The pandemic has taught the world a lot about certain things that we used to take for granted. Shopping habits were already starting to shift before, but we still could go to a store and buy what we wanted, when we wanted. Then, it became something risky to go into a store in an enclosed location and be in close proximity with other people.
Which has made vending machines an even more popular way to shop for small items. Rather than go into a store to buy a few things, people are happy to do so from a vending machine. Which opens up a very big gap in the market.
If you are looking for a low cost business to start then a vending machine business is probably a good idea. In this article, we will go over some of the things to consider before jumping in.
Franchise or no?
If you have done any research into starting a vending machine business, then you surely have been seeing a lot of information about starting out with a vending machine franchise. Though this isn’t the only way to go about getting started, it is the most common way for beginners.
The benefit to franchising is the support that you get so you are not as likely to make as many beginner mistakes. Usually, the franchiser will give you a lot of advice on where to place your machines to maximise the chances of success. And you get a lot of information about how to price and other strategic advice.
The issue that some have with franchises is that you get locked into using certain products and prices are not very flexible. This is not the case in every franchise situation so if this is something that you think would be a problem then look for those that work for you if you need flexibility.
Find the right niche
There are so many different types of products to sell with a vending machine that it boggles the mind. The trick is to find a product that serves a need that isn’t being met by other retailers. People will want to buy the product and the convenience of using a vending machine is a big advantage.
Do some research to see what kind of trends are happening in a certain area. For instance, in a town with a university, see what the students in the area are having trouble getting from traditional retailers. Then, set up your machine with those products. A growing trend right now is healthy snacks. Or, you may want to fill the machine with school supplies.
It highly depends on the area where you plan to place the vending machine as to what product is going to work best. The key is to do some market research and go from there. What you are looking for is a gap in the market. When you find it it can make a huge difference.
Even aside from that the actual product is, you can find ways to beat the competition by adding value to the same types of products others might be selling. Use a difference like minimal packaging for a greener product. If it is a food product then have it be all organic or vegan.
Start out small
It’s easy to see dollar signs everywhere when you are just starting out and will be tempted to buy a lot of machines to maximize your revenue. However, the best way to go is to start out small and then grow it organically.
Get one or two machines and test the waters. You may find the product you’ve chosen is not right. Or, the area where you put your machine doesn’t have as much foot traffic as you had imagined. If you only have a couple of machines then it is easy to pivot by picking a different product or moving your machines.
The flip side of the coin is that you may start out gangbusters and see some immediate success. In this case, you can then take any of the income and it right back into the business. Buy up another machine or two with what you are making and just keep doing what was working. This will allow you to operate without a lot of money being laid out right at the beginning.
Be ready to work
Having vending machines may seem like a very passive job, but it really isn’t. It is only passive in the sense that it is making money without you needing to be there to ring up the sales. You will be doing a lot of work to keep the whole operation going, however.
Stocking the machines and collecting the money is going to take up quite a bit of time. And there are going to be issues with machines not working or even getting vandalized that needs to be dealt with. The hours are flexible, but you can’t expect it to be a breeze without you doing much work. Of course, you can hire somebody to manage the business for you but then you aren’t likely to make much in the way of profits.
Beware of hidden costs
When starting out you are likely to be operating on a shoestring budget. But, try to have a slush fund to get you through some unexpected expenses. For instance, you may be asked to start paying more for your location if the owner of the property sees you making more money than anticipated. Or you may see the electricity bills are higher than you expected.
These are expenses that are hard to plan for so you need to have money to deal with them as they arise.
Conclusion Vending machines are really trending right now and it is a great time to jump on board. The barrier to entry is much lower than a brick and mortar store with potential to make a lot of money
