As a funny aside. Now that I’ve been in vending full-time for several years now the very same people who tried to stop me from getting into a vending business have been asking me how can THEY start their own vending business. It’s the simple things in life that can be really sweet sometimes.

Evaluate your lifestyle and personal goals for the future. Then you should determine if vending (or any business) will compliment your life and help you achieve your goals. If you try to make vending fit you will only make yourself more miserable. Remember that part of financial success and breaking out of the “rat race” is to enjoy what you do. If you enjoy your business and it fits in with your personal goals you will succeed even more rapidly.

I realize that this saying has been greatly over-used but I believe because it is true. “LOVE your job and NEVER WORK another day of your life.”

If you have spent so long at a job you hate that you are not sure how to break the cycle I suggest you checkout 48 Days to the Work you Love by Dan Miller.

When starting out your vending business it is very tempting to take any and all locations that you can. Many times, and I have been there; you hit a period of time when you have more machines in your garage than you do on location. The pressure is on and you begin to take locations that are nowhere near each other. You end up spending all your time driving between sites. This eats up your time and only makes your business less efficient.

A while ago I briefly wrote about assets and liabilities. Remember that your most valuable asset is your time. Once spent you will NEVER get it back! The ultimate goal is to have the locations as close together as possible. Closer locations mean you can service more in a day. And of course the more locations you visit in a day the more you will be able to operate overall. Time is Money.

I had them in malls and bowling alleys; during the “busy” months they would gross about $300 a month. Well, guess how many “busy” months I had; about four (if I was lucky). The “off” months grossed about $150 (at best). After commissions, COGs (Cost of Goods), and other misc expenses I kept about 1.5% (about $40). To make this equation even worse I did not take into account the life of the machine. At that rate I was going I would have to have had the machines on location for over 7 years – just to break even.

A lot can happen to a machine in 7 years: parts break, people bust into them and steal your quarters, you lose locations, etc.

The reason I tell you this story is because after about a year of owning these machine I decided I wanted more machines. Because I could not afford another $9000 I figured I’d go on the Internet to see if maybe I should try to buy used machines. To my amazement I could buy the exact same machines for only $300. Not only were these machines cheaper but most of them were bought brand new, never placed on location, and just sitting to people’s garage’s. One guy even still had them in the original packaging. If I had taken the time to look first, instead of letting a sales pitch cloud my judgment I could have bought over 20 machines for what I spent on just one.

Now this does not mean that you have to immediately run out and start a corporation and hire an accountant or attorney. Quite honestly you do not need the extra overhead hassle. Hopefully you will eventually need professional services but in the beginning the rule is “keep it simple”. I do however want you to create a foundation.

Unfortunately because it is so easy to start a vending business people do not treat it seriously – and that gets them into trouble. I meet people all the time who, after 4-5 years of “spinning their wheels”, try to sell their “business” (at a premium of course) because in their mind it is a business. I always tell them the same thing when they approach me to buy their machines. They have not developed a business they only created themselves a job. They have nothing to sell but machines (many times NOT even on location). And what’s worse, they have NOTHING to show for it.

Don’t let this happen to you; treat vending as you would any business venture. If you can do that then you’ll have an asset that will be able to pay you for years and years.

Of course the question remains, “How does a child start a vending business?” My answer is that the process is not much different than I would recommend any start the business. It is only the outcome that I consider to be different. The goal isn’t as much to make money but to teach them about money, business, and even the sales process.

Get a machine or two on eBay. Buy machines for less than $100 each (hopefully much less). If you can, help place the first machine. Don’t buy a machine outright, “loan” them the money. Make them pay you “payments”. Make them keep books, calculate cost of goods, profit, loss, and ROI. Even explain how they have to pay taxes. This teaches them the pitfalls of excessive debt, the “work” required to run a business properly and how to deal with government regulation.

You will probably have to drive them from location to location but that is a small price to pay to help your budding entrepreneur get started. Remember, make the process fun and not too hard for their age. Again, the goal is for them to learn; if they earn then all the better.

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.

