The article will start with talking about vending machines in general and how they have evolved from cash ones to completely digital ones, and how digitals are actually better than the 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 definitely an attractive option for both new and experienced entrepreneurs because of its surprising profitability and the ability to generate passive income.
With the right placement, right location, right products, and a simple user interface, a snack vending machine can easily earn between 30K to 60K in monthly sales.
How to get started?
- Determine your target audience:-
Brainstorm ideas and pick an audience to target. It can be people going to offices, students in colleges or schools, fitness freaks in gyms, people in residential apartments or public locations and so on.
Having a target audience will help gear your products specific to them which will help in an overall increase in sales.
- Right Selection of products:-
Based on the audience you have decided you need to think 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 require to try and test which products sell the most and remove the ones which don’t sell. Products can be healthy products, snacks such as chips, beverages, chocolates, biscuits, others like cigarettes, medicines, fresh-packed food, books, apparels etc.
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 make sure the product will fit in the machine properly.
- 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 which will have high traffic. Don’t make a mistake choosing a location not having much traffic.
There is a list of locations we have compiled for your reference where our machines have been installed. These are Offices/Corporates, Factories, Hospitals, Colleges, Hostels, Schools, Community Centres, Government Buildings, Gyms, Manufacturing plants, BPO’s, Airports, Apartments, Malls etc.
Keep in mind the size of the space you have available, whether your machine will be inside or outside, and what kind of competition your products will be facing.
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 your target audience and products to keep, the next step is to decide which type of snack vending machine, whether Ambient(not refrigerated) or Combo(having refrigeration) machine to buy. The check out how much does a vending machine cost kindly visit this: ( link to vending machine cost blog post )
The next step is to decide which payment methods to keep. Whether you want to have a Cash only machine, 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 the most reliable and fastest vending machine experience in India to boost your vending business.
It’s a touch screen-based solution which helps you:-
– Increase Sales:
– Based on our data with existing customers and research, having cashless payments increases consumer spending by 32% which overall increase sales. So it is always recommended to have cashless payments in your machine.
– 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.
– The touch screen provides an overall good experience to the customer, hence increasing sales.
Having touch screens also help in providing a lot more opportunities such as generating extra income by displaying advertisements, showcasing your own brand, providing discounts through standby wallpaper and many more.
– Reduce Operational Costs:
– Wendor provides an inventory management software through businesses can manage and check real-time inventory in their vending machines. This helps them know when refilling is required and hence saves time and extra costs eliminating the need to personally visit locations to check.
– Alerts for low inventory, if a machine is down, if the internet is down are sent automatically through emails and SMS.
– Businesses get daily, weekly, 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.
– 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.
There are many other benefits which you can check here wendor.in/features.
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 cost.
- Whether to buy or rent a Refurbished vending machine or a New vending machine?
If you are starting or planning to start a vending machine business it is always recommended to buy a new machine rather than rent it. This is because renting a vending machine is a 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 being in this industry that refurbished vending machines cost less at the start but have more operating costs moving ahead. They require more maintenance, can breakdown 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 which can provide you with the most suitable solution as per your requirements, have a reliable system, is flexible with your demands, is innovating with new features and can provide with 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 later. Think critically.
Tip: It’s a service industry hence timely maintenance and after-sales support is a prime factor.
- How much can I earn? What is the vending machine business ROI?
Earnings are completely dependent on what products you sell, what margins do those products have, how will be the demand for your products in that location and the expected traffic at that location. Based on our existing customers data we can give you a good idea.
Have a target of sales up to 35k-40K per month. Or if sales are going to be less then have products with high margins 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 one time investment. The annualized ROI stands 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
1) Fully Stocked: This will be managed by the inventory management software. You can see live inventory and hence you would know when to refill.
2) Clean: Keep your machines clean and in good repair. Dirty, poorly maintained machines are a turn-off for customers.
3) 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 person 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 which gives money you need to have a good number of machines. So the secret to becoming successful is to acquire more locations and scale up fast.
- Final Thoughts:
We have done a lot of research, talked to a lot of customers and put in a lot of hours to write this blog to help you in starting your own vending machine business.