As with any business venture, having the right product in the right place at the right time is key. Vending is highly appealing because of the low start-up cost, low working capital and low overheads. This is a cash business, with you collecting the money when you replenish supplies which must be done frequently.
Location is very important
The key to a successful vending machine business is selecting the right location. A good location not only requires lots of foot traffic, it must be visible to passers-by and easy to access. The location should also be within easy traveling distance from where you live. Once your sites are up and running, you will be required to keep them stocked with products on a regular basis. At the same time you will “cash” the machine.
A well stocked and maintained machine, on average, makes a profit of around R1500 per month. For example if you run five machines a month you could generate a profit of R 7 500 a month and 10 machines could generate up to R15 000 a month.
Profitability depends on foot traffic. The best location combines visibility, and the right choice of product. Factories, offices, hospitals, schools and universities would all benefit from having a snack/cooldrink vending machine on their premises.
Many businesses see snack vending machines on their premises as an advantage as this often reduces the amount of absenteeism whilst employees go to shops for a snack during working hours. According to the Vending Association of South Africa, “Approximately 10% of all the people on a site will use a vending machine.
These clients will not necessarily only buy one item, such as a can of a soft drink, but also a packet of crisps and maybe even a chocolate… generating three sales. Thus a site of 100 people may generate anything from 10 to 30 sales per day.
This once again is not a hard and fast rule. There may and will be sites with 50 people that generate 100 sales per day, while there may be sites with 200 people that only generate 30 sales per day”.
A good vending machine supplier must offer:
Training which should include training on mechanical aspects of the equipment, how to adjust the coin mechanisms and taught how to carry out routine service and repairs.
- Delivery and set-up of machines
- Assistance with financial applications
- Full technical support and backup
- Product selection and the right to purchase stock from any supplier (so you can shop around for the best prices
Contact the Vending Association of VASA for guidance. They do not trade, sell machines or products, but provide advice, know how and suggestions free of charge, totally unbiased as a service to the Industry and to those interested in Vending.
The renting option
If you cannot raise enough money to buy your own vending machines you can rent them. There are other companies who offer rentals. Vendtec located in Gauteng offer a rental programme from R500 per month per machine.
Raising enough money to buy machines
If you do not have any collateral and are unemployed, it will be difficult to find finance. Banks won’t lend money unless you have some form of security in the form of investments, property, or insurance policies. Some of the larger Vending companies offer their own finance programmes and maybe will to help.