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Vending Machines: Legitimate Investment or Get Rich Quick Scam?
by Bill Knell
Ads for amazing, entrepreneurial opportunities fill the airways. On many cable channels,
infomercials touting get rich quick schemes have replaced those for cut through steel
knives and pocket fishing gear. It’s a sign of the economic times. Our Nation’s
population is getting older and many folks over fifty have surplus money to invest.
Younger people, looking for a way to escape the daily grind, are eager to max out
credit cards, withdraw their nest egg and cash in those savings bonds to start a
profitable business. The problem with cookie-cutter opportunities of the type currently
being offered is that they are designed to make someone else rich, not you!
Vending machines have been the darlings of entrepreneurial magazines and publications
for the past twenty years. While ads for roof coating and carpet cleaning franchises,
computer enhanced photo and donut machines attract some takers, most people respond to
the vending machine opportunity ads because they require a smaller investment.
The majority of people who invested a few hundred to a few thousand bucks in these deals
got stung badly. Many of the seemingly reputable vending machine offers came from fly
by night scam artists. They would collect a pile of money, close down their operation
after sending out a few cheap machines that never worked right and start up all over
again under a different business name. Even some of the vending deals that were
legitimate were anything but the lazy man’s road to wealth.
Those who invested in vending machines, received their equipment and began to place
them in stores and other high traffic areas were in for a rude awakening. Most found
out later that they paid double or even triple what the machines were actually worth.
Others were being soaked on the price of inventory and had trouble getting the supplies
in time to fill their machines. But that was just the beginning of their woes.
I cannot tell you how many letters and emails I have received over the years asking me
if I could offer some advice on how to get out of a vending business that was sucking
the very life, in terms of money and time, out of its owner. People that had expected
an easy second income out of their new vending business to make their car or house
payments found themselves stuck in a bottomless money pit. Broken or vandalized machines
quickly ate up profits. The time needed to service their investment was also a big
problem. The few hours a week mentioned as a realistic commitment of time to run their
new business turned out to fall short by double digits.
Many vending machine business owners that I heard from were close to total exhaustion.
They found themselves spending from four to eight hours every night dealing with the
machines after leaving their normal day job. Much of that time was pure loss as they
had to repair machines and deal with irate store owners who were getting tired of
customers complaining to them about money lost in damaged or defective equipment.
I recall one sad tale that came from a man in his sixties. He purchased some vending
machines for a retirement income and quickly found himself out on the road from twelve
to fourteen hours every day fixing, restocking and changing the location the machines.
After several months of this, he had a heart attack. His brother kindly agreed to
visit the vending route while the man recovered. A week went by before his brother
could start the serving the route. When he did, he found that many of the stores where
the machines were located had placed them in back rooms or even left them on the street.
The merchants just couldn’t deal with all the customer complaints.
A new generation of vending machines has arrived on the scene to replace the candy,
gum, snack and convenience models. These are electronic machines that offer movies,
internet access and even money. For the right investment amount, you can own your own
video rental business, pay-per-use internet access terminal or ATM! Most people are
smart enough to realize how much work it would be to refill DVD rental machines for
the small profit margin offered, but many get taken in by the internet access or ATM
machine offers. A significant investment is needed to own the internet access or ATM
machines, but are the rewards as great as the offers claim?
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