Introduction to a Vending Machine business
by Andrew Smith on 20/03/07 at 9:23 am
18 comments
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
Nino
Mar 20th, 2007
Great, it’s the kind of business I’m looking to set up in Cameroon.
But there is a big lack in energy supply. A vending machine a really “a business in a box”.
David
Mar 28th, 2007
Great for Work life balance…
Odwa
Apr 12th, 2007
Hi
Do you know of a vending machine manufaturer that would manufacture a vending machine customised for the type of business that I will be running?
From Odwa
Andrew
Apr 12th, 2007
Hi Odwa
I’m not very knowledgable about vending machine manufacturing, but try contacting these guys: http://www.multivendingservices.com/
Richard
Apr 21st, 2007
I’d like to know more about these business
Derick
Apr 26th, 2007
We at Aropay (www.afropay.co.za) offer the same thing, but without the hassle of stocking the machine.
We place a secure terminal at merchants, who then vend a range of prepaid products like airtime, calling cards and electricity. Added value to the merchant is that the terminal can also serve as his credit card terminal.
We have a great franchise package where there is no up-front payment, just a monthly amount.
Nomfundo
May 1st, 2007
Please email me more info on this vending machine
Andrew
May 2nd, 2007
Hi Nomfundo and Richard
Unfortunately we can’t send you more information because we’re definitely not the experts on this topic. You’ll have to visit some of the sites mentioned on this page – afropay.co.za and multivendingservices.com.
Derick
May 11th, 2007
Nomfundo
We’ve now also launched franchise or wholeslae packages which allow you to buy multiple machines and run them as your own business. You negotiate a discount structure with a retailer, and you earn the difference between that and the larger discount we give you. Its all fully automated (each terminal is set up uniquely in our system) and you get your earnings paid to you every month.
Your job is simply to help the retailer make higher sales turnover. And you can add terminals to grow the business.
Regards
Derick
Charlene
May 28th, 2007
Hi, I would like to start my own vending machine business. Is the vending business profitable? I also visited a websited where you rent the vending machine for R300 a month. (they call it Rent to Own), is this a good idea?
Any other information would be appreciated.
Thanks
Andrew
May 28th, 2007
Hi Charlene
As mentioned a few times in these comments, Ideate doesn’t know much about vending machines. We just wrote about the concept behind them. You’ll have to do some research with the providers, or try and contact some of their clients.
anand
Jun 10th, 2007
hi
i am looking for buy a Wittenborg FB2800 coffee vending machine. Can you help?
Ilyaas
Jun 22nd, 2007
I have a wittenborg fb 2800 and would like to sell
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