the ultimate insider’s guide to owning a -...
TRANSCRIPT
The Ultimate Insider’s Guide to Owning a
Healthy Vending Business
Looking to get into the vending machine business? Want to learn all the ins and outs of how to make passive income while enjoying incredible freedom in your life?
You’ve made the right move.
I wrote this guide to help you avoid all the mistakes I made when I started my vending machine business in 2002 AND to get the most leverage, freedom, and enjoyment from it.
Let’s face it, while it sounds simple, learning how to start a vending machine business can be a bit overwhelming. But there are a ton of great reasons to get started now.
The most common reasons why so many entrepreneurs get into the vending business include:
1. You become your own boss. 2. Today’s hard work earns money for you, not someone else. 3. You gain the freedom to spend time doing the thing you want. 4. You have control over your destiny. 5. Your business has a positive impact on the community.
And that’s what this Guide is all about.
You can gain more control over your life, enjoy more flexibility, achieve a higher income potential, and secure your family’s future.
And you don’t have to worry about making the wrong business start-up decision and falling flat on your face.
All you need to do is read this guide, understand what starting a vending machine business is all about, and determine if this business is aligned with what you want to do and who you are. (Hint: the first question isn’t how, it’s why.)
But first…
Before you even start researching where you can even buy vending machines from, think about this:
What is a successful vending venture really built on? Selling product? Minimizing cost? Locking down every location known to man?
Actually—and perhaps surprisingly— the answer isn’t any of these things.
Rather, any and every successful vending business is built upon an unwavering dedication to providing value at every step.
Some people call this “customer service.” We call it being a “WOW Technician”; that is, someone who can methodically and consistently deliver service, products, and results that leave locations and customers saying “WOW!”
It’s a simple concept: value received always follows value provided.
This guide will give you the necessary skill set to make this happen. To receive the value you seek, it will be on you to meet this challenge and “walk the talk.”
In This Guide You’ll Learn:
Chapter 1: Why Vending (Before you begin any business venture you must know why you’re doing it) Chapter 2: Vending Machine Equipment (What type of technology can help you get ahead of traditional vendor and work more efficiently) Chapter 3: Vending Machine Locations (The secret to finding and securing contracts with only the most profitable locations for your vending machines) Chapter 4: Vending Machine Products (Learn the best distributors and wholesale outlets to get products for your vending machines)
Chapter 5: Customer Service (How to create long lasting relationships with your accounts so that you keep their business for life) Chapter 6: Startup Strategy (Discover the different types of vending business startup options out there and which one is best suited for you and your appetite for risk)
Who Are We?
HUMAN (“Helping Unite Mankind And Nutrition”) is a one-of-a-kind
nutritional distribution platform that uses healthy vending machines to
bring convenient, healthier, and better-for-you foods and drinks to
people across the nation.
We're the original pioneers of healthy vending in North America (we
started our first vending route in 2002) and we’ve grown to be an Inc.
500 "Fastest Growing Company" in America.
The healthy vending movement has been increasing rapidly in the last decade and there are no signs of it slowing down.
We’ve been fortunate enough to team-up with the best partners,
suppliers, and operators across the country to pursue our ambitious
vision of creating "Easy Nutrition Everywhere" and "making healthy
food more convenient than junk food."
Why We Wrote This Guide
While there seems to be a massive amount of information available on the internet, much of it is outdated, contradictory, or lacks detailed, actionable steps on how to actually launch a vending machine business. This has frustrated me over the years, because I've made a ton of mistakes launching my own vending business and I wish I had a resource back then to help me avoid the pitfalls.
This guide will give you a detailed resource so you don't have to make the same mistakes I did!
With the huge technological advancements made over the last decade,
the vending industry has also seen quite a bit of improvement in
technology...but nobody seems to be talking about it.
These amazing new technologies are aimed to help you, the vending
business owner, and you need to know about them if you want to get
ahead of your competition.
As the healthy vending experts, we know a lot about this stuff. We put
this complete Guide together to make it easier for you to learn not just
how to start a vending machine business, but all the options available at
your fingertips to improve your chances for success.
Before You Get Started, Consider This
What's a complete guide without some industry stats? Here are some
eye-opening numbers about the vending industry:
There is an estimated 4.6 million vending machines in the United
States right now
Sales of healthier snacks outpace traditional snack foods (i.e. junk
food) by 3x, but most vending machines operators still stock their
machines full of traditional junk food
The first American vending machine sold gum. The first English
vending machine sold apples and postcards.
