Are you looking for a business opportunity that will provide you with a passive income? Do you want to invest in something where can you gain flexibility and control of your time? If so, one of the best options is to start a small business as a vending machine owner.
However, it all starts with unanswered questions, just like any other business. The common question is, “how do I invest in a vending machine?” While asking questions is natural, it is preferable to seek answers to understand the business.
And this is where the advice provided below will come in handy as you consider purchasing a vending machine.
What Are the Things to Consider?
Before you invest in a vending machine business, consider these tips:
Evaluate the Industry
To begin, you must understand the details of the business. You don’t need rigorous or extensive training for vending machines, but you will need to conduct market research to understand the business requirements.
In other words, the foundation of your success is planning and researching the vending machine industry.
Understand Your Options
When investing in vending machines, you have two options: you can buy a vending machine franchise or an existing vending machine business. However, both of them have their pros and cons. Read on to find out more:
Franchise Vending Machine
A vending machine franchise can guarantee you a tested business. You don’t have to take matters into your own hands because most brands provide you with proper machine knowledge and assistance throughout the vending machine setup process.
You could say that purchasing a franchise vending machine comes with adequate support.
Existing Vending Machine
There are vending machine businesses that are being listed online. You can find them advertised in local newspapers and on Craigslist. Although they are already used, they still make a good choice because they’re already generating revenue.
Then again, don’t just invest in used vending machines. Consider why the owner is selling it. Perhaps there are underlying issues that need to be fixed.
Study the Location
Location is one of the essential factors in determining whether or not a vending machine business will be successful. So, if you want your business to succeed, consider checking the following qualities:
Foot Traffic
It is ideal to set up your vending machine business in a location with high foot traffic during the week, such as shopping malls, schools, airports, and train stations.
Competition Ratio
Look for a location with little to no nearby competition.
Crowded Area
Set up your vending machine in a spot where people typically wait or fall in line, such as inside a government building.
Secure Area
Find an open area where someone can always see your vending machine. This way, vandalism instances can be prevented.
Electric Outlet
Most vending machines operate on 115 volts at 10-12 amps. So, find a location with a standard three-prong electrical outlet.
Select Your Products
Another thing to consider when investing in vending machines is the product that you will be selling. Make sure that it answers the needs of the people in the area.
Are the people concerned about their food intake? Do they require food or drinks to refuel? Are they willing to eat healthy foods? By answering these questions, you should be able to decide what products to sell.
To give you an idea about what products sell, consider these options:
Drinks
- Water,
- Energy drinks,
- Caffeinated or decaffeinated coffee; and
- Carbonated beverages.
Snacks
- chips and chocolates
Recognise the Commission and Contract
If you choose a location within the premises of department stores and shopping malls, you must follow the rules and compensate them for the electricity used within the premises.
Aside from this, the property owner may ask for a commission. The amount that the property owner will receive depends on the number of vending machines installed on the premises.
To ensure that everything runs smoothly, make a legal contract out of your agreement. Here are some of the things that should be included in the contract:
- Time
- Termination terms
- Products
- Rights of the vending machine owner and location owner
The Cost Involved
The cost of the materials is part of your How-To’s in investing in a vending machine. As a starting point, here are the common expenses included in the start-up costs:
Vending Machine Equipment
Vending machines have varying prices that must be considered. The price varies depending on the type, size, and design.
Insurance and Taxation
Vending machine sales are generally taxed in the same way as items in grocery stores. Consider calculating taxes and adding them into the price when setting up your vending machine business.
Ongoing Expenses
The ongoing expenses that you will likely pay for include utility bills and maintenance costs.
Discover Your Financing Options
You will need capital to fund your business. It is the cost required to run your vending machine business daily, ensuring its long-term growth.
However, we occasionally lack funds for capital, which is why we have financing options, which include the following:
Business Credit Card
Unlike cash, you can access funds easily by just using your credit card. Aside from this, you also don’t have to worry about overspending because most cards have a credit limit.
Business Credit Line
While the business credit card can be used for personal purposes, this card is based on your business performance. Do you generate more sales? Or perhaps, is your vending machine business is a flop?
Whatever it is, it works in the same way as business credit cards, but the funding of the balance depends on how your business operates.
So, are you ready to invest in a vending machine business? Then contact us to learn more!
TCN Vending has been consistently recognised for providing the best service to vending machine owners. Our team is versatile enough to meet your machine preferences, from ready-made to customised machines.
What more? We can also assure you that we understand how vending machines work in Australia due to our years of experience in the industry. So, you can put your trust in TCN Vending!
If you have any further questions about how to invest in a vending machine, please get in touch with us on 1800 959 910 or enquiries@tcnvending.com.au, and you will be directed to our vending machine industry’s experts.