Vending machines have been around for decades, and have become a quick way to get snacks and drinks on the go. Keep in mind that a vending machine business that specializes in making available healthy snacks, beverages, and meals remains a valid business opportunity to consider as it offers a massive opportunity for entrepreneurs.
With the right planning and research, you can place your machine where there is heavy foot traffic. This warrants carrying out a comprehensive SWOT and risk analysis where you take into account the internal and external factors that can impact your business as well as its success.
Steps to Conduct SWOT Analysis for a Vending Machine Business
Identify Your Strength
This is the first step towards carrying out a successful SWOT and risk analysis for a vending machine business. You should start by taking into account the strengths of your vending machine business.
This encompasses factors like the right locations with high foot traffic, a wide range of product offerings, or innovative technology integration. It is also important you take into account the things that make your business stand out.
For example, if your machines work well with cashless payments, it’s an advantage in a world that is growing more and more dependent on digital transactions.
Take your time to evaluate the weaknesses within your vending business. Most often this will include things such as issues with machine maintenance, limited product variety, or over-reliance on specific suppliers. Understanding your weaknesses makes it possible to proactively deal with them.
At this point, you would want to shift your focus toward identifying opportunities that have the propensity to make your vending machine business more successful.
This can include factors like staying updated on things like consumer trends, looking for additional viable locations, or capitalizing on emerging technologies.
For example, if there’s an encouraging demand for healthier snack options, you must seek ways to inculcate such products into your inventory.
While you would want to stick with the good news only, you must understand the threats that could impede your business success. As such, you need to know all about the potential threats that have the potential to negatively impact your business.
Most often, this will include things like economic downturns, changing regulations, or more business competition. Note that being fully in tune with these threats ensures that you can carefully come up with contingency plans.
Conduct a Risk Analysis
Coupled with the SWOT analysis, you should also carry out a well-detailed risk assessment. There is so much at stake for a service-related business, so you need to understand the risks facing your vending machine business.
Risks for vending machine businesses might include machine malfunctions, vandalism, or changes in consumer behavior. Don’t forget to come up with mitigation strategies to limit the effects of these risks on your business operations.
Formulate an Action Plan
Leveraging the massive insights you have garnered from the SWOT analysis and risk assessment, take your time to draft a detailed action plan.
Be sure to tackle your weaknesses, leverage your strengths, seek opportunities, and come up with strategies to limit threats and risks.
Don’t forget to put in place realistic goals, timelines, as well as performance indicators to keep up with your progress and make the right decisions as vending machine business grows.
Sample Vending Machine Business SWOT Analysis
- Ability to quickly adjust the menu and prices based on customer preferences
- Low startup costs compared to opening a brick-and-mortar store
- Ability to serve customers quickly and efficiently, leading to high customer satisfaction
- The business can be scaled up by adding more machines in new locations.
- Easy to manage and operate with a small team
- High mobility and flexibility, allowing the business to move to locations with high customer traffic.
- Vending machines are incorporating advanced technology such as cashless payment systems and remote monitoring to improve efficiency and customer convenience.
- Limited menu options compared to a regular store
- Fluctuations in sales during certain times of the year, such as during holiday periods and school breaks.
- The success of the vending machine business relies heavily on the location and foot traffic of each machine.
- Heavy competition from other vendors, including other vending machines and food trucks.
- Ability to expand the business by securing regular locations at popular public facilities, hospitals, offices, and schools.
- There are always opportunities to place machines in new locations that can provide a steady stream of revenue.
- The trend towards healthier food and beverage options provides an opportunity to offer healthier products in vending machines.
- There is an opportunity to incorporate new technology such as touchless payments and digital screens to enhance the customer experience.
- With busy lifestyles, there is an increased demand for convenience which can be met through vending machines.
- Opportunity to introduce new menu items and specialty snacks to attract new customers.
- Possibility to partner with local businesses or organizations to provide catering services.
i. How Big is the Industry?
The vending machine industry is indeed a big industry. The global vending machine market was valued at $18.28 billion in 2019 and is expected to reach $25.25 billion by 2027, growing at a 6.7% CAGR between 2021 and 2027. From 2019 to 2027, the market is predicted to generate an additional $6.97 billion in sales.
ii. Is the Industry Growing or Declining?
Yes, the vending machine industry is growing and available data shows that more entrepreneurs and even conglomerates are venturing into the vending machine retail business to reach out to a specific target market.
iii. What are the Future Trends in the Industry?
As consumers continue to prioritize healthier and more diverse drinks and snack options, vending machines may need to adapt their menus to meet these changing preferences.
This could include offering more options. Vending machines may increasingly integrate technology into their operations, such as touchless payments and digital screens to enhance the customer experience.
iv. Are There Existing Niches in the Industry?
Yes, there are existing niches when it comes to vending machine business, and here are some of them;
- Art vending machines
- Beauty product vending machines
- Drinks and snacks vending machines
- Healthy vending machines
- Personal protective equipment (PPE) vending machines
- Pet care vending machines
- School supplies vending machines
- Sneaker vending machines
v. Can You Sell a Franchise of Your Business in the Future?
Go Grab® Vending Machine, Inc. has plans to sell franchises in the nearest future and we will target major cities with thriving markets in the United States of America.
- An economic downturn can lead to a decrease in consumer spending and a reduction in vending machine usage.
- Changes in consumer preferences and trends can affect the demand for certain products and potentially impact sales.
- The vending machine industry is highly competitive, and new entrants or existing competitors may impact market share and revenue.
- The COVID-19 pandemic has highlighted the importance of health and safety, which may affect customer behavior toward vending machines.
- The vending machine industry is subject to various regulations which can impact business operations and costs.
i. Who are the Major Competitors?
- AVT Inc.
- Express Vending
- Farmers Fridge
- Fresh Healthy Vending
- Gilly Vending
- Healthy You Vending
- Procter & Gamble
- 24 Hour Vending.
ii. Is There a Franchise for Vending Machine Business?
Yes, there are franchise opportunities for vending the machine business, and some of them are;
- American Vending Machines
- Fresh Healthy Vending
- Healthy You Vending
- Healthy Cravings Naturals2Go
- HUMAN Healthy Vending
- Seaga Manufacturing
- U-Turn Vending.
iii. Are There Policies, Regulations, or Zoning Laws Affecting Vending Machine Business?
Yes, there are county or state regulations and zoning laws for vending machine businesses in the United States. Before they may operate, many counties and states require vending machine businesses to get a business license.
Municipal zoning restrictions may limit the location of vending machines. Vending machines, for example, may be outlawed in residential areas or confined to specific types of commercial zones.
Vending machine firms in some counties or states are required to get permits for each machine they operate. Vending machine firms may be subject to health and safety standards, such as food handling, storage, and temperature control requirements.
Depending on the region and type of products sold, vending machine firms may be liable to sales tax or other taxes. Businesses that sell vending machines must follow the Americans with Disabilities Act (ADA), which requires accessible design for individuals with disabilities.