As with any vending machine placement, you need to consider the hours of operation, the demographics of the people, why they are there, and any competition, including other vending machines and other refreshment options.
With an airport, I'd say you have a captive audience that is often in need of quick food or a refreshment to help pass the time. In addition, you'd see exceptional hours of operation, potentially 24 hours a day - however there is a slew of competition, and most restaurants offer premade food and/or other snacks that patrons can grab in a hurry. And as a side note, restocking these vending machines will probably be very time consuming, as I'm sure you'd need to park fairly far from the machine and go through limited security measures each time you arrive.
If airport placements fit into your vending model, and you can seamlessly integrate them into your route, I'd say it may be worth trying, but be cautious and continuously audit their performance.
rent or revenue sharing with airports, if it's anything like malls, be prepared to pay a handsome amount (upwards of 40% of sales)
How much does 1 vending machine gross a month?
“A” as in, one? I do not know of any kind of vending machine that, after costs are deducted, that will generate a profit because of the cost of the labor of buying and merchandising and maintenance. Vending only works on scale. It takes , typically, ten machines on location selling to generate revenue beyond expenses.
Even if you got a machine for free, you might think you are making money, then it needs a repair, and wipes out six months of what you thought was “ profit”
The vending industry is an old line established industry. It is rapidly evolving. Candy machines take credit cards. Micro markets are replacing banks of machines at hotels and office parks.
How much should I pay a location to place my vending machine there?
There are usually two ways to do this: a space lease or a “participation” location.
A space lease is where you pay the location owner a set amount each month for use of the space. You’d have to contact other locations/vendors in your area to find out what the going rate is in your area.
A participation location is essentially a profit-sharing plan. You give the location a set percentage of the machine’s “drop” (gross revenue). When I worked for a gaming company, that was a 60/40 split, with the location receiving the 40%. This can be good for lower revenue spots, or spots with no history to determine what’s the best way to proceed.
Whichever you choose, you’d make the first lease expire in either 6 or 12 months. That gives you plenty of history to determine whether the machines are profitable and whether it might be wise on your part to change the type of lease. Be warned, though: It’s easy to switch if it will make the location more money. It’s not easy to change from a $150 average on participation to a $125 static space lease, but quite easy to change to a 60/40 participation if the machine regularly grosses $500 a month.
tips for starting a vending machine business
- There are DEFINITELY better brands (easier to fix, more standard in design, more reliable, etc.) of vending machine than others.
- USED vending machines are sometimes the BEST investment.
- Its almost ALWAYS BETTER to have BOTH a snack and beverage machine in any particular location.
- The more people at a location, the greater variety of products that you can afford to offer to appeal to a greater variety of people.
- Pick a minimum location size (number of people, closed or open to the public, etc.) and STICK to it. You’re not making your work-life easier or growing your business by taking on a small location.
- Have, use, and get signed (by your customers) a Services Agreement that sets up the expectations that the customer can expect from you and what you expect from them.
- BIGGER (more selections) machines aren’t always better. Be selective with equipment placement.
- Have ENOUGH machines for a location. If you have to return multiple times a week (or a day) to refill a machine (congrats on that), but this is a clear indication that there is NOT ENOUGH EQUIPMENT on site. Make your life easier and add more machines to handle the traffic and sales volume.
- Doorways suck and are and will be the biggest obstacle to your plans. Doors can be momentarily removed or machine parts removed to make them fit through a doorway, but doorways will likely NEVER be modified for your business needs.
- Just because YOU PERSONALLY LIKE a product doesn’t mean it will sell OR you will make a profit on it.
- Just because YOU PERSONALLY DON’T LIKE a product doesn’t mean it won’t sell or you can’t make a profit on it.
- Check grocery and convenience store pricing (especially ones near the vending location) and try to match or be a little under and stock recognizable items like brand name snacks and candy. As cheap as “Uncle John’s Chocolate Spectacular” bar (instead of Hershey chocolate bars) might be, if no one buys it, you lose money.
- AVOID GENERIC brands bought from big box stores like Costco or Sam’s Club, no one pays a premium price for a brand that they usually buy in bulk.
- Stick to mainstream/common products unless someone requests something specific AND THEN actually buys it. LOTS of people ask for things they have no intention of actually buying.
- If an item doesn’t work out, try discounting BEFORE you remove it to recover some of your costs. And resist the temptation to just leave it out as a free item. If possible, let people know that you remove items BECAUSE no one bought them.
- Avoid locations on upper levels that DO NOT have elevators unless the equipment you are installing can be carried by one person.
- AVOID coffee vending machines at all costs until you have money to burn. The learning curve is HIGH and good (high traffic, easy access, and/or non-cheapskate/coffee-snob customer) locations are NOT EASY to get or find.
- Always think in terms of volume for your whole business, don’t be cheap about a single location, but don’t overspend on a single location either.
- If you need just one of a certain part, buy 2 or 3 or more if they are cheap. Spare or backup parts are invaluable once you learn when they are needed.
- Shop around, the price difference on exactly the same items from one supplier to another can be alarmingly different; this is true for parts, accessories, repair services, etc., not just the products you sell.
- Get an account with Pepsi, Coke and/or 7-Up/Snapple/Dr. Pepper Group (now owned by Keurig/Green Mountain, yes, the coffee people) just for access to their equipment. Buy enough product, you get free use of their vending machines. You’ll still have to buy snack machines, so refer back to the first two tips.
- If you plan to be in this business for the long haul, attend at least one NAMA OneShow (The Premiere Vending and Refreshment Services Trade Show) once you think you can afford it or just want to for the experience and exposure to the industry. The contacts you’ll make and the products or services you’ll learn about will be invaluable. But, don’t rely solely on what you find there. There’s nothing like a good LOCAL resource that you can visit in person instead of ordering something and paying for shipping.
If the potential sales are questionable, then include a “revenue minimum” in the commission agreement.
If the machine does not generate enough sales for any particular period of time, then you don’t owe a commission.
If they don’t believe my reported numbers, they can check the machine’s counters.
If the location is NOT open to the public and they want a commission, pass.
