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Ten Minute Startup - Issue 1 - Vending Machines

Ten Minute Startup - Issue 1 - Vending Machines
By Ten Minute Startup  • Issue #1 • View online
Vending Machines. Let’s take a deep dive into starting a vending machine business.
What’ll you learn :
  1. Why should you start this idea?
  2. Overall benefits of starting this idea
  3. The cons of starting this idea
  4. The true income reality of starting a Vending Machine business
  5. How much you can expect to make when you start a Vending Machine business?
  6. How long it takes for the first machine to produce income?
  7. How many machines to start off with when you start your Vending Machine business?
  8. Cost of starting a Vending Machine business
  9. Market size
  10. How to choose a profitable location for a Vending Machine
  11. Location examples:
  12. Vending Machine ideas
  13. The 6 most crucial tips to building a profitable Vending Machine business
  14. The top five Vending Machine business myths exposed
  15. The top five Vending Machine business truths
  16. The top five common traps new Vending Machine business owners tend to fall into
  17. How long does it take to refill a Vending Machine?
  18. Where will I find my stock to fill the machine?
  19. Successful stories

Why should you start a Vending Machine business?
Many people are considering vending as a business as a hot idea right now. They are looking into this as way to bring in passive income with little effort. Don’t take the perceived simplicity of vending as a business for granted. There are many elements that have to take place before your vending machine business can be a success.  
Overall benefits of starting a Vending Machine Business.
  • Meaningful business connections. You never know who you will meet as a vending machine business. This could be the start of an incredible business opportunity!
  • You are your own boss! Calling the shots can be empowering and liberating!
  • Simple business model. Vending machine business has the advantage of a simple business model, which makes launching and building the business more seamless.
  • Easy to scale: Scaling your vending machine business is incredibly easy. You can start off with a few vending machines, and as you become more successful, expand locations.
  • Relatively low startup costs: An operator can find a decent machine and buy inventory for <3k.
The cons of starting a Vending Machine business.
  • Crowded Space. Competition is high when it comes to your vending machine business, so it’s important that you spend a good amount of time analyzing the market and understanding where the demand lies.
  • Finding The Right Supplier. Most businesses in this space go the supplier/manufacturer route, which isn’t a bad thing! However, finding the right supplier can take a lot of time, energy and trial/error. If done properly, this process can save you months (if not years) of time and energy. More on this below in the “finding a supplier” section.
  • You might struggle financially (at first)! If you bootstrap your business or choose not to pay yourself (or pay yourself less than you were making at your corporate job), this can be financially taxing. It’s important to adjust your lifestyle and set a plan for yourself so you don’t find yourself in a stressful situation.  
  • Vending machines are an easy target when it comes to theft and vandalism. Ensure that your machine locations are located in secure and safe areas to avoid a loss in profits.
The true income reality of starting a Vending Machine business.
  • Most people have heard the claims that a vending machines business will earn you $100 per hour, you start doing the math and think, “Jackpot!” However, in reality, this is not possible and most people in the vending machine business will quickly tell you that these figures are way off.
  • First, starting a vending machine business typically means you buy one machine and strategically place it in a high-traffic area.
  • To start a vending machine business with success, you have to speak to the owner of the business you are targeting and work out some kind of deal for them.
  • Otherwise, they will not let you place you vending machine on their premises out of the goodness of their heart.
How much you can expect to make when you start a Vending Machine business?
  • On average, many entrepreneurs who start a vending machine business report that one vending machine in a prime location may bring in $50 to $100 per month.
  • In theory, if you have 100 vending machines - all in prime locations - you may be able to hit around $1000 per day, but that may not be everyday.
  • This is because maintaining 100 machines is a lot of work, usually much more than one person can do, which means you will need to hire someone to help you maintain and stock them.
How long it takes for the first machine to produce income?
Producing income in any vending machines business depends on many factors such as:
  • Your location, how much traffic your location gets,
  • Whether your vending machine is place in a location where people actually notice it.
  • Whether or not your product offering actually appeals to the people who come into contact with your vending machine.
  • Price of your goods.
 How many machines to start off with when you start your Vending Machine business?
The worst thing you can do when you are just getting started in the vending machines business is run out and buy 200 machines.
Why? Because you have zero experience on location and now have indebted yourself with all these machines that may or may not make you any money.
Therefore, be cautious when you start your vending machines business and buy one or two, get prime location and work hard to keep these running smoothly.  
Cost of starting a Vending Machine business.
  • The average cost of one vending machine is $500(used) to $3,000(new), which means that two would cost you as much as $6000.
