How to Start Your Own Vending Business and Profit in a Recession Proof Industry

One of my first entrepreneurial endeavors was making money with vending machines. The idea of having a a lot of machines out there paying me while I didn't work and only having to service them every now and then was something I could not pass up. Also, I never see vending machines fail. Personally, I always find myself addictivly playing those claw and toy machines, and have read in Maxim magazine that girls go gagga if you can successfully win a stuffed animal at this carnival game. To own an addictive product is a certain cash cow.

Although the two toy machines I purchased are now rusting in my garage as I have relocated and focused on my Internet endeavors, when I had them placed in a bar and a licensing agency, the cash was flowing in like you wouldn't believe. The only problems were was that I had bought used machines that broke down, and Washington state eventually required my establishments to change their licensing requirements and they balked at messing with their licensing. I still have a bubblegum machine in a terriyaki restaurant that has more than paid for itself and still provides me with a little extra cash every now and then.

A brand new toy and claw machine rarely breaks down, can run about you about $3000, and makes on average $1600 every six months. The stuffed animals are best bought in balk at stores like Sam's Club. You are able to adjust the sensitivity of the claw to increase or decrease the chances of a person snagging a toy. Generally, it is recommended that you alter the sensitivity so that there is a win ratio of about 20%. I always found it best to have some generic Plush toys serve as filler at the bottom, and have a few rare items on top that would attract people to play incessantly.

Whether you want part time income, or a full blown empire just requires basic math. Use your calculator with the $1600 every six months figure. When prospecting for clients it's best to start with what would be called your warm market. Businesses that you frequent as a customer such as restaurants and grocery stores are perfect. They may go along with your request simply because they like you as a customer.

I always found that when I proposed the idea of providing the machine free of charge, offering them 20% (in essence free money) appealed to most people. It's also best to target privately establishments such as bars and restaurants, bowling alleys, and Laundromats, regardless of which machines you wish to market. I placed a soap dispensing machine with my apartment landlord and they even installed it for me. It's done quite well. With the toy and claw machines, make sure to contact your local state capital. In some states they are looked at as a gambling device and require a special gambling license that would be similar to what a slot machine would require, all though the requirements are less strict than they would be for a slot machine.

When I was prospecting for clients, I was amazed that nearly every one showed interest. I had never experienced that with sales before, but of course you're not selling, you're offering free money. You just have to appear trustworthy so they don't have to worry about you taking off and leaving the machines to rust in your wake. If you're good at networking, and know a lot of business owners or are customers at a lot places, simply approach the owner from the standpoint that you're a happy customer and you're looking for businesses to place your machines where there's a lot of traffic. If they balk, or are short with you, just move on. If they start asking questions, than you're getting somewhere.

Make sure to do your homework, and avoid scams at all costs. Companies that advertise that you can buy 40 gum ball machines and they'll place them for you are almost always scams. I have a friend who ended up with about 60 candy machines with nowhere to place them by going with such a program that often fond advertised in small business magazines. Your own personal contacts are the best and I found that Gumballs.com based in Seattle had the most realistic approach and best products and service.

Also, the vending business has the advantage of being an all cash business, and when you buy products in bulk very often you will experience up to a 700% profit margin, and they offer many tax incentives. It only takes about 3 minutest to service one typical machine, and having 100 machines requires only one or two days of work a month; 100 machines is what you should shoot for if you wish to make a living doing it - it could be less with the toy and claw machines which are the biggest cash cows. It's also easy to start part time and can be done as quickly or as slowly as you wish. Think about it, a hundred machines out there acting as employees who never complain or call in sick and are making money all the time, even when you're on vacation. How can you not get excited about that.

Sources-

Gumballs.com