A Quick Guide to Whether Vending Machines are Right for Your Business
According to VendTech Media, the average person spends about $27 per year on food and beverages dispensed from vending machines.
If that sounds like potential to you, you're not alone. When you apply a little math to this figure, you'll find that it amounts to more than 35 billion dollars annually. Put in that perspective, getting your piece of the action on this vend trend makes sense.
To help you determine if vending machines are suitable for your small business, we examine the topic from various angles.
Who Are Your Customers?
Vending machines don't discriminate. If you've got cash or a card on hand, your peanut butter cup, bag of chips, or favorite soda is in hand at the push of a button. However, where the machine is located can significantly impact users.
If your business is large enough and has more than a few employees, you might consider vending machines as an internal resource. Placing one or two in a break area could net you a continuous cash flow stream from a captive audience.
For example, if your customer traffic is external, you'll want to consider the volume of customers who have access. If you run an automotive repair shop where customers wait, you might net a steady flow of vending machine users that outperforms your employee base.
Buying or Renting?
There are two approaches to procuring a vending machine for your business. According to Vending How these are the pros and cons of buying:
- Higher profit margins
- Greater pricing flexibility
- Greater product flexibility
- Better service
- Costly up-front (machines can cost $3,000—$10,000)
- Must be willing to make or find resources for repairs
- Must be willing to purchase product and stock it regularly
If you're considering renting, here are the pros and cons according to medium.com:
- Lower up-front costs
- Vendor responsible for repairs, maintenance, and cleaning
- Ability to try out different machines
- Dependent on vendor
- Lower profit margins (vendor fees can be as much as 20%)
- Less control over products sold
You'll want to consider the factors involved when evaluating your approach carefully. If you're leaning toward buying a machine, you might be able to finance it to minimize the high upfront costs.
So, how much can your business make by adding vending machines to the mix? It depends on the scenario. If you're in a high-traffic location and offering popular food or snack items, one device could bring in up to $400 per month, according to nerdwallet.com.
More than likely, however, the typical machine generates less than half that—or $35 per month—as nerdwallet also points out. The key here is that every situation is different. And it's not unlikely to find testimonials online that boast or lament the extremes.
A discussion about vending machines in a place of business, especially a small one, isn't complete without exploring logistical considerations.
Before making any decision take a good look at your surroundings. Assess if you have the infrastructure to make vending machines viable and ask yourself:
Do I have enough space?
According to this infographic from dimensions.com, a typical beverage vending machine is four feet wide, six feet high, and nearly three feet deep. That's larger than most full-sized refrigerators.
Can my business support the load?
With an average weight of almost 800 pounds, you'll want to be sure your location has a solid foundation to support a vending machine. Moreso if you're considering more than one.
What about power considerations?
Some vending machines operate on conventional electric, requiring only a grounded outlet for a power cord. Others may have different requirements. Making sure you have the proper setup beforehand will allow you to add vending machines without logistical hiccups.
Considering a vending machine—or several—requires careful consideration. You may find the decision easier by approaching the decision with the information shared here.