  • General liability insurance (~$500/yr for <$100k in annual sales)
  • Commissions paid to locations (5-25% of revenue)
  • Transaction fees for card purchases (~5-6%)
  • Card reader analytics fees ($10/mo)
  • Storage space for unused machines (~$100/mo)
  • Gas and transportation ($50-$100/mo)
  • Taxes (10-37% of adjusted gross income)
  • Routine maintenance and vandalism repairs ($50-$250/yr).
  • Be especially careful for people that want to sell you several vending machines all at once, after all, their goal is to sell you the machines, they don’t care if you sink or swim after you have purchased them and are in debt with the bank.
Market size of Vending Machines.
  1. The Vending Business Revenues close to 8 BILLION a year
  2. People using cashless methods of payment spend $1.71 on average.
  3. There are roughly 5 million vending machines in the United States.
  4. More than 5 Billion Drinks and 8 Billion snacks get sold each year.
How to choose a profitable location for a Vending Machine?
Just like location matters when buying real estate, the same applies to your vending machine. Demographics, weather, and how accessible other nearby food/drink is, can all dramatically affect your bottom line. 
  1. We recommend choosing a place that has at-least 30+ regular people at the premise on a daily basis. This total of 30 can be a mix of staff members, contractors or customers who walk-in.
  2. Sites that have a “blue-collar” working environment should do well with at least 25 regular people (daily). Examples of a blue-collar vending site are factories, warehouses, mining plants and other areas where quality food is difficult to find.
  3. Sites that have a “white-collar” working environment should do well with at least 35 regular people (daily). Examples of a white-collar vending site are office buildings, airports and locations in the CBD
  4. If the machine is placed in a building that has 2 main areas where most people congregate, always choose the area that tends to have the larger number of people.
Location examples for Vending Machines.
Vending Machine ideas.
  1. Sodas Vending Machine
  2. Snacks Vending Machine
  3. coffee Vending Machine
  4. Energy Drinks Vending Machine
  5. Healthy Foods Vending Machine
  6. Groceries Vending Machine
  7. Beauty Products and Cosmetics Vending Machine
  8. Fruits Vending Machine
  9. Vegetables Vending Machine
  10. Flower Vending Machine
  11. Cupcake Vending Machine
  12. Frozen food Vending Machine
  13. Bread Vending Machine
  14. Egg Vending Machine 
  15. Birth Control Vending Machine
  16. Food Supplements Vending Machine
  17. Books Vending Machine 
  18. Live Baits Vending Machine
  19. Cupcakes Vending Machine
  20. Fresh Salad Vending Machine
  21. Baby Essentials Vending Machine
  22. Last Minute Gifts Vending Machine
  23. Everything You Can Find In A Convenience Store Vending Machine
  24. Vending Machines That Break Things
  25. Emergency Supplies Vending Machine
  26. The Mystery Box Vending Machine
  27. Pecan Pie Vending Machine
  28. Face Mask vending machine
The 6 most crucial tips to building a profitable Vending Machine business.
Picking the right location.
  • Location is the biggest reason that one vending machines business will succeed over another.
  • Let’s face it, if your vending machine is located in the middle of nowhere, it doesn’t matter what you have inside. If no one can find your vending machine or it is not convenient, you will probably lose money.
  • Remember, purchasing from a vending machine is an impulse decision, no one leaves their home with the thought of visiting vending machines.
Picking the right product
  • If a vending machine has a prime location but it is stocked with items that no one wants, this can cost you in sales.
  • If your vending machine is near other vending machines that sell pizza, for example, and you are selling stuffed animals, you’re not strategizing correctly since a something cold to drink like a soft drink next to the pizza vending machine would bring you more profits than stuffed animal
Starting small
  • Most successful vending machine owners started small, which is a good idea so that you do not have to invest too much money all at once.
Accepting credit cards.
  • Keep in mind that many people do not carry cash, so putting in a vending machine that only takes coins or dollar bills will limit the amount of sales, therefore, you should have a machine that can process debit cards along with cash, that way you increase the convenience to the customer.
Having Realistic Expectations
  • People that starting a vending machine business that have realistic expectations about how much money they can make as opposed to those that have been led to believe it is a get rich business, are more likely to succeed because they have both feet planted on the ground from the start, so-to-speak.
Building Relationships
  • Relationship building is a key factor that distinguishes why one vending machine business will succeed and why another one will fail. Below are five crucial vending business relationship tips that will help you to build a profitable vending business.
  • You should visit locations that have a lot of traffic and begin building a good rapport with the business owner.
  • Explain to him or her how the vending machines business works and what’s in it for them.
  • Leave the business owner with some literature about vending machines and make an appointment with them to discuss it in further detail.
  • Don’t be too pushy or you might turn them off.
  • Present yourself to the business owner as a professional, look your best when you begin building relationships because your first impression to them is often your lasting impression, so make it a good one.
The top five Vending Machine business myths exposed.