About 30% of total vending machine sales come from schools (see
our chapter on vending machine products to see how new rules
implemented in 2015 have changed the types of products that can
be sold in schools)
55.1% of vending machines are placed in offices or manufacturing
buildings
You can sell just about anything out of a vending machine.
What Does a Typical Day Look Like When You Own a Vending Business?
This is a question that a lot people ask before they get into the nitty-
gritty of what it takes to run a successful vending machine business.
Here’s a quick overview:
Your day will typically start by viewing the backend remote monitoring
system to see which locations are low on product and need to be
restocked.
Next will be printing out reports that tell you how many of each product
you need (called “Pick Lists”), loading your products into bins, and
loading them up into your vehicle.
Then you’ll hit the road where you get to interact with your customers,
provide a couple of “wow moments”, and of course, restock and service
your machines.
Here’s a typical service schedule:
Empty the cash box
Refill the coin mechanism with dimes, nickels, quarters, and dollar
coins
Restock all products in the machine
Wipe down the glass on the front of the machine
Once you’ve completed that, it’s time to get back on the road and visit
your next location!
After servicing your route for the day, other daily activities might
include reordering products, accounting activities, and inventory
management.
Watch this “Day In The Life” video that we created that follows one of
our vending operators!
The Top 5 Facts and Fallacies About This Business
FALLACY: Growing quickly in a new industry is too challenging.
FACT: Embracing challenges as growth opportunities is the only way to
discover what you’re capable of.
FALLACY: I have to master every facet of the vending world before I’ll
be successful.
FACT: You need unwavering integrity, a focus on “WOW” service, and a
growth mindset for continual, BITE-sized advancement.
FALLACY: The conditions in my area aren’t good to grow a vending
business
FACT: The conditions will vary from market to market and some will be
more challenging than others, but proper planning, effort, and self
motivation ensure that any conditions can be favorable.
FALLACY: If I own a vending business the money will come.
FACT: The money is there for the taking, but you must work to earn it.
FALLACY: I need an unattainable amount of capital to setup and grow
my vending business properly.
FACT: Properly growing a business requires a methodical approach to
converting leads and optimizing the initial business.
Other Frequently Asked Questions
How often will I need to service my machines?
If you are in high-traffic, high-producing locations, you will typically
service your machines 1-3 times per week. Servicing a machine does not
require a lot of time (typically 15 minutes or less), but maintaining a
well-stocked and clean machine is an absolute must. Otherwise, your
sales will suffer.
What type of licensing, paperwork and insurance will I need?
Each state has different regulations and licensing for vending
businesses, so you will need to contact your local licensing department.
It is also highly recommended to purchase insurance for your machines
in case of vandalism or natural disasters.
Do I need a truck or large vehicle to service my machines?
With only a handful of machines, a larger service vehicle will not be
necessary. However, if you’re serious about growing your route, you
will eventually need a larger vehicle to transport product.
With that, let’s hop into Chapter 1…
Chapter 1 - Why Do You Want to Start a Vending Machine Business?
It all starts with your "WHY".
Perhaps you’ve done a little homework and you think the $42 billion-
dollar vending industry might be the right fit for you.
Maybe vending sparked your interest because you heard it has less
overhead, no rent or electricity bills, and more flexibility than
businesses in other industries. Perhaps you like the idea of a permanent
escape from the office where you can interact with your neighbors and
make an impact on your community.
Before you continue down the wrong path, it’s important to
know why you want to get into this business.
The last thing you would want to do is invest a lot of time and money,
work your tail off for 5 years, and then suddenly realize that you made
the wrong decision because it doesn’t actually align with your long-
term goals.
The Why Factors
There are a lot of factors that come into play to start and manage a
successful vending machine business – a lot more than most people
originally think.
Naturally, there’s a lot of discussion surrounding which vending
strategies are best and which ones to avoid — for example, should you
go it alone, buy an existing route, buy into a business opportunity or a
franchise?
Ironically, it seems like the only thing people aren’t talking about
are THE WHY FACTORS.
This prompts an important question. Given the same material, strategy,
and support, why does one person succeed while another person fails?
One reason: they forgot to account for their why factor. In other words,
they chose a strategy that was misaligned with their ultimate goals.
