Considerations For Investing a Vending Machine Business
Starting a vending machine business can be a great way to earn money, with plenty of flexibility. However, it’s crucial that you consider all the factors in this post prior to taking the plunge. Once you understand the industry, know where you want to put your machines, and how you’ll finance the operation, you’ll be in a good position to begin.
Know the Startup Costs
As with any business venture, there are costs associated with starting a vending machine business, and you’ll need to consider them when deciding whether opening this type of company is right for you. Here are some of the costs to consider:
The obvious expense to consider is the machines themselves. On average, a machine will cost between $3,000 to $5,000. That number will vary based on where you purchase the machines and whether they are new or used. If you don’t have thousands of dollars to sink into this expense, you may need to save up first.
Insurance and Taxes
Just like with any other business, you’ll have to factor insurance and tax costs into your budget with a vending machine company. Find out about tax licenses and liability insurance policies before starting.
Rent and royalties might be figured into your contracts with the locations that host your machines. Those costs will vary on a monthly basis, but you should be able to determine approximately how much you’ll have to pay on average.
Schedule regular visits to your sites to check on your machines and ensure they’re all functioning properly. In addition, you should factor in repairs and replacements into your budget.
Many vending machine businesses operate with a small staff. Still, you might consider hiring a few customer service representatives and/or team members that will restock the machines.
Choose Your Products
Stocking your machines with inventory might not seem like a major task, but you should put some thought into the type of products you’re offering in each location to make the most profit. Think about the customers at each location and what they’ll be looking for.
Snack foods are the obvious choice. You can stock your machines with chips, candy, and soda, which do well in most locations.
If you want to change things up, you can get follow the trend of opening vending machines that have healthy snacks. According to Forbes, cities across the country are putting legislation into effect that will create rules like making 40 percent of vending machine products healthy options.
Choose the Right Locations
Location is everything in the vending machine industry. Choosing the best snack machine locations will make all the difference in whether your business is successful. Look for locations that have the following qualities:
Locations that have high traffic throughout the week: Airports, train stations, shopping malls, government buildings, event centers, and schools.
Office buildings with at least 50 employees.
Spaces without vending machines in place and without other food options nearby.
Places where people frequently must wait in line or sit in a waiting area (like doctor’s offices).
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