By Timothy Sanchez
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Reflecting back when I owned and operated a vending machine business, I would like to share what a typical workweek was like. First of all I purchased mostly used snack and soda machines from a small business that repaired and refurbished them. I bought brand new gum ball and bulk candy machines direct from a manufacturer. I found my suppliers by doing a lot of footwork and asking vendors a lot of questions.
I mostly got my own locations however I hired a salesman to help me and he got about 20 candy locations. In vending the location of your machines is the most important thing. When I say location I mean the business where the machines are placed. For candy machines I looked for locations where there are waiting areas like hair salons, auto mechanic shops and small offices. For the large soda and snack machines I looked for large businesses that have at least 50 employees and large break rooms. I avoided placing soda and snack machines In areas that are accessible to the public due to the potential for vandalism. High traffic public areas could be very profitable and a high school or college campus could be a gold mine but it requires extra equipment designed to minimize vandalism otherwise maintenance costs could break you. I chose to put my machines in businesses where only employees could access them.
I had about 100 locations between candy locations and soda and snack machine locations.. The service route consists of every two week customers “ETW” which were the candy machines, weekly locations and my large locations I serviced twice per week. I had two locations I visited Monday, Wednesday and Friday. They were my bread and butter locations, one was a large office of telemarking insurance sales people and the other a large warehouse. Monday was shopping day. I got the newspaper on Sunday , this was 1992 we still read newspapers back then. I would look for coupons and big sales on cases of soda and I would go to the store where I can get the best price. I sold a can of soda for anywhere from .50 to .75 cents depending on the location. I tried to buy at .20 per can or less and most of the time I was able to. After I got the cheapest soda I went to Costco to by cases of snacks and candy. I only serviced a few locations on Monday and Friday, I did the majority of my service stops Tuesday, Wednesday and Thursday. Friday was bank day when I did my accounting and took my giant bags of cash and coins to the bank.
Service consists of stocking the machine with fresh product and taking out the money and doing minor maintenance on the machine. I am not going to go into a lot detail on that aspect on this post, but I am going to share what the real key to success is for being a vending machine entrepreneur.
All of the locations that I stole from other vendors , I was able to take because they did not provide good customer service and the principal people in the business didn’t even know who their vending person was. Times have changed now, but back in the early 1990’s in Southern California there were a lot of people getting into vending. It seems the the business attracted people who thought vending was all about the machine. They had no people skills and wanted to go in, service the machine and not have to deal with any humans. The guys would come in wearing dirty clothes and looked like slobs. I knew from the beginning that I could do better.
The vending machine business is a customer service and sales business. You might not succeed if you don’t have people skills. I sold my services as a convenience to the business so I did not have to share my profit with them nor did I pay for electricity. They wanted my machines in the business so their employees can use them and get convenient snacks while they worked. I wanted them to feel good about patronizing my machines. So when I visited a location to service the machines I always dressed nice with business casual pants black shoes and a button down shirt or polo shirt. I always spoke to the receptionist or manager in charge when I arrived and greeted them. I got to know people and asked what everyone likes in the machines and I made notes about what my main contacts like. I gave away product; I gave a candy bar or a can of soda to the people I dealt with. If there were people going to the machine to use it while I was servicing it, I just gave them what they wanted. People loved that. If someone told me they lost money in my machines I refunded them and gave them something, no questions asked. I made sure that they knew who I am so if a competitor came it to try and steal my business it wouldn’t work because I developed a relationship with them. Their vendor was not some unknown mysterious person who sidled in and out, their vendor was Tim.
So customer service and personal relationships is how to maintain a successful vending business or any business. However you still need to make money, so even though you want to become friends with your client, you need to be able to pull your machines out and place them elsewhere if they are not selling enough or if there is repeated vandalism. A machine is a money making investment that must pay off. Part of being a successful vending business person is finding the best locations for machines. Instead of getting more locations and buying more machines, you find new locations and pull your lowest grossing machines that are not earning an acceptable profit out and move them to a better location. This way you maximize the income from each machine. Once all of your machines are profitable, then you work on expanding the business by buying more machines and getting more locations. Eventually you must split the route and hire an employee and you keep repeating all of that until you build your vending machine empire.
Being a vending route owner was a very enjoyable and rewarding time in my life. Sadly I had to get out of the business because of personal reasons but I sold the business for a good amount. On a side note; I hand sorted all of the coins that came from my machines. I developed a method that I could sort and count very quickly, yet it enabled me see all of the coins. I learned how to spot the difference between clad coins and silver coins. As I sorted I tossed all of the silver coins into a box and stored them. The coins I collected from my vending business is what got me into E-commerce later on. Follow my blog and I will share my story of how collectible coins helped get me into selling on Ebay, e-commerce and where that business is going next.