Editor’s note: This article was first published in May 2010, when newspaper and magazine vending machines were presented as a novelty; the financing and cost picture it describes reflects that year.
As a business with a future, profitable and needing very little investment, vending stands out. By vending we mean any business that makes money through vending machines, which these days can sell all kinds of things:
- Soft drinks
- Sweets
- Nuts and snacks
- Tobacco
- Ice
- Newspapers
The vending business can be approached in different ways, and we are going to look at them in detail. You can go into this business in three ways:
- As a partner of a vending company: The company would assign you your territory, and your job would be to place the machines in different establishments, reaching a partnership agreement based on a commission on the sales the machines generate.
- By buying vending machines for different products and renting them out to shops, venues and department stores, while taking care of restocking them.
But since we are here to support the entrepreneurial process, we will try to give you the best idea for making vending your high-return business.
Imagine offering the same services as a grocery shop, a bar, a tobacconist and a newsstand, and best of all, 24 hours a day, and you would not need to be on the premises or have employees, at least at first.
What do you need to start this business? Here are the ideas:
1. Premises: ideally in a central area with plenty of foot traffic. They can be your own or rented. The size depends on the machines you plan to install.
2. Vending machines: You can buy them outright, rent them, or talk to the company so that it lends them to you in exchange for sharing the profits 50/50. You need to do some market research and carefully analyse which option suits you best, since all three are viable.
3. Security grilles designed so the machines cannot be damaged, but with openings that let customers take the products out.
4. Product diversification: Find out about the new machines already working in some countries, for example for magazines and newspapers and many other products never seen in vending machines before. Learn about all of them so you can stand out.
5. Optionally, it would be a good idea to put tables and chairs in the premises so customers can consume your products inside, as if it were an ordinary establishment.
Advantages of this business:
- It makes money 24 hours a day.
- It needs no staff, apart from cleaning and restocking.
- Vending machine suppliers offer a wide range of financing options.
- Low monthly costs: only the rent for the premises and electricity.
Disadvantages:
Like any business, it has certain disadvantages. In the business idea we have described, the biggest one is probably that, since it is open 24 hours with no staff and without the owner present, it may be at risk of vandalism. Of course, with certain security measures in place, the risks will be no greater than those any business may face.
This business idea is based on an existing vending business with 230 m2 premises and 45 vending machines, which brings in a net profit of €70,000 a year. You can imagine the customer traffic it has.
Further reading
- 10 business ideas with no investment
- How to finance my business
- How to start a business with no money
- Business ideas for a plot of land or an old house
Featured image: unknown author, Public domain, via Wikimedia Commons.
