With an average entry-level cost of €1,500.00/USD$1,550.00/R27,000.00 to buy a blandly basic vending machine, as well as it's relatively low electricity and product refill monthly costs, running a vending business can prove to be a lucrative venture. With clever marketing strategy and a consistently comprehensive supply chain plan to never run out of product to sell, vending machines are arguably one of the most effective assets in generating passive income.
In most countries, it's better to form a company corporation (privately held) with any kind of business venture that involves potentially being sued by a disgruntled customer/client. If a conveniently particular packet of crisps has that one off potato chip, that causes a conveniently particular customer severe health impairment, of whom furthermore, not least to mention, is a conveniently particular kind of food critic or strong personality who enacts upon their desires for justice, then the limited liability provisions that come with privately held firms would help.
In an interesting case from October 2021, Compass Group USA and a retail technology company agreed to pay a class action suit fine to the tune of USD$6.8 million, due to proven allegations from vending machine users that biometric data was being collected, without user consent. So, the attentive nature of the vending machine user has never been in question. Which really brings us to the one major disadvantage of the vending machine business, extreme users. With enough time, frequency of vending machine use, and perhaps even enough marketing prowess, extreme users will interact with your vending machine, and potentially cause legal migraines. Nothing liability insurance can't cope with, luckily.
STEPS FOR STARTING A VENDING MACHINE BUSINESS
Step 1: Choose Your Product Basket
Choosing a product basket (a mix of food and drink you'll stock in the machine to sell) largely depends on where the vending machine is going to be physically located. If located within the vicinity of a corporate office space, perhaps light health bars, cokes, and even fruit (albeit with high preservatives to increase shelf life), might be best strategy. Outside a school or university might demand a more carefree focus on health, so more sugary items as various data out there have proven that young people tend to eat more junk food than older folk.
Step 2: Develop an Ironclad Marketing Strategy
Advertising in the vending machine business doesn't really need traditional and expensive TV commercials or what nowadays is YouTube harassing 5 second ads. Unless you've got the same budget as Pepsi, any kind of video commercial may just increase your start-up costs unnecessarily. A low-cost Instagram sponsored ad is a great go-to, especially with university students who have that kind of time to be on Instagram during the day, long enough to be triggered by that delicious Mars bar add from your vending machine.
Step 3: Cultivate a Formidable Presence in the Supply Chain Network
Like most of what we learn at school or university, it doesn't apply in the real world. This applies well when it comes to managing relationships with suppliers who are constantly seeking to provide to the highest bidders. In order to be a high bidder, you need to be turning a handsome revenue AND profit. Your revenue generating abilities, via marketing effort and good product basket management, are key in being able to consistently keep up with suppliers' ever changing cost prices for products. You may never have the same supplier each year, each 6 months, or even each quarter; that's just business.
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