It's very, very, very hard work. You may think that there's nothing to it--- the machine does all the work right? Stocking those machines weren't fun and the whole process of loading and unloading snacks/cold food/and pop wasn't easy either. It's physically and mentally tough work. Well, that is if you actually want to make a business out of it. My parents were grossing something like $5000 a week in sales because they had some monster locations. They worked full time and really put in a lot of work. It's not easy, that's all I'm saying.

It IS good money though... if you can find some good locations or buy a location from another vending company. Another thing to keep in mind about those machines is that they do break down a lot no matter how good of condition they are in. I remember my dad telling me that they would spend a lot on just maintaining the machines (which they bought new.) There's just a lot of problems with this business. It's really, really, really tough work. You won't know until you were stocking vending machines full time but just take my word for it. This is not easy money. It's good money, but not easy.

Lastly, there is a problem if you ever wanted to hire employees. Realize that if you get some monster accounts (like my parents did) that you are going have $5,000 in cash sitting on your kitchen table. If you ever wanted to hire somebody to help you you'd have to really, really, really trust them. They'd be handling everything in CASH.

I hope I helped you out a little--- I don't mean to sound so negative about the business but just helping you realize what's involved with it. I know a lot of people assumed when we were in the business that it was so great... having all that food and pop and just "filling" the machines. But those machines needed filled every day and sometimes twice a day.

How much of that $5,000 was profit? Also whats the cost of an average vending machine?

[f3adventure]

I worked for a company which had both vending machines and game machines. It was savage out there to get good sites. We employed commission-only finders to get sites for us and it was tough to find good paying sites. There's loads and loads of thin-paying sites but they won't support the costs of the machine, the movements in and out, the stocking, maintenance, collecting the money and paying commissions.

And by the way, there are coin counters on all machines so collectors can't steal easily. Maintenance was a permanent issue as lots of machines get damaged by irate customers who believe they have a right to do $300 of damage for the loss of $1. Maintenance and restocking had to be fast because the site owners see they are losing commissions and very obviously we would lose profits.

By far the biggest problem is obtaining good sites. We employed people who were connected with shop and mall developers and paid the developers money to allow us the choice of sites BEFORE the mall got built and before any of the other operators could get in there.

We paid finders-fees to anyone who found a good site for us or persauded a site owner to take one of our machines. Machines are not in short supply, just the sites.

It is hard work for a small size operator and you need probably 20 to 40 machines to make a 'round' worthwhile.

Forget about buying one of the often advertised vending machine rounds. Usually it's a scam where the sites are all bad ones. Anyone with a good round won't let it go cheap or easily.

Your net on a compact round of 40 machines might be 20%, so if you are taking $5000 weekly you'll net around $1000 of that. Commissions varied based on what we could negotiate but went from 10% to 20% depending on the quality of the site.

I managed a 3 state tech-support operation for that company which also manufactured machines. Not only did we place machines on sites but we sold machines to anyone as well. Some operators preferred to buy their own machine for their site and pay all the costs themselves. We didn't care. Either way we got our money.

Our commission-only salespeople selling the machines made small fortunes, some drove Benz's. People would come in with bags of coins to pay for new machines, they were too scared to go to a bank and convert it in case they got detected for not paying taxes, so we had to have a coin counter installed. One of the office girls had the task of counting the coins and she despised the types that did this.

It's only really a good business if you have hundreds of machines and you have an efficient operation, but you could start small and build. Be ready for hard work. I forget how many machines my company had but it was thousands.