looking to start a vending machine biz (leasing, sales, financial)

[LBSer]

i have looked at craigslists and found 2 choices:

one: sells for $4000 3 machines and they are already "well established" on their location accdg to seller monthly net is $600+

two: sells for $20000 31 machines and they are already "well established" on their location accdg to seller gross income is $42000 for year 2008.

i prefer choice one coz it is my first time in the vending machine biz and i plan to do all the stocking and purchasing and all that jazz. and also, current economy might stop people from buying from vending machines. but i real want a biz of my own. what you guys think of vending machine biz?

and if anyone who reads this has hands on experience about vending machine biz. i need your expert opinion.

[Steve Bagu]

Let's see now;
$20,000 for 31 USED machines.
$42,000 GROSS income for one yr.
Gross means total sales (income).
After deducting expense of product and your valued time etc...what is the "NET PROFIT" for the yr?
NET PROFIT is what you should be looking at and not the GROSS considering the investment.

Question you should have is why are they selling a PROFITABLE business.

[Golfinnova]

Be very careful with this. I agree with Steve Bagu in that it doesn't matter what the gross sales are as long as you are making a decent profit. However, there are other factors to consider:

1. How old are these machines? You need to budget for parts replacement and you need to know how to fix the machines. Are the machines located in places where they won't get vandalized?

2. I would talk to all the owners/lessees where the machines are located and make sure that they are happy with the machines. You should also find out the size of the businesses to gauge the frequency of the machines being used.

I was looking to do the same thing and I came across a distribution business that I have built into 27 accounts projecting $160k in sales and decent profits. I'm not getting rich anytime soon, but I'm very happy to be my own boss. So while it's good that you're looking to be your own boss, be extremely diligent and do your homework before you make the investment.

[tatiana1]

Originally Posted by Golfinnova

I was looking to do the same thing and I came across a distribution business that I have built into 27 accounts projecting $160k in sales and decent profits. I'm not getting rich anytime soon, but I'm very happy to be my own boss. So while it's good that you're looking to be your own boss, be extremely diligent and do your homework before you make the investment.

Best advice ever! I was contemplating about trying that business too and also the distribution business. I have a question though. When you are a distributor, you are the middle man right? The thing I don't understand is why can't the retail store (in this case Giant Grocery store for example) buy directly from the manufacturer (for example Budweiser beer)? What is the use/role of the middleman (i.e the distributor)? I think the distribution business is a great business, mainly because it is B2B. Is the initial investment prohibitive? Being rich is one thing, but if one is able to cover at least one's basic living expenses, it is great. By the way, does the (food) distribution business go up and down in a slow economy or is it recession-proof since people have to go to the grocery store? Thanks

[LBSer]

thanks for the opinions guys. okay you made me curious about the distribution biz. how does it work? and if you can link me to infos about it. thanks.

[Golfinnova]

Originally Posted by tatiana1

Best advice ever! I was contemplating about trying that business too and also the distribution business. I have a question though. When you are a distributor, you are the middle man right? The thing I don't understand is why can't the retail store (in this case Giant Grocery store for example) buy directly from the manufacturer (for example Budweiser beer)? What is the use/role of the middleman (i.e the distributor)? I think the distribution business is a great business, mainly because it is B2B. Is the initial investment prohibitive? Being rich is one thing, but if one is able to cover at least one's basic living expenses, it is great. By the way, does the (food) distribution business go up and down in a slow economy or is it recession-proof since people have to go to the grocery store? Thanks

Yes, you are a middleman. However, most of these owners simply don't have the time nor the manpower to get the product themselves. Then there is the setting up of the displays, rotating the stock, handling returns.

You can start with a very small investment. For example, you could do a candy distribution business and get your candy from one of the warehouse clubs like Costco, Sam's or B.J.'s, that way you can buy as little or as much as you want and not worry about leasing a warehouse since that's already in place. The only other investment you might want to make is a van or a pickup with a cover, and a handtruck. If you have a garage, you could use it to store some inventory.

The best way to maximize revenue and profits is to think of the business the same as an investment portfolio, meaning diversify your product. So as a financial adviser might recommend you get some stocks, bonds, gold, etc., you want to get some candy, snacks, beef jerky, popcorn, pastries.

Is it recession-proof, sadly it's not. Some of my clients have cut back on their orders and the frequency just because the economy has hit them and the effect trickles down. However, if you are willing to talk to a lot of people and make a good effort, you will succeed.

[Golfinnova]

Originally Posted by LBSer

thanks for the opinions guys. okay you made me curious about the distribution biz. how does it work? and if you can link me to infos about it. thanks.

Some ideas to consider would be Jack Link's beef jerky (I strongly recommend doing Jack Links over Pemmican because it's simply the best and has the biggest market share by a huge margin, everyone knows Jack Links).

Another is pastries such as Bon Appetit which makes great products If you can get in touch with a distributor in your area and be the middleman, both of you can prosper.

You could also check to see if there are any popcorn vendors in your area that make small bags of popcorn to sell to convenience stores that are near to theatres.

[tatiana1]

Originally Posted by Golfinnova

Yes, you are a middleman. However, most of these owners simply don't have the time nor the manpower to get the product themselves. Then there is the setting up of the displays, rotating the stock, handling returns.

You can start with a very small investment. For example, you could do a candy distribution business and get your candy from one of the warehouse clubs like Costco, Sam's or B.J.'s, that way you can buy as little or as much as you want and not worry about leasing a warehouse since that's already in place. The only other investment you might want to make is a van or a pickup with a cover, and a handtruck. If you have a garage, you could use it to store some inventory.

The best way to maximize revenue and profits is to think of the business the same as an investment portfolio, meaning diversify your product. So as a financial adviser might recommend you get some stocks, bonds, gold, etc., you want to get some candy, snacks, beef jerky, popcorn, pastries.

Is it recession-proof, sadly it's not. Some of my clients have cut back on their orders and the frequency just because the economy has hit them and the effect trickles down. However, if you are willing to talk to a lot of people and make a good effort, you will succeed.

Thanks for the info! I have lots of research to do for sure..

[Golfinnova]

Good luck, PM me with any questions and I'll be glad to help.

[Lizzy5]

LBSer,
My in-laws had a vending route. They had a couple of machines at already existing businesses. They made a nice living to suppliment their living on just a few machines. I suggest you start off small. The shopping for the food and the stocking the machines can be time consuming. Then you have to consider time and money if the machine breaks