Tell me about the vending machine business.

Factual Questions
1

My mom is retiring and is already looking for things to do with her retirement time. I guess relaxing and travelling or not in the equation. She is thinking of investing in a vending machine or a couple, I’m not really sure how it works. My mom was supposed to go to this seminar by some corporation down in Florida (Boca Rotan, I think). I wish I could remember the name, but my mom called me right before a big meeting and I didn’t write it down.

How is owning/operating a vending machine as a business? It doesn’t seem to be fairly complex, especially if you don’t have to stock it yourself. The brochure my mom got made it seem as simple as collecting money from the machine.

2

Sorry, not a well informed answer, but my sense is that it can be fairly lucrative in so much as snack and sodas can be bought in bulk and marked up considerably. I think the hard thing is finding places that will allow you to place your machine there. Many places either don’t want one because they’re an eyesore or potential security risk, or (perhaps more commonly) already have an agreement/relationship with someone who owns a machine.

3

Oh, and I forgot to add that I assume it’s analogous to selling vacuum cleaners door to door. People either don’t want/need one or already have one. You’re basically trying to capitalize on a) someone who was just about to go buy one, or b) can be talked into buying one or a better one.

I’m sure that once they’re in place you can make some good money off them provided they don’t break down much.

4

There is certainly money to be made in vending machines. But in order to do so, you have to be a pro at it. My advice is this… if she wants to get into the vending machine business, she should try to get hired on to an existing (and successful) vending company. She should work for them for about a year. During this time she will learn about the business. Afterwards, she should quit and start her own vending business.

As far as those vending machine seminars go… tell her to stay far away from those deals. They’re only out to rip her off. She will have to pony up large amounts of money for their “assistance” in buying machines and finding locations, and the locations are usually terrible. Many of these outfits are also in the business of selling small, crappy machines for way too much money.

I once had a friend who attend one of those seminars. He was all excited about it. I then asked him a few questions. The conversation went like this:

Him: I just got back from a vending business seminar at the Holiday Inn. I need to pay them quite a bit up money up front, but there’s lots of money to be made in it.

Me: Hmm. So they will help you buy machines and install them in prime locations?

Him: Yep.

Me: So, this company… what do they need you for?

Him: Huh?

Me: What do they need you for?

Him: Um, well, they need me to buy the machines and collect the money and stuff.

Me: If the machines are so great, and the locations are prime, why doesn’t the company install the machines in these locations? And keep all the profits for itself? What do they need you for?

Him: Um, well, um, maybe they need my money for the machines?

Me: You mean this company doesn’t have enough money to buy the machines they want to sell you?? Huh?? Something doesn’t add up. So again, if there’s so much money to be made in the vending business, why doesn’t this company install the machines in the “prime” locations and keep all the profits for itself? What do they need you for?

Him: Um, hmm…

5

I had a friend who also went to one of the seminars - he was thinking the same way until he saw how much they wanted for the machines - Crafter Man is right - if they really did have all of these great locations, they could drop their own machines in there and just rake in the dough.

6

Besides the things already mentioned, I would like to add that there are a few more things to consider:

  1. Its a lot harder than it seems to fill vending machines
  2. Carrying cash around that you collect from vending machines can be dangerous
  3. Counting & sorting coins is time consuming and generally requires more equipment
  4. Carrying large amounts of coin to the bank is a pain - its heavy & also quite obvious
  5. Handling cash is really, really dirty
  6. When someone gets pissed at a vending machine & trashes it, guess who gets to pay the bill?

I could go on, but it is a really tough job. I watched what my father went through with this kind of business. I participated in the business for a while when I was in college. It really sucks.

7

INHO she would do better to get a realestate licnese and work for a local broker.
Vending machines are expensive to start, have to be restocked often, have good locations and permission or leased space etc.
She & you should talk in person with someone in the business already.
My opinion is that the seminar is to SELL machines first and foremost.
A search of the internet and inquiries to those dealing with the company may be revealing. Proceed cautiously!

