Averagely, a vending machine costs between $1,000 and $6,000 for those who are looking to buy just one machine. If you are just starting the business, it will be best for you to buy one or just a few especially if you haven’t found so many established routes to put the vending machines.
It is however important to note that the more vending machines you have, the more revenue you are likely to generate and the more problems you are also likely to encounter. Also, even though this might be the amount you will need to buy the vending machines, you will also need more capital to stock the machine and handle other logistics.
When looking to buy a vending machine, it is important that you are very careful as deals that sound too good to be true may end up costing you a lot. Even though there are many benefits to buying a vending machine; it is important that you do a thorough research before you pay for a new or used machine. If you are going to be buying a used vending machine, ensure that you cultivate a professional or personal relationship with the owner.
This relationship will enable the owner of the machine to be more honest about the state of the vending machine that is being sold to you. It might not be possible however to cultivate any sort of relationship with the person or company that is looking to sell the vending machine, so in this instance, you need to take certain factors into consideration.
While this might look like an easy enough business to start, it requires dedicated planning and hard work, because it is more than simply installing a machine in a location and hoping to generate lots of revenue. Most people that usually buy a vending machine are those looking to own a business but do not have enough capital to rent a facility and bear other overhead and running costs.
7 Factors to Consider When Buying a Vending Machine
Even though vending machines are beneficial in places where there is enough foot traffic, it is however vital that you consider other factors when looking to buy one so that you do not end up making the wrong investment. Some of the factors you should take into consideration are:
1. The need for the machine
Even though getting a vending machine is a good investment, it is important that you are sure of your decision in wanting to buy one. You shouldn’t buy a vending machine because others are doing so or because someone told you to; the decision should come out of the conviction that you need a vending machine in order to be able to achieve your purpose.
2. Should you buy an existing vending machine?
If you buy an existing vending machine business, you are likely to have leverage over one who is starting from scratch. However before buying any exiting vending machine, ensure that you know why the owner is looking to sell. The important thing is to ensure that the machine you are looking to buy meets your needs.
3. Ease of use
The ease at which the machine can be used is a very important factor to consider especially if you are looking to have little children operating the machine. This means that even though you might be tempted to buy vending machines that come with a lot of gadgets and knobs, if most of your customers cannot operate it, it will lead to a loss of revenue for your vending machine business.
4. What packages are being offered by your supplier?
Some of the machine suppliers usually provide the buyer with a contract of where they are going to refill, carry out maintenance and also take care of other matters regarding the machine.
5. What locations are best?
In looking for where to locate your vending machine, you should consider schools because not only will you have high and consistent traffic for at least 5 times a week, you will find that there are a lot of students who don’t take snacks with them from home and so will need to buy from your vending machines. Other locations that you should take into consideration as they can yield good revenue are office buildings, hospitals, recreation centers and YMCAs.
Ensure that the location you intend to choose does not have a high crime rate or incidences of vandalism and theft as these factors are likely to quickly deplete your profits. Ensure that whatever location you choose have high visibility and are in view of security cameras.
6. What commission rates to consider
The fact that a vending machine business is averagely considered as successful doesn’t mean that it could turn out to be a failed investment if you do take your time to carefully plan the business. Thought you will not be renting a physical location to run your vending machine business.
But majority of the locations where you intend to install the vending machines will expect to receive commission of between 15 percent and 30 percent in exchange for space. Whatever commission you negotiate on should be one that takes location and amount of traffic into consideration. You can also offer a higher commission in exchange for exclusivity within a location.
The profitability of your business will be largely dependent on the location you have installed your vending machines. A successful vending machine business is one that is in an area that has a lot of foot traffic with little or no competition from those selling food or drinks. Also, ensuring that you competitively price your product will ensure that you have better margins and therefore make more profits from your business.
You should note that the cost of a vending machine might however vary depending on where the entrepreneur is looking to buy the machine from and the cost of transportation to the required location. Also, the fact that you are starting a vending machine business does not mean that you should quit your regular job as a vending machine business can be run alongside a day job.