Ask Yourself These Critical Questions:
1. What’s my Purpose Factor
What do you want your vending business to accomplish —
personally, professionally, and societally? Understanding what
you want to achieve is crucial to your ability to choose the best
business strategy for you.
Here are a couple “purpose factor” examples:
More flexibility in your schedule
More control over financial future
Better ability to provide for your family
Desire to help people/make a difference
More time with your family
Retirement Income
The list goes on. Before deciding anything else, ask yourself what
is your end goal (i.e. purpose factor)?
This will make your decisions down the road easier and keep you focused when....
2. What’s My Time Factor?
Determine how much time you have to invest in your business.
Most people will start one of two ways:
They’ll quit their job and jump into the business full-time.
Usually people in this scenario have built up enough savings
that they can manage without the income from their job for
6-12 months.
They need the income from their current job, so they start a
vending business by working on nights, weekends, and
during lunch breaks.
Realistically, do you have the available time to do all of that work
yourself? Does that time-investment align with your motivation
for starting this business? Do you need a partner? Would you
prefer some business support?
Consider this example: you choose to buy and self-operate a 50
machine vending route because the numbers make sense and it’s
a smart business decision.
However, the main reason you wanted to start a business was so
that you could spend more time with your family. Now you are the
owner of a lucrative vending business that keeps you away from
home 80 hours a week.
Have you accomplished what you wanted? If the answer is "no",
then you need to hire a route driver to handle the day to day of
your route.
Make sure to understand your time-investment level BEFORE you
start evaluating business opportunities.
3. What’s My Money Factor?
Everyone who gets into this business (or any business) will have a
level of financial investment that they’re willing to put into it. So
you’ll need to determine how much you’re willing to invest in this
new business of yours.
Note that this answer will depend on a couple of other factors.
Generally speaking, the more support offered by a business
opportunity, the more expensive. And vice versa. But, that
investment might be more beneficial for you, depending on your
why, and your time-investment level.
In other words, don’t make the mistake of choosing a business
option solely based on your initial expenses without considering
the other important factors.
Understand the difference between what you want to invest, or
finance, and what you can invest. Write down both numbers and
keep them in mind as you continue to read through this guide.
It’s important to understand your answers to these questions
before analyzing business opportunities and franchises. There are
a lot of factors to consider, but the process will be a lot easier if
you know what you want and what you need to start this
business.
Key Takeaways from Chapter 1
1. Know your “why” before you start researching your “how” and “what”
2. Purpose, time & money are the 3 pillars that make up your why factor
Chapter 2 - How To Choose The Right Vending Machine Equipment
We’ve seen a lot of new vending business owners make the mistake of
buying their vending machines before they even secure a location.
What’s the problem with this strategy?
Let’s say you decided to buy some very basic coil operated vending
machines without credit card readers BEFORE you landed any locations.
Then you find an amazing opportunity to place a vending machine in an
office building.
Since you already bought your machines, you decide to place one of
these cash only machines in the office building.
What happens now?
Your demographic at this location (i.e. working adults) doesn’t typically
carry around loose change and dollar bills, so you lose out on a
considerable amount of would-be sales had your machine accepted
credit cards.
One of your ultimate goals while running a vending business is to
maximize profits. Locations are interested in finding full service
solutions. That will almost always be the big picture goal for them – and
by extension, this should also be your big picture goal.
By securing a location prior to buying a machine, you might have a
better chance of being able to fill that location’s needs and desires.
The New Era of Vending
Take a look at the industry to get a better idea. Standard vending
machines, stocked with candy, junk food or soda, are no longer the only
options available. Healthy vending machines, fresh-food dispensing
machines, and other types of equipment are part of the mix.
Many vending services offer a variety of machine options so they can
supply each location with the options they want. This goes beyond just
the products.
Not everyone carries cash nowadays. Many people carry only plastic.
Therefore, many types of vending machines now include the ability to
pay with a credit or debit card, and even smartphones.
Your ability to supply a full range of options to a location will give you
an edge when securing the deal, and it’s also crucial to making sure the
machines get used regularly.
Credit Card Readers & Remote Monitoring
Most new vending machines include credit card readers equipped with
remote monitoring. This can come in handy because you receive a
complete overview of your exact sales figures and product inventory, all
while improving customer convenience.
Plus, you can log-in from home and see what is being sold in your
machines…which also gives you intelligence on when to go and restock
your machines. This is incredibly valuable information to have every
day. It saves trips, fuel, and time.
