Beware of Vending Biz-Opp Scams
This is my site Written by The Vending Guy on November 30, 2008 – 5:36 pm


I guess it was inevitable with all the fear in this economy that the vending Biz-Opp promoters would begin to come out in force. Buying an “packaged deals” or existing route might seem to be the fastest way to get your feet wet in the vending business, but unless you use extreme caution, you could easily be taken for thousands of dollars of your hard earner money. These scams are known in the vending industry as the Blue Sky, or Biz-Ops, and the established routes are actually established after they get your money. The companies charge may times more than what the machines and routes are actually worth. To make matters worse, the locations they offer to provide are dubious at best. It is easy to be tricked by these promoters, who are experts in twisting the truth to fit their sales pitches, particularly in the amount of money a new vending operator can expect to make.

 

They say they can’t guarantee you how much money you will make, so they will show you the industry statistics. The vending promoter gives you industry averages that do not match the machines they are trying to sell you. They put up sales figures for the types of locations that newbies would never get; rather, these are locations that are gotten by full-time vending location management companies.

It is not just the uneducated they are after, however. Biz-opp promoters attempt to trick all kinds of people, especially retirees who have finally built up a nest egg and successful professionals with cash to burn and dream of owning their own business.

The industry is filled with the failures and the success stories of those who either gave up after falling for the Blue Sky or turned their scams into profitable businesses with hard work. The rule of thumb to remember if it is “too good to be true” is exactly what it says.

 


All of this is not to say that you cannot find a vendor out there who is ready to retire or simply change professions and wants to sell his routes. Years of experience and dedication do not come cheap, though, and an established vending route could cost you up to three or four times its net profit. Unless you are a good negotiator or investing a lot of cold, hard cash, you could spend three or four years paying off the existing routes you bought.

The advantage of buying an existing route is that you do not have to wait for the revenue to grow because you are buying into an existing, money-producing business. You can concentrate, instead, on finding better wholesale prices on your merchandise, slowly stocking the machines with more profitable items and changing out older machines for newer, larger capacity ones.

Before exchanging any money and to ensure a smooth transition, you should insist that vendor you are buying from take you around to every location and introduce you to the managers. In this way, you can begin to form you own relationships with them and see if the locations are as busy or profitable as the vendor says. You can also use the time to note if there is any room for growth or additional machines at the locations for future sales pitches to the managers.

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4 Responses »

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