Restocking a vending machine will cost you anywhere from $0 to $300 per month. However, this will depend on the exact items you are selling using the vending machine as well as your location.
Reports have it that the vending machine industry is experiencing massive growth in the United States. Last year alone, the market was valued at $30.30 billion, and it is projected to keep rising at a CAGR of 9.4% from 2022 to 2028. This encouraging growth is attributed to the consistent demand for convenience and the eagerness to save time while seeing to the hunger and thirst needs of customers.
So if you are considering starting and operating a vending machine business, it’s recommended that you understand the expenses that come with running this business.
Most often, these expenses encompass the purchase of goods, transportation costs, and inventory management expenses.
To cut down on restocking costs, vending machine operators must invest in efficient inventory management practices. To achieve this, you will have to come up with a viable way to track sales data and analyze the trend to find out the most popular products, the optimal reordering time, and the required quantity.
You will also want to leverage vending machine management software that makes it easier to manage inventory levels and minimize surplus products.
Factors That Determine the Cost of Restocking a Vending Machine
One thing you have to understand is that varying locations will draw in varying levels of foot traffic, and the demand for a particular item can vary as well.
Also note that places with high traffic, such as airports, offices, schools, or shopping centers, will require more frequent restocking, and this will determine how much you spend to restock in a given year.
Size and Capacity
Bigger vending machines that take more product selections will most definitely need more items to ensure it is well stocked, and this will mean more expenses. Aside from that, vending machines with higher capacities will necessitate more frequent restocking.
Product Variety and Demand
Don’t forget that the more diverse and specialized the products, the higher the cost will likely be. Most often, this is attributed to the fact that niche products tend to come with a higher price tag, and maintaining a vast range of inventory can be genuinely daunting and time-consuming.
Pricing and Profit Margin
It takes a great deal of work to fix the appropriate prices for the products in your vending machine. Although it might be tempting to grow your profit margins by raising prices, it’s essential to understand your profit calculus and also come up with a balance that aligns with your target audience. Keep in mind that charging so much will chase away your clients, whereas underpricing can eat into your profitability.
State Laws and Regulations
It is important to understand that the cost of restocking your vending machine can vary depending on state laws and regulations.
You will find that a good number of states impose additional taxes or restrictions on specific types of items, and this has a way of impacting their pricing. For instance, a good number of states impose higher taxes on sugary beverages, and this might lead to higher prices.
Monthly order quantities
A good number of suppliers are known to offer tiered pricing based on volume, and this simply entails that the more you order, the lower the cost per unit.
As such, vending machine business that places larger monthly orders will get better pricing and maximize their profit margins.