The Costs Involved in Operating Food and Drink Vending Machines

Costs Food and Drink Vending Machines

Operating food and drink vending machines has become among the most popular business ventures today in Australia. Its popularity is credited to the convenience and accessibility the nature of the business offers.

And because getting into the vending machine industry is so quick and easy, the costs and expenses involved are often overlooked.

The thing is, the exact cost of operating any type of business, be it vending machines or not, will be dependent on a few factors. As for the case of vending machines, the initial costs are hugely dependent on the type of machine that you want to operate and how many you want to start with. But don’t worry because we’ll dig deeper into these costs below.

Below are four of the common costs associated with operating food and drink vending machines. Hopefully, after reading this article, you can make an informed decision about whether or not the vending machine business is really for you.

1. The Start UpCosts

The start-up costs associated with operating a vending machine includes the cost of the machine itself and the stocks to fill it. These vending machines can cost hundreds to thousands of dollars. But if you opt for refurbished ones, you will definitely have better savings.

Among all types of food vending machines, candy and gumball machines are the least expensive. In fact, you can purchase one for less than a thousand dollars. Snack, beverage, and combo vending machines, on the other hand, are more expensive with models starting at a price of several thousands of dollars.

As you can see, the start-up costs are dependent on the type of machine you want to operate. Though the initial investment for a vending machine business is substantial, it’s still lower compared to other industries. So, it’s really not surprising why many people think this business is worth venturing into.

2. The Ongoing Costs

The ongoing costs of operating vending machines include general liability insurance, administrative costs, and the cost of buying the stocks. Monthly rentals and commissions are only optional.

Although it is common for some vending machine owners to pay monthly rentals and commissions to the owners of the space where the machine is put up, it’s not a universal expense. So, it’s not really considered an ongoing cost. If you own the space, then it means you get to spare yourself from paying such add-on fees.

For owners who own multiple vending machines, another expense is the fuel cost. They will have to travel to where their machines have been put up as they need to check on them once in a while to everything is working just fine.

Other potential ongoing costs are transaction fees. This applies to vending machines that accept debit and credit cards.

3. Maintenance and Service Costs

According to experts, a typical vending machine requires a fortnightly inventory. However, if the stocks run out quickly, you can always re-stock any time you want.

While some owners of vending machines choose to manage the inventory task themselves, others prefer to hire external providers to take care of the restocking job for them. Not only is it a convenient option. It also saves them hundreds of dollars as these companies often sell a wide range of products at a lower price.

Now, it is worth noting that the servicing required by the machine depends on certain factors. But in most cases, the location where the machine is installed and the traffic in the area are considered the primary factors. If it’s installed in crowded and busy places like schools and parks, then you might want to service your machines more often.

The frequency of the service also depends on the products that are dispensed by the machine. Vending machines that stock perishable products require frequent servicing. The same applies to machines that dispense coffee as it needs to be cleaned every now and then.

As for maintenance, this includes the cost of the parts that need to be repaired, as well as the repair charges asked by the contractor. Remember that you are completely responsible for the repair costs if it gets broken outside the warranty period.

Well, even if you think that your vending machines are in good running condition, we still recommend regular maintenance checks. This way, future problems are prevented.

4. Taxes

As with all business types, owners of vending machines need to pay taxes. These taxes vary depending on the area your machine is located.

Before you can even start operating a vending machine, you might be asked to obtain a tax license and some decal stickers for your machine. After all, it is still considered a business, and businesses are required to comply with laws and regulations.

Sometimes, owners might also be subject to added state and county taxes based on the revenue generated by the vending machine.

Wrapping Up

It is true that operating food and drink vending machines is profitable. But if you want to succeed, you need to understand the ins and outs of the business and be wary of the costs involved. And as soon as you have made up your mind and decided to venture into this rewarding business, please reach out to TCN Vending Australia. We might just be able to help you with your vending machine needs.