Running A Vending Business Is Easy And Requires Little Effort.
  • The commercials and ads that you have seen over the years, makes vending business success look easy - it appeals to you to run your own business and make good money at the same time.
The Vending Machine Business Is A Hands-Off Business.
  • When ads run for vending machines, they do not tell you about the maintenance that goes into keeping your machine in tip-top shape.
  • Let’s face it, people that use your vending machines are not going to be gentle, after all, it is not theirs, so many people will be rough with it. They are electronic and these parts can and do wear out.
Entrepreneurs Who Pursue Vending As A Business Cannot Make Full-Time Living.
  • This has been a myth that arose when many people went into the business and purchased too many machines too fas
I’ll Be Able To Set My Vending Machine Anywhere I Please And I Can Always Get The Best Locations.
Vending Machine Business Owners Get Special Discounts Because They Belong To A Special “Club”.
  • Many new vending machine businesses are run by owners falsely believe that if they start a vending machine business, they will get special discounts on the products they stock in my machines and be entitled massive discounts so they will make more money per product.
The top five Vending Machine business truths.
Running A Vending Machine Business Successfully Takes A Lot Of Patience And Strategic Planning.
  • Vending business success is not as easy as the commercials and ads may lead you to believe.
  • While it is possible to make money with vending as a business, it also takes a good strategic plan as well as hard work on your especially in the beginning.
  • Keeping the machines stocked is your number one key to making sure you have continual sales.
Vending Business Success Require That You Properly Maintain Your Machines.
  • Have you ever gone to a vending machine, put your money in and it does register that you put anything in?]
  • You just lost your money because no one is around to fix it.
  • This is often due to lack of maintenance on the part of the machine owner. Therefore, you have to realize that if you own vending machines, they need regular maintenance to ensure they are functioning correctly.
 For Those That Start A Vending Business, It Is Possible To Make A Full-Time Living, But It Does Take Time To Build It Up.
  • It is wise to begin with one vending machine, allow that to begin making money and then purchase another.
  • This way you start slow and build slow, but over the course of a few years, you can be earning good money.
To Obtain Vending Business Success, Location Is Important. But You Can’t Always Assume You Will Have The Best Location.
  • In order to get these prime locations, you will need to speak with the business owners and make it a good deal for them.
  • The more you speak to potential customers, the more you will become more confident, which will often land you in the best spots
There Is No Special “Club” That You Become A Member Of When You Pursue Vending As A Business - You Can, However, Buy In Bulk, Which Will Save You Money.
  • However, you still have to buy the products to stock the machines, which means this is money you have to spend out of your earnings
The top five common traps new Vending Machine business owners tend to fall into.
Choosing The Wrong Location.
  • Take some time to choose the best locations, if you put your vending machine in the middle of nowhere, no one will find it. Also, make sure the machines you place are relevant to the location, in other words, do not set up a newspaper vending machine at a five-star restaurant.
Choosing A Vending Machine Location That Has Too Much Established Competition.
  • Do your research on the vending machines business in your area, if it is flooded, check a town or city nearby.
Forgetting to Negotiate.
  • Good locations are hard to come by in the vending machines business, therefore, be prepared to negotiate for your spot .
Starting Too Big.
  • Start small, do not invest your life’s savings into buying every vending machine you can afford. Buy one and see how that works for you, then continue expanding.
Not Servicing The Vending Machine Properly.
  • Never let your vending machine sit half empty because when it looks empty, people assume that what’s left is old. Also Make sure to service your vending machines when people are less likely to want to use it. In other words, do not service your machine during a lunch hour rush.
How long does it take to refill a Vending Machine?
  • Refilling one vending machine only takes about 10-15 minutes. 
  • One person will have time to fill 10 to 15 machines per week.
  • 60 minutes is need for filling, monitoring and travel time
  • 1 day for snack and drink shopping, talking to wholesalers
* Remember as you add more machines to your vending run, your time requirements will reduce (from a time per machine basis).
Where will I find my stock to fill the machine?
  1. Sam’s Club
  2. Costco
  3. BJ’s Wholesale Club
  4. Any other wholesale corporation
Successful stores of starting up a Vending Machine business.
Links
Videos
Day In The Life Of A Vending Business Owner!!
Day In The Life Of A Vending Business Owner!!
collecting money from my 11 vending machines!
collecting money from my 11 vending machines!
What I wish I Knew BEFORE Buying VENDING MACHINES!
What I wish I Knew BEFORE Buying VENDING MACHINES!
Summery why I like this idea.
  • While a vending machine business will not make you a millionaire overnight, it can provide you with a few hundred dollars/week. Over time, your earnings from your vending machine business will add up.
  • It’s a simple business model.
  • Good starting business.
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