If you think credit card readers aren’t necessary on your vending
machines, you may want to think again. Vending Market Watch recently
found that average annual cashless sales have increased 28% over the
last year, and that the average consumer is spending 32% more when
they pay with credit versus cash.
Two companies produce the top credit card reader and remote
monitoring systems on the market:
USA Technologies and Nayax
Here are the major differences we’ve experienced between these 2 technologies:
Unique to USA Technologies
Responsive customer service
USALive (your online reporting platform where you can view
sales and inventory) updates your sales & inventory data near
instantly due to MBD (multi-drop bus) reporting versus
DEX(digital exchange) reporting
USALive is rudimentary compared to Nayax Business Intelligence
(Nayax’s online reporting platform), most notably in inventory
tracking. In USALive you cannot list products by name and have to
go through a “mapping” process during machine set-up to tell the
system how to display your selection numbers
Unique to Nayax
Less responsive customer service compared to USA Technologies
Nayax BI updates your sales and inventory data 4 times per day,
using DEX reporting
Nayax BI is robust compared to USALive and is user-friendly. It
has more advanced features such as route management and
inventory management that allows you to build planograms and
view inventory using product names without having to
manipulate the reports in Microsoft Excel
Nayax has not announced plans to implement a loyalty card
system (as of this writing)
The other major thing to note is the pricing between the two
services. USA Technologies charges $9.95 per month per machine,
as compared to $11.99 per month per machine with Nayax.
Digital LCD Screens
A more educated consumer is a more loyal & health-conscious
consumer, helping to increase sales. Digital LCD screens make it
possible for this essential element.
The LCD screen also adds another potential revenue stream to the
operator’s business, allows for local targeted advertising and messaging,
and makes the machine more eye catching and attractive.
Most vending machine manufacturers do not have the LCD screen
option available as an upgrade, so you will need to work someone who
has experience customizing vending machines.
Key Takeaways
1. Don’t buy your vending machines until you know the type of location and their needs (covered more in the next chapter)
2. Credit card readers and remote monitoring are no longer a “nice to have”. They're vital for growing and optimizing your business
3. Digital LCD screens can help your machines stand out and give you the opportunity to generate extra income by displaying ads
Chapter 3 - How to Secure The Most Profitable Vending Machine Locations
Like they say in real estate, the most important thing is location, location, location!
Locations with a lot of foot traffic (like schools and large offices) make
the best vending machine locations.
Read this chapter to understand how to secure the most profitable
locations for your vending machine business.
8 Essential Tips for Acquiring Great Vending Machine Locations
1. Generate high quality leads
Leads, leads, leads, leads. The discovery of potential locations has
been, currently is, and will always be the absolute lifeblood of
your business’ success. Optimization or product mix at existing
locations is massively important as well but won’t mean anything
unless you actually have locations to call your own!
The vending machine business is essentially a “location
generation” business. While there are many other things involved,
you won’t get very far unless this first part is taken care of.
As with many aspects of growing your business, lead
generation is not a “one and done” step, but rather something
that is both ongoing and cyclical in nature. Simply put: lead
generation never ends!
Proper lead generation is a combination of prospecting, finding
and contacting leads through specified research of who could
benefit from your business, and marketing/promoting your
business in a way in which leads find you.
When tied together and used effectively, setting vending machine
placement meetings with qualified locations will be as efficient as
possible.
INSIDER TIP: You’re NOT in the vending business. You are in the lead generation business—specializing in vending.
2. Have a plan
Before making contact with a qualified location, you need to plan
your contact strategy. To do this, you need to clearly define what
your primary objectives are for any given meeting. Understand
the location’s needs and create a basic proposal for how your
vending business might meet the needs of this location.
For example, would the location’s patrons want snack and drink
machines, or just snack machines? Would the location be
interested in a coffee vending machine?
3. Qualify Leads
Not every location or lead is created equal. Time is valuable and
you should only take meetings with locations that meet your basic
criteria.
To do this, you must be able to see through your
location’s/contact’s eyes in order to properly discover, which
requires a particular line of questioning that gathers facts.
Good questions to ask include:
What is the location’s estimated daily foot traffic
Do they currently provide vending or food service options? If
so, who is their vendor?
Do they have a contract with their current vendor? If so, how
much longer are the locked in for and how happy are they with
their current service?
