The lifestyle of a successful independent vending machine entrepreneur

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.

How I built a successful vending business

By Tim Sanchez

This post may contain affiliate links, please see our full disclosure here

An entrepreneur is a businessperson who has vision and can see an opportunity and grab it. You must be observant and have an understanding about where there is a need that can be filled with a business and then capitalize on that need. There are so many small business opportunities out there already available and many more that can be invented. This is the first in a series of blogs that will overview various business opportunities and interview entrepreneurs who who successfully built their own business.

The first installment is vending business and I will relate how I started mine and what made it successful. I started, operated and sold my vending business many years ago. The vending industry has changed since I was in it, but the concept of how to go about fueling your entrepreneurial drive still works for whatever opportunity you want to pursue.

First off, when you want to build a successful business you will do the best when you do something that you love. If you love to do it you will naturally have the knowledge and skills to do it, or at least you will have the motivation and interest to develop the necessary skills.

My career choices early on were everything to do with driving delivery vehicles that went from place to place providing services, making sales and deliveries. I was working in a grocery store when I was 20, stocking shelves. Whenever any deliver person came into the store I was compelled to talk to them and ask them about their job and what it is like. One day I was talking to the bread guy and he said he was looking for a helper, so I started working for him delivering bread to stores and restaurants. This was my entry into the route sales business. After that I worked for bottled water delivery, coffee service, courier routes, newspaper route, Sysco foods and UPS. In the middle of all that I decided to start my own vending company.

I was 30, I was managing a bottled water company and doing well. Whenever I was making deliveries to businesses I would always see people getting things from the vending machines, I learned that having vending machines was an important part of a business for a fast and easy way for workers to grab a snack and a drink during their breaks. I was fascinated with this. I also observed, however, a lot of frustration over vending services. Machines were often empty, out of order or not stocked with the things people want. I would often see post-it notes on the machine begging the vendor to put a certain item in the machine. I overheard on many occasions people complaining about the vending machines always being out of the things people want. It was clear, many vending machine companies were not taking customer service seriously. I became passionate about wanting to provide vending machines along with excellent customer service and I would destroy my competition.

That was the motivating factor for me to start my vending machine business. I did not know much about vending other than the fact that somebody goes and fills the machine with stuff and takes out the money. So this is the key to starting any business; I researched and researched. One of the things I did was I went up to vendors when I saw them and asked questions about the business. I would ask questions like where do you get merchandise for the machines, where do you get machines, how do you get businesses to let you put a machine in their place? Many were not willing to answer those questions so I had to ask a lot of people to get a few nuggets of information. I took good notes and continued my research. I followed up on information by finding the places where vendors say they get supplies and I went there and asked more questions telling the suppliers that I am starting a vending business. They wanted another customer so they were more willing to fill me in. No matter what business you want to build, Once you are able to find suppliers who are willing to work with you; you will be on your way.

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I bought a load of brand new bulk candy machines from one vender and went around to retail shops and placed candy machines in hair salons, dry cleaners, offices and bars. These are the machines where you put a quarter in, turn a dial and a handful of bulk candy comes out. It turns out bars were my biggest selling locations especially with Red Hots and Peanut M & M’s. I also found a vending machine repair service who refurbishes soda and snack vending machines and sells them. He also delivers the machines which is helpful because they are big and heavy. I bought a bunch of machines and I negotiated a discount because I bought several machines at a time. Once I had the machines I went to office buildings and factories and warehouses and simply asked the managers if they are happy with their vending service. Many of them were not. So I sold myself describing my many years of excellent customer service in various route sales jobs and promised I would do all of the things that their current vendor is not doing. It was surprisingly easy because vending machine operators in that area were really bad at that time. I know customer service and I convinced the customers that I would do better and they were sold. I convinced them to cancel their vending service and get their vendor to pick up the machines and as soon as they did, I put my machines in.

I bought my product from warehouse stores like Costco, Smart and Final, and others. Wherever I got the best prices or wherever there was a good sale on cases of product. I bought a used cargo van from a clearance dealership who sells fleets of vehicles to large companies. They had a fleet of cargo vans that had been traded in for a new fleet. They refurbished the trade ins and sold them cheap, the one I got was very reliable. I named my business The Snack Specialist. I specialized in providing snacks in businesses. I learned how to repair or replace the components of the machines. I stocked parts so I Could make repairs quickly.

It was a successful business, I built it from scratch and had to sell it due to family issues, but I made a big profit on the sale. I split the business into three routes and sold it to three individuals who were looking to get into the business.

That is my experience with the vending business. I am sharing this because I hope that if you have the entrepreneurial drive and want to start any business weather it be vending or something else, you can apply these principles to create your success.  In a future blog I will relate what it was actually like running my vending business in more detail. Spoiler alert, it was great! I had all the freedom and flexibility to do many other things like pursue my Scuba Diving hobby. And I made some good money that set me up for another successful business endeavor that I will also write about soon.  Please feel free to comment or ask questions.