Vending Business Pitfalls

The vending business is not as easy as one might think. It's not just a matter of buying a vending machine and sticking it in some location. If you are fortunate to be successful in this business, it is the type of business that can give you great profits.

Pitfall No. 1 - Investing a Lot of Upfront Costs for a New Machine

Start out slow. Do not buy new machines. There are a lot of failed vending businesses out there that have used machines they want to get rid of. Twenty years ago, we didn't have the Internet to browse through for used vending machines. I had to resort to the newspaper. One source today would be to go to craigslist.com.

The reason you want a used machine is that you want to keep your start up costs low. Then, if you decided after a short period, that the vending business is not for you, at least you will feel good about the lower investment you put into it. However, it is very important that you know how to fix the machines in order to keep your expenses down. One repair could start you out with a negative cash flow for a while.

Pitfall No. 2 - Bad Location = No Traffic = No Profits

Location, location, location! Just like location is important to real estate, it is even more important to the vending business. If you just go out and buy a machine without a plan to where you will put the vending machine for the best traffic flow, then you might as well just keep it at your house. Without the right traffic flow, you have no business.

In the vending business, the hot traffic areas are given to the largest vending companies. That is your competition. They have a monopoly over these mainstream areas. So this means, your odds of finding a good location may be a lot harder to find, unless you personally know someone who has a business with a good flow of people walking by it.

Pitfall No. 3 - Understanding What Sells

Once you find a good location, you need to know what people like to eat as a snack or drink. Twenty years ago, that was easier than today. People still ate a lot of junk food so filling the machines with chips or ding dongs was a no brainer. Today, some people might want to have healthier snacks.

You need to have your resources for buying your snacks at a wholesale price. Figure out what the retail price should be by comparing other snack prices with similar vending locations.

Twenty years ago, when I was a young mother with two children ages 5 and 3, I had a vending business with hopes of supplementing income to the family household budget. It didn't work for me - most likely because I was doing this with my children in tow.

To succeed in any business, you have to have a well planned strategy. All I wanted to do was to make money. It takes more than wanting something. However, that one part of my life where I didn't get what I wanted then, I ended up getting something more later in life - knowledge.