If you have trouble getting along with your boss and coworkers and your communication skills are not the best, perhaps you are thinking that owning and operating a successful vending machine route will be the solution to all of your problems. After all, your days would be spent counting and sorting merchandise, stocking machines, collecting money, and reordering merchandise, right?

No. You would also be contacting your locations regularly to ensure they are satisfied with your service, calling those in charge of potential new spots for expansion or replacement of under-performing ones, dealing with customers who have lost their money in your machines and possibly dealing with charities on sponsoring your machines.

There is much more selling involved in vending than the blue sky promoters, also known as biz-ops, reveal to their customers. One of the sales pitches used by biz-op and the vending machine companies is that there is “no selling”. But that’s completely false. There’s a lot of selling involved to get your vendors on location. And unfortunately, people don’t always find that out until after they have spent a lot of money on vending machines. The primary problem is the lack of persistence on the part of new operators who do not come from a sales background and are unused to making a sales presentation.

When I first speak to other vendors I’ve found that they are afraid to just walk up to someone and say “Are you happy with your current vending service?” Get out and give it a try. Once you start hearing “yes” you will get enthusiastic about it and start putting more energy into the business.

Actually, there is an entire spectrum of under-the-radar customer service behind any successful vending business, all of which requires a positive image and sufficient face time with location managers. And if you are one of those who has fallen for the idea that no selling’s involved since vending machines “sell” for you, then you have forgotten the most important item of all you need to sell: yourself.

Some people in the vending industry will try to tell you that all you have to do is lay back and collect money. Sorry but that just isn’t true. If you attempt to sit back and collect the money you will be collecting less and less as time goes on. This is due to simple attrition: businesses close or move, vandalism problems or the location owner simply doesn’t want your machines around anymore. Many people just stuff these machines in the back of the garage or basement. Pretty soon, you have very few machines making money and a lot less storage space in your house.

Mastering an ongoing location program will not only get those idle machines making money, but will increase your profit on the vending business in general. Commit to spending 10% to 20% of your time on your routes to gaining and securing new locations. If you do not have idle machine then now is either a great time to expand your business or reanalyze your current route and re-locate poor performing machines. Over time, with an ongoing locating program you will have more machines averaging more profit.

Learn more about how to locate vending machines.

I suggest you find, and buy your vending toys on eBay. There you will find all types of toys and supplies for your bulk toy vending machines. A couple things to remember:

1. Only buy from reputable sellers (100+ feedback with 99% or better rating).
2. Read the auction carefully, most sellers are very upfront about the details.
3. Always use PayPal, it is the safest way to protect yourself from fraud.
4. Buying vending toys is great but be sure to get a display too!

If you want to see the selection of vending toys on eBay click the button below:

Like all things in life vending is simple, but not easy. The concepts are very straight forward but the implementation takes some time and guts. The first step is to decide what kind of vending you want to get into. This requires you to analyze: your start-up budget, your time, and your goals (both personal and financial). If you want to have a $600K/year business your start-up will be different from someone looking to make and extra couple bucks to pay off debt (or begin investing). You also need to decide if vending is going to provide cash flow for you to invest or is it an investment in and of itself.

With bulk candy/gumball machines I never use a contract. The location would NEVER sign one anyway. Find a local store that you visit often and talk with the owner/manager. Offer the machine and a 25% commission. You can also offer to give that money to their favorite charity (most of my locations choose this option).

I believe that if you do not have the money to buy something then you probably need to fix your personal cashflow first. Because if you have poor cashflow in your personal life you will bring that into your business. I’ve noticed that many people believe that you can just “out earn” your financial problems. I do not believe this is possible – I have never seen a real lief example of someone who did not properly manage their money AND were very financially successful. Sure they may have great income but once the income ends (or is reduced) bankruptcy is right around the corner. If my income ended I would have to develop another stream but I would be just fine.

It has been my experience that you get very good machines for a fraction of their original price. My best method is to advertise in local papers (I use the local “cheap fliers”). My ad reads “Cash for your used candy, gumball, and vending machines”. I think you may be surprised how many people have vending for sale.

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