Do they currently receive a commission from vending machine
sales? If so, how much are they receiving?
Additional services being provided by their current vendor?
These are all of these vital pieces of information should be
collected during the discovery phase. Record every detail.
Avoid asking open-ended questions. Rather, ask questions that
help you collect the simple, yet vital information pieces that are
fact-based.
4. Engage
In order to set meetings and build business relationships, you’ll
sometimes need to speak with the same person over and over
again.
To keep things unique and fresh, we recommend that you
diversify your methods of communication in order to (a) make the
process more enjoyable for the contact, and (b) yield higher
results for yourself.
Variety creates novelty, and your outbound communication
model should be geared to capitalize on that one very small,
yet very important concept.
As the saying goes, “before people will care about how much you
know, they must first know how much you care.” Accomplishing
this requires you to take the time, before you begin discussing the
specifics of business, to establish a level of trust and personal
connection.
The goal is to cultivate real, meaningful relationships that lead to
customers wanting to do business with you because of who you
are, not feeling obligated to do so because of what you offer.
INSIDER TIP: Write a value proposition that shows who you are and what you’re trying to accomplish. Make sure every piece of
communication you have with potential locations includes this message.
5. Scheduling Appointments and Attending Meetings
Write down your cadence of written and verbal touch points.
For example, Touch #1 = small box of healthy snacks mailed to
your prospect, Touch #2 = a phone call following up on the box
you mailed, Touch #3 = an email notifying your prospect you just
left them a voicemail.
The purpose of this strategy is to bring your business to the
attention of target locations as quickly and efficiently as possible.
Once you get them on the phone, the best strategy to set the
appointment is to come prepared to deliver information that is
highly personalized, relevant, and powerful.
You’ve connected personally, you’ve qualified them, you know
their pain points, you’ve figured out exactly what they’re looking
for and WHY they’re looking for it, and you know any limiting
factors they may have.
Now it’s time to make your program work for them. When done
properly, there should be no reason for your customer to hesitate.
INSIDER TIP: Follow-up is crucial. There are plenty of people in
this world who can sit down at a desk and talk to a stranger about a
vending program. But there are very few people in this world who
can remember, and make the effort, to forward a copy of a hiking
trail that their customer might like, or send a keychain with the
contact’s favorite sports team’s logo on it. These details don’t
happen by chance but they do make all the difference in the world.
6. Handling Objections
Once you’ve built a foundation with a potential location, it’s time
to get a bit deeper. Take a look at why the variables exist, what
they mean for the location AND for you, and where the large
opportunity lies.
Getting there requires you to activate the second level of
questioning, which is known as Iceberg Questioning.
During this line of questioning, you are able to get to the core of
what any customer truly desires, and what they cherish.
This will provide invaluable insight into what pain point your
vending business can solve. This can come in very handy for
objections down the line.
7. Closing The Deal
Perhaps you’ve had a meeting or two already, or perhaps not.
Either way, today is the day that you’re getting a “yes”. Approach
it in the wrong way, and you’ll be politely shown the door.
In other words, the contact will become a “dead lead.” If done
well, you have the ability to not only secure a location’s interest,
but to create a partner that will help you grow your business!
INSIDER TIP #1: Make sure to come with all the appropriate
material. Seems silly to even say, but you’d be surprised how many
people don’t check to see if they have all the supplemental materials
they might need. The machine is great to talk about, but it’s even
more impressive if you have a one-page description to hand them or
a life-sized banner to pull out.
INSIDER TIP #2: Use Social Proof. When people can see that
others in their same situation have had success with what you’re
proposing, they are prone to buy. Social proof also provides you
with a network of success stories to fall back on when growing your
business. Use those successes as much as possible!
INSIDER TIP #3: Don’t Expect A Big Finale. When most people
think of “closing” a machine placement meeting, they imagine it’s
this big dramatic moment at the end where someone stands up and
shouts, “So, are you in or out?!?” This isn’t the case. Ask questions
throughout the meeting. Make sure they understand your proposal,
and get small confirmations that they could benefit from each
aspect. This method gets the location to (a) close themselves and
creates their own “buying” desire and (b) will show you what their
primary hesitation points might be.
Simple questions such as, “Do you see how our program can
provide the right products, at a price that works for you?” or “Is it
clear how I can provide you with better commissions and a higher
level of service compared to your current vendor?” slowly build
your case. The end of a machine placement meeting, then, is
simply a matter of working out the finer points.
