Other Frequently Asked Questions
How often will I need to service my machines?
If you are in high-traffic, high-producing locations, you will typically service your machines 1-3 times per week. Servicing a machine does not require a lot of time (typically 15 minutes or less), but maintaining a well-stocked and clean machine is an absolute must. Otherwise, your sales will suffer due to the machine not functioning properly.
What type of licensing, paperwork and insurance will I need?
Each state has different regulations and licensing for vending businesses, so you will need to contact your local licensing department. It is also highly recommended to purchase insurance for your machines in case of vandalism or natural disasters. More times than not, the best options you can find is to go through local insurance agents.
While the decision is ultimately yours, the majority of vending operators establish their business as an LLC. You can use your personal lawyer or accountant to get this setup, or (if you’re more savvy) go through a service such as LegalZoom.
Additionally, please be aware that there are benefits of registering your business under one of the following categories. A basic internet search will yield all of the possible benefits of registering your LLC as:
- A small business (through the SBA)
- A veteran-owned business
- A women-owned business
- A minority-owned business
- A business owned by someone with a disability (deaf, blindness, etc.)
This is not an extensive list – but should certainly get the wheel turning!
Do I need a truck or large vehicle to service my machines?
With only a handful of machines on your route, a dedicated service vehicle will not be necessary. You can use your personal car while your servicing a handful of machines.
However, if you’re serious about growing your route, you will eventually need a larger vehicle to transport larger quantities of products without making return trips to your storage facility.
How big of an issue is theft or vandalism?
This really depends on a lot of factors – the main one being an inside or outside placement. If your vending machine is inside of a building, you will typically deal with a lot less vandalism and theft issues. However, if you have a vending machine that is setup outside, you run a much higher risk of your machines being broken into or graffitied.
That’s why you will typically see a lot of vending machines enclosed in metal cages when they’re outdoors. The vending owner uses the caging to protect it from the elements and deter any criminal activity.
Do I have to pay a portion of my sales to the business or location where my machine is placed?
The majority of locations expect to receive some type of commission from your vending sales in exchange for “renting” you real estate from which to sell (especially if they have received commissions from their previous vendors).
You can typically negotiate a 15%-30% commission rate, depending on the location type and foot traffic. Experienced vending business owners use the tactic of offering a higher commission rate in exchange for exclusivity within a location – meaning their machines face no competition onsite.
What are the best types of locations?
You can learn more about how to land the most profitable vending locations in Chapter 3, but we’ve typically found that schools are one of the best options.
Why is that, you ask?
Here are the main reasons:
- Schools have consistent and static foot traffic (students go to school 5 times per week and it’s the same students who go to school everyday, so they know what you sell in your machines).
- Kids love buying from vending machines – it’s a fun experience for them.
- Students don’t usually plan ahead to bring snacks with them to eat throughout the day.
- Parents give their kids money to buy snacks from school. A lot of the time, those snacks end up being from the vending machine.
Some other good location types are offices/office buildings, gyms/recreation centers, YMCAs, and hospitals.
How profitable is a vending machine business?
The profitability of your vending machine route will depend entirely on the locations you secure (that’s why we dedicated an entire chapter to this topic). If you’re able to secure high traffic locations with little to no food or drink competition, your business will be a lot more successful.
In addition, being able to secure competitive product pricing will give you higher margins on each product sold, meaning more profit for your business.