8

My Mom and Dad used to own a bunch of gumball machines and they didn’t have “real” jobs. So, that goes to tell you, they made out pretty well.

9

I dealt with a guy who did this, with his family for a living. He said the profits were pretty slim overall, and the headaches were considerable. Constant calls for jammed/broken machines, people want Pepsi instead of Coke, people want Coke instead of Pepsi, blah blah blah.

There is money to be made, for sure. But it ain’t as easy as it might seem.

10

I used to deal with vending machines all the time as an arcade tech at an amusement park. Loading and money handling can be annoying but I would not call it hard. With a little creative math and preparation you can make it much easier to handle loading. A decent PDA and spreadsheet software can make it pretty easy to forecast about how much product you will need to cart in to any given stop as well as note revenues from each stop since many machines can tell you how much money they took in.

Alot of the biggest headaches are from poor preparation or overzealous buying of semi-perishable product. Plan on part of your day being a trip to your candy supplier until you have a handle on your inventory needs. Don’t keep more than a days worth of candy especially chocolate stuff in your vehicle unless you want a long stop fixing a machine to equal dead inventory. Watch for sales on sodas at big chain grocery stores and buy a bunch, it will be cheaper than you can buy it from pepsi/coke directly because the stores deal WAY more volume than you will any time soon. Store diet stuff in a cool area, the artificial sweetners break down if kept in 100+ degree environments for very long.

One of the nice things about vending routes is you don’t really have to be much of a people person. As long as you can turn it on for a few minutes when you need to pitch to a new location you should be ok.

11

I work on the amusement side not the vending side of coin-op.

I’ll assume your mom is considering gumball machines and not full size vending machines. A full size truck with a lift gate and an industrial strength hand truck is needed for vending machines. Anyway, gumball machines would be a good start to find out about the business. Any of the small, impulse, machines could do, gumballs, candy, stickers, phone cards, etc. Something that fits into the trunk of your car. Plus a gumball machine is easy to fix. I make my living by repairing coin-op machines and I don’t come cheap. :wink:

Buy a machine and then find a location. Finding a location is the toughest part. You have to knock on a lot of doors. And then you have to keep the location. Its a service industry so your service has to be better than your competitors.

Vending Times is a trade publication. Your mom will want a copy.

Super Auctions is a good place to find used machines. See me at the ones in Orlando.

Oak makes gumball machines.

12

My father in law is in the vending business and I can tell you, it is work. However, he pulls in six figures with it, so there is money to be had. His situation is a bit different, however, than what other people can get.

My FIL is visually impaired, so the state blind commission set him up with what they call a Blind Enterprise Program. The State of Texas owns the machines and usually owns the locations. In his case, his machines are at two very busy highway rest stops. My FIL owns the inventory and equipment other than the actual machine. In excange for this, he pays the BEP a percentage of the take each month. He also pays taxes, like every other American.

The work can be hard. There is lots of lifting of crates of sodas, chips, candy, etc. Being blind, he cannot drive himself. He also is in a wheelchair, so lifting the stuff isn’t too easy. My mother in law used to help with this, but now he pays an assistant to drive and help manage the load. That is another expense. My FIL goes along to check on the inventory and to make sure his help doesn’t run off with the money. The money unloaded is substantial. Remember, that is heavy too. A thousand dollars in quarters weighs more than a few pounds. You then have to get it home, dump it into the sorter/counter, roll it, bag it, and get it to the bank.

IMHO, this isn’t really a retiree type of job. I would be suspicious of a company having this meeting in Florida. Florida is, after all, the land of retirees with lots of money. That must draw an awful lot of bottom feeders to the area.

[I’m not knocking Florida’s fine citizenry. I’m sure there are many wonderful people of all ages. ]

13

It must be lucrative - I have neighbors who once said that’s what they do and they’re always home. Meaning it must not be a 9 to 5 kinda thing and it would appear that the time spent is minimal, since, 'cause, they’re always home.