All in all, provide value and make an impression.
8. Referrals
Now that you have machines in the field, establishing systems that
spread your message without your direct involvement will be one
of the best optimization and growth strategies you can implement.
You’ve dabbled in this already with your marketing and
networking efforts, but this time, there is a new end goal: getting
referrals.
Referrals are often the quickest and easiest way to expand your
business. There is no better marketing than word-of-mouth
(having someone else rave about and recommend your vending
services to a potential location).
In general, the location leads that sign agreements with the least
amount of effort and time spent in the sales process are from
referral programs.
Key Takeaways
1. Lead generation is one of the most vital parts of your business
2. Create your own 8-touch "Shock & Awe" campaign to get on the radar of your most important location prospects
3. Referrals are some of the best and easiest ways to generate new location leads from your existing accounts
Chapter 4 - Choosing The Right Vending Machine Products To Maximize Revenue
It should go without saying that determining the right product mix
for the customers at your location is essential to the success of
your vending business.
Perhaps this is easier said than done.
Every location is different – with different customer demographics,
traffic patterns, and unique requirements – and must be treated as such.
There are a plethora of products on the market, and multiple factors to
consider when creating a product mix – including a consumer base that
increasingly values health and nutrition. Success depends on finding a
mix that balances these factors in a way that meets the needs of your
location.
Luckily, we’re here to help you navigate through this confusing
terrain.
Trends in Healthier Eating
The days of stocking your machine with sugary candy, soda, and gum and
watching the cash roll in are long gone. Consumers these days are more health
conscious than ever, and demand products that not only taste great, but are better
for them as well.
As a result, Healthy Vending is a growing category, and a serious option to
consider if you want your business to be around and thrive in the long therm.
That being said, here are the biggest factors to consider when sourcing products for
your machines.
5 Factors to Consider When Sourcing Products
1. Taste - this is the most important factor when creating a product mix for your machine. If your products don’t match the taste profile of your location’s average consumer, they just won’t sell. It’s really that simple. Market research (like sampling events) and sales tracking will go a long way to help you arrive at the right combination
2. Nutritional Value – an overall trend in healthier eating means that your customers pay attention to things like calories, sugar and fat content more than ever before, so create a mix that includes healthier alternatives to traditional junk food. The products in your machine must also meet the guidelines for your specific location. Take special care at schools and hospitals, where guidelines are strictest
3. Affordability – products must be competitively priced, or they won’t sell. Save money and increase your margins by buying direct from the manufacturer.
4. Brand Recognition – customers are always more likely to
purchase a brand with which they are familiar than a product they’ve never seen before. Make sure you’re stocking recognizable products
5. Novelty – customers in your market may get bored with your
product mix, so periodically introduce new products to avoid predictability and to keep the customer interested in your machine.
Smart Snacks in School
With a dense, diverse, and (seemingly always) hungry population,
schools can be some of the best locations for a vending business. But be
aware that special care must be taken when sourcing products.
More than 2/3 of the average kid’s calories are consumed at school
in the form of meals or snacks, so the options available to them have
a huge impact on their overall health.
In June of 2013, the USDA announced the Smart Snacks in School
initiative, new federal guidelines that limit the amount of calories, fat,
sugar, and sodium in snacks sold in the more than 100,000 schools that
participate in the National School Lunch Program.
Among the requirements is the mandate that all foods in school must be
whole grain rich, meaning that 50% or more of the ingredients must be
a whole grain (or whole grains must be the first ingredient listed), and
snacks must be 200 calories or less.
Luckily, healthy vending businesses make it easy for you to create a product mix that kids find delicious, and that meets these new guidelines.
We made this video to help you understand the new Smart Snacks In Schools Guidelines.
Where you can find the best products
When it comes down to it, how you choose to source products will depend on the product type, availability, and your preferences.
Most vending machine business owners don’t just source their
products through one channel.
You’ll need to compare prices from each distributor to see where you
can get the best pricing on each brand.
When you start purchasing enough products through a certain
distributor, you can leverage your pricing at other distributors to
negotiate better pricing.
Here are some of the most popular ways to source products:
Order directly through the manufacturer. Most product companies have regional Sales and Marketing representatives that want to get their product in more retail outlets (like your vending machines). You will need to order large volumes to order directly from the manufacturer
Purchase at Costco or Sam’s club. These superstores generally have cheaper prices than at most retail locations.
