by Andrew Smith on 20/03/07 at 9:23 am
Last week we attended the “BizOpps – Business Opportunities & Franchise Expo” held at the CTICC. It was the first year that it’s been held in Cape Town, so attendance by exhibitors and visitors was a bit slim, but there were a couple of interesting bits that we got from it, which I’ll attempt to post about in the coming days.
The first stand I was drawn to was a company who supply vending machines in South Africa. To me a vending machine is the quintessential small-business in a box. I’ve already decided that my son’s 13th birthday present is going to be a vending machine (12 years to save for it – he’s just turned one). It will be like a coming-of-age into the business world. Wrapped up in that fridge of over-priced goodies are lessons involving gross profit, break-even, suppliers, spoilage and return on investement. I’ve never quite understood how I would go about getting my hands on one of these machines, and the simplicity surprised me – buy the machine, find a venue, keep it stocked. Not much to it.
1) Buy the machine
Multi-Vending Services can supply you a range of coffee and cool-drink/snack machines, ranging in price from R7,000 to R30,000, or rented for about 5% of the value per month. You can pimp your purchase with extras like a note reader (for R10 and R20 notes). There is no real installation involved – just plug it into the mains.
2) Find a venue
Apparently a spot becomes feasible when 100 people walk past it every day. You can approach schools, hospitals, office blocks or factories. There’s no risk for the venue owner, so they’re usually keen, although a 5% commission on revenue can sweeten the deal.
3) Keep it stocked
This is the most labour intensive part. You should budget on visiting each machine every 3 days or so to stock it up and keep it clean. You’ll probably start out buying your stuff at Makro, but if you’re pushing decent volumes you could approach the beverage and snack companies directly.
We were told that running 8 vending machines should probide enough income to pay for a vehicle and a basic monthly salary. Until you reach that size give the leg-work to your 13 year old son and tell him it’s part of his education.
Andrew Smith is the pedantic systems guy behind Live Alchemy, a SA e-commerce company. Andrew writes for Ideate in an attempt to make the world a more efficient place. View more articles by Andrew Smith.
Tags: vending machines