Vending as a Business Venture
By Joe Nichols
The first recorded vending machines date back to the first century B.C., but came to
prominence in the late 1880s. These were primarily postcard and gumball machines with
simple mechanisms, a single selection and accepted one coin.
The snack and soda machines we recognize today - multi-selection, accepting multiple
coin types, dispensing change - originated in the 1940s. In the 1940s, of course, vending
machines accepted coins only, did not dispense change, and limited selections about 20
items. These were fully mechanical vend mechanisms and required no power to operate the
vend cycle.
Early soda machines required power to refrigerate the product. The modern vending
machine design with spiral dispense, full change capacity, dollar bill acceptance (usually
by dollar bill coin changer), 30-40 snack selections, and up to 10 soda options, came to
being in the late 1960s and was refined in the 1970s.
Improvements in vending machine technology since have been based on electronics and
computer innovation, with standardization of protocols and improvements in currency
acceptance. Ultra-modern vending machines can accept a variety of payment types - credit
cards, large denomination bills (up to $100), cell phone charges (charging a product to
your cell phone bill) - can be monitored remotely by Internet, can produce sales figures
to individual unit numbers (sold 13 Snickers and 8 Doritos out of this machine last week),
log machine entry times, and can even provide surveillance with camera technology. Yes,
we've come a long way, baby.
So how is this history lesson relevant? Vending machine technology is responding to
market need. The successful vending operators have driven this technology with their
purchasing habits. Like all businesses, if technology affords a profitable advantage, that
product has a market. The fact that the vending machine manufacturers have continued to
produce better and better machines means that the vending business is a reliable venture
when run properly.
Like all businesses, proper operations is the key to success. Learning about your
account market, the kind of locations and businesses you serve, learning about marketing,
the product you are you going to sell, and the types of vending equipment you'll use, all
these factor into the success of your vending machine business.
There are thousands of successful vending companies in the United States, and if you
think the vending business is for you, offer to work for a company in another city for
free. For free, are you kidding? Instead of taking that week's vacation on a cruise, work
for a vending company: learn all you can about every aspect of the business - load trucks,
fix machines, look at the accounting, install machines.
Pay attention to the products sold, the order in which they go into the vending
machine, find out what sells best, ask questions. The real-world education you will
receive will be invaluable. One week's worth of effort can literally save you hundreds
of thousands of dollars. (And an operator in a different city than yours won't feel
threatened by your business plans.)
The vending business is an established industry, so don't try to reinvent the wheel...
at least not at first. Work a proven system until you achieve profitability, then
implement new systems to improve your economies of scale. Don't fall into the trap of
believing that the rules of the business do not apply to you.
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