Order through wholesale distributors like UNFI (they have a focus on healthy food, but higher minimum purchase prices) and Vistar (less catered to healthy products, but they have lower minimums), or through Amazon (15% off when ordering 5 or more products monthly).
INSIDER TIP #3: Hold a Sampling Event at Locations
Sampling events serve a two-fold purpose – first, they’re a great way to
help get the word out about your vending program, and build anticipation
and excitement for your machine.
Equally as important, a sampling event gives you the opportunity to gauge
the taste profile of your average consumer. Partner with a variety of
vendors to offer free samples, and see what does and doesn’t work. Armed
with this knowledge, you’ll be better able to create a product mix that
your consumers will love.
Key Takeaways
1. Increased health consciousness means people are demanding more healthy options
2. To get your vending machines into schools, you have to adhere to the strict Smart Snacks In Schools guidelines
3. You may have to use multiple channels to get the best prices for your products
Chapter 5 - Providing Amazing Service to Keep Your Vending Accounts For Life
So you’ve landed some locations, you’ve purchased the exact type of
vending equipment you need to accommodate the location’s needs, and
you’ve officially opened for business.
Now what?
Besides continuing to find more locations, the real work has just begun!
It’s time to provide the excellent level of customer service that you
promised your location.
When your customer service exceeds expectations, asking for referrals
becomes easy. Plus your location won’t even think twice when it comes
time to renew your contract.
There are 4 areas where you should be providing above and beyond
service for your customers.
Machine Maintenance
Vending machines are like cars. Take care of them and do preventive
maintenance, and they will last a long time. When you first start your
vending machine business, you might want to lean on the expertise of an
experienced vending professional, to help you out. As you learn the
business, you will become that vending expert.
In the long-run, knowing how to maintain your own machines will
save you both MONEY and your REPUTATION with the location.
So, when you decide which manufacturer you want to purchase
machines from, see if they offer machine training. They may not publicly
conduct training courses. Or if you decide to join a business opportunity,
make sure they have machine training available.
Product Optimization
Show your locations that you’re constantly thinking about the well-being and happiness of their patrons by optimizing the products
available in your machines. Rotate out the poor sellers for new products. Try different brands, placements within the machine, types of food or drinks, etc. This is good for your pocket AND helps keep the location happy.
Engage Directly With Customers
You could do the bare minimum and just keep your vending machines
stocked.
But that’s not going to get you a lot of referrals or help you improve
your partnership with the location.
We call some of these fun extras, “Buzz Boosters.” Again, they help you look good in the eyes of your location and are fantastic marketing techniques to drive sales. Here are some Buzz Booster examples:
1. Use neon colored signs or stickers to alert your customers when
you put in a new product or reduce the price of an existing
product.
2. Hang out while restocking the machine and pass out a few free
samples – once people taste how good they are, they’ll be more
likely to buy them and to tell their friends.
Hand out samples of products that are either new or don’t sell
well to get those products moving. Try bringing a whole case of
that snack to the school lunch period and hand out free
samples of it. Students go nuts over this!
Be friendly with the employees at your locations and talk to
any of their guests.
Ask for feedback while restocking and respond accordingly
3. Tape a $5 bill to the back of one of the snacks and put a large sign on the machine saying, “One of these products has $5 taped to the back. Will you be the lucky winner?”
Communication
Communication is VITAL in any business relationship. So treat your customers like they’re a business partner.
Be proactive.
Instead of waiting for your location to reach out to you with feedback or
comments, reach out to them. Ask them what requests they have just a
few weeks after you launch. Check in with them periodically and put
systems in place that make it easy for them to get in touch with you with
any questions or concerns.
Be responsive.
Since you can’t anticipate everything that your location will need,
inevitably you will get questions or concerns from your location.
Answer them in a timely fashion. Every time.
A good rule of thumb is to let your locations know you will get back to
them within 24 hours of them contacting you. That way, they know
you're accessible but you won't have to respond immediately.
Stay in touch… but don’t inundate them.
Let your locations know that they’re important to you and that you’re
grateful for the relationship by periodically dropping off new snacks
that you’ve been stocking, giving them a holiday gift bag, sending them a
birthday card, or just stopping by while restocking to say a quick hello.
