The variety of products that can be stocked in a vending machine is one of the greatest benefits of these devices. A single vending machine can contain a wide range of items, allowing that small bit of floor space to serve many different people and their varied tastes.
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Determining what to put in a vending machine can be a bit tricky. You want your machines to be used as much as possible, but what do your people want to buy? To solve that puzzle, work with the team at InReach to find the best office snacks and more. We’ll help you at each step along the way, starting with a logical product mix and refining it as data rolls in to make it even better. Let’s connect today!
Putting the right things in a vending machine starts with understanding as much as possible about the people who are going to be using that machine. Will you be serving an office building full of busy professionals? Or will this machine be placed on a college campus? InReach will design an offering tailored to your target audience so the machine can be as useful as possible.
In an office vending machine, efficiency is going to be a priority, with snacks that are quick to eat being a popular choice. These professionals might be willing and able to pay a slightly higher price for their purchases, but they want convenience in return. On the other hand, college students are notoriously low on funds and will likely be prioritizing low prices above all else.
With a general understanding of your target audience in place, the next step is to strike a balance within the machine for a nice blend of options. This could mean having some items that are considered healthy snacks, while others are a bit more indulgent. Finding a good mix helps make each machine appealing to as many people as possible, as there can be something for everyone within the same unit.
Also, don’t forget to consider dietary restrictions when stocking up. For example, including some gluten-free and vegan choices will help people who follow those kinds of diets locate something they can enjoy.
The preferences of the people using your vending machines are likely to evolve throughout the year. What is popular during the hot summer months might not be so appealing when winter settles in and the holidays arrive. In general, people tend to lean toward lighter fare in the summer and will go for more comforting, filling options during the colder season. Most likely, you’ll want to have some items that remain stocked in the machine for all 12 months, while a bit of the mix comes and goes based on the time of year.
One of the best ways to get things right with your vending machine is to respond to the usage data that is collected from actual transactions. Basically, you’ll start with a somewhat general product mix that makes sense for your target audience, then dial it in after the machine goes into use and you can see what people are purchasing. Leaning on data is a surefire way to get outstanding results from your vending program.
Take the stress out of stocking your vending machine by putting the knowledge and experience of InReach on your side. We’ll
Do you remember the first vending machine you ever put a quarter into? Quite possibly, it was a bubble gum machine outside the supermarket or the one with the clear capsules that held rings and baubles. It might have been at the laundromat, where your mother bought small packages of laundry soap and fabric softener from a box on the wall. If you are old enough, you may even remember the big metal machines that dispensed packages of cigarettes. They used to be found everywhere.
Everyone is familiar with the ubiquitous soda pop and snack machines found in waiting rooms. When you're stuck at the hospital awaiting the arrival of a new baby or stuck anywhere with a hungry toddler, those machines can be lifesavers!
A cold drink or an ice cream on a hot day can make waiting for an oil change more bearable. A single-serve package of your favorite chips or cookies can tide you over until your next meal. These days, you can even pay with a credit card or the popular electronic "wallets."
Perhaps you've wondered how much money those machines pull in. Might this be one of the side hustles or a full-time business for you - is there a profit calculator? Are you looking for (almost) passive income?
Let's look at what you need to know before buying a vending machine route.
You can think of a vending machine route as a small business with multiple tiny locations that need routine servicing. The business owner - that could be you - travels between the locations of the vending machines regularly to clean, repair, restock, and collect the money.
Some machines in prime locations may need service or maintainance every day or two, while others may only require weekly visits. Some machines are compatible with software that allows remote monitoring, which makes it easy to see which machines need attention.
Part of the beauty of a vending machine route is that you can start with just a few machines and add onto the route as the business grows. It will be wise to keep the number of machines at the maximum that can be serviced in a reasonable time frame. Of course, it's possible to hire employees if your route is large enough and profitable enough to scale up.
Like any other small business, it depends.
While annual vending machine sales in the United States are recorded in the billions of dollars, that's not all profit. There are always costs associated with doing business. However, some route owners report that they show a net profit of 30 to 40% of gross sales, which is phenomenal! Few small businesses achieve that.
Much depends on how many machines you own and how many of them are in prime locations. A food vending machine near a busy office complex will likely make more sales than one in an out-of-the-way spot where people seldom go. Foot traffic is important for consistent vending machine sales.
And any place where people have to wait is also good. Doctor's offices, gyms, apartment complexes, vehicle repair shops, and schools - any of these can be an ideal location for a vending machine. Just be sure that you have a written contract with the property owner to place them there. The small amount of rent or commission that you pay for the privilege is a business expense that you will be able to deduct at tax time.
What you choose to stock in your vending machine also matters. Cans of soda pop, candy bars, and bags of chips sell well. However, the profit margin for more substantial foods like fresh sandwiches is going to be higher. Those items also have to be refreshed more often and require more specialized machines.
If you can snag an airport contract, you can sell specialty items that travelers need. Think of charging cords and earbuds, for example. A traveler with a dead cell will pay a premium for the right cord!
