Most young and budding entrepreneurs look at vending machine business as a quick money making venture. At low initial investment, one can start his own vending machine business and eventually expand it into an empire.
However, the fact that this business is so simple to start and run, invites a lot of competition. Thus, if you are thinking about starting a vending machine business of your own, be prepared to face fierce competition in your chosen area.
Importance of Vending Machine Routes
There are certain factors one needs to consider while starting a vending machine business. Just like any other business, fair amount of market research should be done before owning a business of your own. Location is by far the most crucial aspect of any business. Usually, the businesses that sell vending machines also sell vending routes.
Thus, you will have to enter into an agreement regarding the location where you can put up your vending machine. However, you can also scout for locations on your own. A good route can promise great returns on your initial investment. Other factors that need to be considered are the size and capacity of the machine, and goods that you will be selling through it.
A large vending machine with fast dispensing capacity is imperative in a crowded location. If you put up a small capacity machine in a heavy traffic area, then you will have to service it frequently. This will lead to unnecessary wastage of time and resources, and also cut off your profit margin.
Besides, the goods that you sell on a particular vending route also decide your business returns. For instance, if you sell cigarettes right out of a gym or health club, you will get fewer takers. In that case, health drinks or energy bars could be your best options. Similarly, gumball or candy machines make good business outside schools or shopping malls. You can talk about the pros and cons of this business with established vendors to get a better idea about this business.
Choosing Vending Machine Routes
Oftentimes, you may have no option but to take up thr route sold by your vending machine seller. However, if you do have a choice, keep in mind all the points mentioned above before buying a vending machine route. One can go for existing routes which already make good business. However, in that case, you will have to bring a lot of innovation in your business considering the competition you will be facing from other businesses.
A vending machine which allows a wide selection of products or one with a larger capacity and less waiting time, becomes an instant hit amongst the customers. Alternatively, you can find other locations that have a good potential.
More often than not, people venturing in this business do not have enough time to do all these research on their own, as they are already engaged in some other business. In that case, hiring a location service can be your best option. These professional services scout locations for you and also find the rough estimate for the profit of your business. Needless to say, they charge fees for this service. Hire these services only if the fees and their terms and conditions sound reasonable to you. Also, beware of scam artists who are notorious for bluffing new, inexperienced entrepreneurs.
Having a good business plan increases your chances of gaining more profit. If you sell right products on the right routes through efficient vending machines, you can indeed grow your $100 business into a million dollar venture.