As decision makers are very busy though, be sure not to overwhelm
them with your good intentions. There are a lot of people that want to
see them each day.
Get feedback.
Make it clear that you want feedback in order to make this the best fit
possible. That said, when you do receive feedback, respond to the
reasonable requests in a timely fashion.
Feedback is the easiest way to learn more about what your accounts
want. And when you provide them with what they want, that's how you
keep your vending accounts for life.
Be personable.
Expert vending tip: Hand-deliver your commission check to the decision
maker and include a hand-written thank you note.
Do this every time, as it’s the personal touches that count. It's these little
things that go a long way in the eyes of your accounts.
Key Takeaways
1. Great customer service is the key to building lasting relationships with your location
2. Become a master of your machine equipment so you can reduce down time and keep your accounts happy
3. Find creative ways to engage with your customers
Chapter 6 - Choose The Right Vending Machine Startup Option
If you’ve read every chapter in this guide, you know the pillars required
to start a vending machine business. Now it’s actually time to think
about which startup path you want to take.
A lot of people struggle with that question because they don’t frame it
correctly. It’s not that one startup option is necessarily better than the
others.
The question you need ask yourself is which option makes the most
sense for you.
It really boils down to these main points:
1. Your circumstance. Are you going into this full-time or starting our part-time? Do you have a business partner or are you doing it solo?
2. Your startup capital available.
3. Your goals – are you trying to create a vending empire or is it a side gig to earn some extra cash?
Let’s look at the various options available for you to get your vending business started.
Your Vending Business Startup Options
1. Do It Yourself
If you have a lot of business and sales experience, then it may
make the most sense for you to start your own vending business.
You’ll be responsible for locating a reputable machine supplier,
training yourself, and conducting your own sales process to land
locations. Without experience in vending, this process may take
up to a year before you get up and running with a couple of
machines.
In other words this option can be incredibly time consuming for a
new entrepreneur, and there’s a lot of risk involved. That being
said, the “do it yourself” method can also be the most affordable.
This vending business route would be a great idea for someone
with a strong business background – someone who is fearless
(not afraid to negotiate to find optimal locations), and
someone who is willing to put in a lot of hours initially to get
their business off the ground.
Pros:
Cheapest way to get started
Cons:
High time investment needed to get started
Need to be good at sales & negotiation to make this work
2. Buy an Existing Route
There may be other vending machine business owners in your
area that are looking to sell their existing business. Look through
craigslist, bizbuysell.com, and your local paper to find out if this
option is available for you.
The major advantage here is that you have a ready to go business
– no need to purchase your own machines or find locations. The
disadvantage is that you’re buying old equipment and expiring
contracts (if they even have contracts in place).
Generally speaking, this option requires less upfront time, but
depending on the size and quality of locations, it can be the most
expensive option. Make sure to thoroughly research the existing
business and analyze the current sales figures to ensure that the
money is worth the price. Also, check out how much time is left in
each of the contracts!
This vending machine route option would be an optimal choice
for someone with advanced business skills who has or can
finance $150,000 to $500,000.
Pros:
No need to purchase your own machines
No need to find locations
Cons:
Buying older and possibly outdated equipment
Coming into expiring contracts or no contracts at all
3. Buy a Franchise or Business Opportunity
You can also buy into a franchise or business opportunity. In this
situation, you get to partner with a company that has an
established brand, a proven business model, and a dedicated sales
team to help you secure vending locations.
In most situations, you also get machine training and sales
support (varying on the opportunity) throughout the entire
location acquisition process, and on the franchise side this will
generally extend throughout the life of your business.
You also benefit by joining a community of other vending business
owners. Each franchise/bizopp has a forum or online community
where entrepreneurs from across the country get to share tips
and best practices.
If you’re looking to start a vending business with the most help
and support possible, including significant assistance with
securing vending locations, a franchise/bizopp is the best
option out of the three.
Pros:
Turnkey startup model
Branding/Marketing power
Lifetime support
Expert location acquisition services
Cons:
Typically require higher capital investment than starting a
vending business solo
Ongoing fees/royalties for business support (franchises and
some biz opps)
Key Takeaways
1. There is no single way to start a vending business. It depends on you, your situation and your goals
2. Your three main choices are a) start your own vending business, b) Buy an existing route, or c) Buy a franchise or business opportunity
3. If you're looking for the most help and assistance to get your
business started, a vending franchise or business opportunity is
the best option