How to Break into the Vending Machine Business
While the vending machine business may no longer be a novel idea, it can still be a profitable venture.
Learning how to invest in vending machines can open up passive revenue streams that many may overlook in specific locations.
If you’ve been looking into different opportunities to enter a market as a new company owner, starting a vending machine business may be the right option for you. Investing in vending machines has all of the benefits of running a successful business without the risks associated with a brick-and-mortar store.
Today, we will discuss how to get into the vending machine business while providing some helpful vending machine tips.
Advantages of Investing in Vending Machines
The vending machine business is booming, with a compounding growth of 9.4% expected to continue until 2025.
By learning how to start a vending machine business, you’ll be entering a market that requires little start-up capital, has built-in flexibility, and provides an opportunity for passive income.
As an owner of a successful vending machine business, the initial equipment necessary to run it will come down to a computer, printer, and phone.
You’ll have the freedom to dictate your working hours as you manage and organize routes from the convenience of your phone.
The vending machine business can be extremely lucrative while, at the same time, easily manageable. Many owners find that they want to learn how to start a vending machine business for free time and flexibility in their schedules.
Here are some vending machine tips that can help you start your journey toward financial independence.
Do Your Market Research
Breaking into the vending machine business doesn’t require an MBA or years of complex training. However, several aspects will require thorough analysis for the business to become a success.
By conducting market research, you will be able to break down the costs associated with starting the business, the necessary time commitment, and when you can expect a profitable return on your investment.
Decide on the Perfect Location
As the real estate mantra goes, location is everything. The difference between a well-trafficked site and one off the beaten path has a quantifiable impact on your sales figures.
For optimal results, you will want to locate your vending machines in areas with robust walking traffic, such as:
- Strip malls and shopping centers
- Apartment complexes
- Schools and universities
- Hospitals and care centers
- Hotels and motels
- Transportation centers; airports, train stations, bus stations
Keep in mind that certain locations may require you to comply with regulations pertaining to the Americans with Disabilities Act (ADA.)
You will also want to secure a well-lit location, to avoid potential vandalism and theft. Having to replace merchandise or machinery can significantly impact your bottom line.
Find Your Vending Machine
When the average American imagines a vending machine, it’s mostly relegated to drinks and snacks. However, if countries such as Japan have taught us anything, vending machines can dispense a variety of merchandise, and some are technical marvels.
There are several options when choosing between the different types of available vending machines. Many of them provide unique forms of functionality, including:
- Accepting various forms of payment
- Enhanced user experience through interactive touch or voice-activated screens
- Bulk candy dispensers
- Full-line vending
One of the most profitable types of vending machines business models is to offer full-line vending.
This model will have several types of vending machines that offer a wide range of products, including:
- Fresh fruit
- Canned and bottled soda
- Cold food
- Frozen food, such as ice cream
Stock Your Inventory
Once you’ve found the perfect location and decided what you want to sell as a new business owner, it’s time to actually stock your inventory.
Ensuring that your vending machines are consistently stocked is the key to a profitable business. However, you need to keep track of which items are performing well and which may not be suitable for the location’s demographic.
For instance, if you have a beverage dispensing machine outside of a gym, you may notice that one sports drink brand significantly outperforms another. In this case, it’s a simple adjustment to what inventory you’ll reorder. If the trend continues in favor of a particular brand, you can begin negotiating with the distributor to better deal with bulk purchasing.
Explore Your Financing Options
While the financial threshold of breaking into the vending machine business isn’t set very high, purchasing any equipment will require upfront capital.
There are several different routes you can take when it comes to financing your business venture.
Vending Machine Equipment Financing
Equipment financing is a method of purchasing specific business equipment to get your company operational. The benefit of equipment financing is that it allows you access to modern technology without having to pay for it upfront, out-of-pocket. It also comes with the advantage of being easier to obtain than a traditional small business loan issued by a bank since the equipment itself will be used as collateral.
An equipment lease shares similar characteristics with equipment financing. The major difference is that you have the option to either re-sign the lease when the term is over or move on to another piece of equipment.
One of the easiest ways to secure the funding needed to start and operate a vending machine business is by contacting L3 Funding. We offer a wide range of merchant funding solutions, and we’re invested in the success of your business, as our success depends on yours. Apply for the small business working capital you need today!