If you want to be exact about your shot at profitability, make sure you check our Vending Machine Profit Calculator.
You can start from scratch and build your route from the first vending machine, but it takes time for a brand-new route to start making money. The purchase of an established route will allow you to start banking income much faster.
Of course, the initial outlay is higher, but buying an already successful route will save you a lot of hard work in the beginning. But how do you evaluate a route to see if you want to invest in it?
You can find routes for sale on several websites. Just search for "vending routes for sale" in the area that you are interested in.
First and foremost, you will want to see the sales data from the route or routes that you choose to investigate. Again, consistent sales and lots of foot traffic show that the location is a good one.
You may be asked to sign a confidentiality agreement before the owner/s allows you access to their financial information. It's not a bad idea to run any contract past your lawyer before signing it. But it is reasonable for the seller to expect that you will keep financial information confidential.
It's best to examine 3 to 5 years' worth of financial records, and your accountant can guide you through the profit and loss reports and tax records. You should be able to see that the route is profitable and that everything is above board.
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Placing a fair value on a vending machine route is complicated. If you were smart and had your accountant and/or lawyer look at the financial reports, they could help you find the information needed to come up with a price.
Generally speaking, add up the cost to replace all of the machines and any other equipment and inventory included in the sale. Good bookkeeping records will show the purchase price and depreciation of these things. Then add 3 or 4 months of gross sales to that figure. This should give you a good number to start with.
Some machines and some locations will do better than others. So, while you will want to learn the sales of each machine and location, it's the combined sales of the route that you will want to see. You can always fill a machine with different items or move it to a better location after the purchase.
Unless the seller has used software technology to accurately track all sales from all machines, you may not get a true picture of the gross sales. Keep this in mind if all sales are cash only, and expect some exaggeration on the part of the seller.
When you are sure that you want to buy the vending machine route, it's time to approach the seller with an offer or counteroffer of the listed sale price. But make that offer less than you have budgeted for so that there's room for negotiation. It might take a bit of back and forth before both parties are satisfied with the deal. Know your maximum offer, and do not exceed that amount.
Some deal breakers might cause you to decline to purchase a particular route. They include:
Here are some questions to ask the seller:
When you and the seller have come to terms, have your lawyer draw up a purchase agreement. This contract should include the following:
As with any business venture, the first step is to find out what your city, county, and state requirements are to get started. Many places will demand that you get an annual business license and will undoubtedly expect you to pay sales taxes on your profits. In that case, you will need a state tax ID. If your route crosses state lines, be sure to understand the legalities in all jurisdictions.
Contact city hall and your state taxation department to be sure you have all the paperwork in order. It's much easier to do it right in the beginning than to pay fines later.
Unless you intend to hire employees, you may not need to get a federal tax ID, but it can come in handy when you go to open a business bank account. And you will want to open a business banking account right away.
If the seller is agreeable, ask them to sign a contract to be your advisor for a designated transition period. You can learn a lot from a successful businessperson. After all, they are the experts on the route and can help you learn the ropes faster than you can on your own. The consulting fee will be a small price to pay for their expertise, and you will pay them as a contractor instead of an employee.
It's probably a good idea to sit down with an accountant early in the process of setting up your business. You will need to have a bookkeeping system and understand how to use it. Or you can hire a bookkeeper to properly enter all of your data. You will have to keep careful records of both sales and expenses so that you or your accountant can be ready to file your taxes every year.
You will need a written business plan to approach lenders once you are ready to buy your vending machine route. This will include a budget and quotes for purchasing your equipment and initial inventory. Here are some other things to consider when you write your plan:
Don't go crazy here and ask for more money than you need. You want to be able to pay the loan back and still have the income to buy new inventory as your sales increase. You will probably be looking at a short-term loan instead of a standard loan. If you handle this part right, you will soon own your business outright and start banking the profits for yourself!
You will want to confirm the sale price with your lender, if you are using one, and pick up the cashier's check. Make sure that your lawyer is available to be at the closing with you.
You, your lawyer, the seller, and their lawyer should each review all of the documents. Any corrections should be made before signing anything. You will then pay the seller with a cashier's check and get the bill of sale for the transaction.
And just like that, you become the proud owner of an established vending machine route!
Once you have secured a route, it will be important for the longevity of your investment to start thinking about optimization for the future. Buying a vending machine route can include both buying the machines at this location outright, or buying the space itself instead of each individual machine. If you are considering purchasing a vending route, it's important to take into consideration expansion or replacement of machines that either were currently located at this space, or machines that fit within your overall portfolio of machines for ease of maintenance.
For a vast majority of locations, the SM is the best option for those looking to purchase a new machine outright and not have to worry as much about availability of parts or product sections. We recommend this heavily primarily due to our experience with Seaga's machine line, as they tend to just keep working as you expect without having to be on top of the lifecycle of individual parts.
Purchasing a vending machine route is a great way to get started in the vending industry, but it's important to be prepared for the upkeep and costs of having access to multiple locations at once. Vending machine routes are both a profitable investment and a solid foundation for anyone looking to start a business or advance their career in the vending industry.