The article will start with talking about vending machines in general, how they have evolved from cash to completely digital ones, and how digitals are better than cash ones.
With digital payments growing exponentially in India, the concept of unmanned retail is also on the rise.
Smart Vending machines are an integral part of unmanned retail and are currently booming in India.
USA, Europe, China, and Japan already have vending machines almost everywhere outside homes.
The vending machine industry is an attractive option for new and experienced entrepreneurs because of its surprising profitability and the ability to generate passive income.
How To Start a Vending Machine Business?
1. Determine your target audience
Brainstorm ideas and pick an audience to target.
Having a target audience will help gear your products specific to them which will help in an overall increase in sales.
2. Right Selection of products
Based on the audience you have decided on, you need to think about which products would be best suited for them.
One key to the success of a vending machine business is having the right products sold at the right location.
For example, if you plan on placing a food and beverage vending machine in your local gym, you may want to stock it with protein bars, pre-mixed shakes, electrolyte-infused drinks, and other products that would provide value to gym-goers.
You’ll need to test which products sell the most and remove those that don’t sell.
As you search for items, take pricing into account. Is your target audience looking for high-end products or something more affordable?
Tip: Before buying a vending machine, research your products so that coils can be arranged beforehand to ensure the product will fit properly in the machine.
3. Location. Location. Location
Location is everything in the vending machine industry.
Choosing the best snack machine locations will make all the difference in whether your business is successful.
Always select a location that will have high traffic. Don’t make a mistake choosing a location not having much traffic.
We have compiled a list of locations where our machines have been installed for your reference.
- Community Centres
- Government Buildings
- Manufacturing plants
- Apartments, Malls, etc.
Keep in mind the space size you have available, whether your machine will be inside or outside, and what kind of competition your products will face.
Always be out there looking for more locations and locations. Your success in vending machine business is directly proportional to your ability to generate location leads.
Which type of Vending Machine to buy and what payment methods to keep?
After you have decided on your target audience and products to keep, the next step is to decide which type of snack vending machine, whether an Ambient(not refrigerated) or Combo(having refrigeration) machine to buy.
The next step is to decide which payment methods to keep.
Whether you want to have a Cash only machine, a Cashless only machine, or both Cash + Cashless payments(Credit card, debit card, Paytm, UPI, etc.), for specific requirements, you can also have Sodexo payments, RFID payments, etc.
We at Wendor have designed India’s most reliable and fastest vending machine experience to boost your vending business.
It’s a touchscreen-based solution that helps you.
1. Increase Sales:
1. Based on our data with existing customers and research, having cashless payments increases consumer spending by 32%, increasing sales overall.
So it is always recommended to have cashless payments on your machine.
2. Wendor proudly says that they are the only company in India to provide the fastest Multi Vend technology. With this, one can vend 5 products in less than 35 seconds.
3. The touch screen provides a good experience to the customer, increasing sales.
Having touch screens also helps provide many more opportunities, such as generating extra income by displaying advertisements, showcasing your brand, providing discounts through standby wallpaper, and many more.
2. Reduce Operational Costs:
Wendor provides inventory management software through which businesses can manage and check real-time inventory and other day to day operations in their vending machines.
This helps them know when refilling is required and hence saves time and extra costs eliminating the need to visit locations to check personally.
Alerts for low inventory, if a machine is down, and if the internet is down are sent automatically through emails and SMS.
Businesses get daily, weekly, and monthly sales reports.
Sales analytics help them understand which products are selling the most and which aren’t. Then they can replace the products which are not selling and try others.
3. Remotely control your vending machine business:
Vending businesses can remotely control their machines sitting anywhere. There is a dedicated operator application for that. They can also access the dashboard through the web.
There is also a dedicated refilling application for refillers to help them refill faster and better.
Based on data from existing customers, we have found that vending machines that have been upgraded with Wendor solutions see an increase of 25% in sales and a decrease of 15-20% in operations costs.
Whether to buy or rent a Refurbished or New vending machine?
If you are starting or planning to start a vending machine business, buying a new machine is always recommended rather than renting a vending machine.
This is because renting a vending machine is a more costly affair than owning it in the long run, and the ROI in renting is also less.
Renting only makes sense if you want to validate your idea first for a few initial months.
We always recommend buying a New machine over a refurbished vending machine because we have seen over a period of time in this industry that refurbished vending machines cost less at the start but have more operating costs moving ahead.
They require more maintenance, can break down at any time, result in more loss of sales of products, and therefore are a headache to own.
Which Vending machine company to partner with?
Your success in the vending machine business is a lot dependent on this factor.
Choosing a company that can provide you with the most suitable solution as per your requirements, have a reliable system, is flexible with your demands, innovates with new features, and can provide great after-sales support is the one to go ahead with.
Don’t make a mistake in choosing a company which will make you regret it later. Think critically.
Tip: It’s a service industry; hence timely maintenance and after-sales support are prime factors.
How much can I earn? What is the vending machine business ROI?
Earnings are completely dependent on what products you sell, what margins those products have, how will be the demand for your products in that location, and the expected traffic at that location.
We can give you a good idea based on our existing customer data.
Have a target of sales up to 35k-40k K per month. Or if sales are going to be less, then have products with high margins of around 25%-35%. Healthy products usually have high margins in this range.
We have a lot of customers where sales per month easily cross 40k. Taking this number per month, a vending machine will easily cover its initial cost within 1.5 years to 2 years.
Since the life of a vending machine maintained well can easily cross 10 years, the next 8 years are your profits on a one-time investment. The annualized ROI stands at 15-18% as compared to 7-7.5% given by banks on F.D.
Vending machine Operations and some tips
To Operate a vending machine, you will have to keep the machines
- Fully Stocked: This will be managed by the inventory management software. You can see live inventory, and hence you would know when to refill.
- Clean: Keep your machines clean and in good repair. Dirty, poorly maintained machines are a turn-off for customers.
- Functioning: Partner with a company that can provide great and fast customer service if it breaks down.
- Maintain a good relationship with the business owners or contact persons as they might be on the receiving end of complaints or demands for refunds.
- Analyze sales and listen to feedback from customers on which types of products are most desirable to them. Stock the machines accordingly.
- Provide contact information on the machines so customers can report any issues. Address any complaints immediately and graciously.
- To be profitable and make a long-term business that gives money, you need to have a good number of machines. So the secret to success is acquiring more locations and scaling up fast.
We have done a lot of research, talked to many customers, and put in a lot of hours to write this blog to help you start your own vending machine business.