Choose the Best Vending Machine Locations
The vending machine business, like any other, is meant to make a profit. Before you even think about mapping out routes or choosing which products to sell, however, you need to find the best locations for your vending machines. The location is the most important aspect of ensuring your business is sustainable and profitable. Even with the right research, any place will not guarantee a good profit, but you can definitely stack the odds in your favor by following the important guidelines listed below:
- Areas with high foot traffic such as malls and entertainment or residential complexes
- Large offices or multi-business office parks, manufacturing plants, schools and universities with at least a few hundred people there
- Locations with a few or no other food and beverage options such as parks, jails, motels, gas stations, and service businesses
- Places that require a lot of waiting such as car repair shops, airports, bus and train stations, hospitals, medical centers, and salons. Even a public library will be a good location from that perspective.
When deciding whether to put a particular vending machine in a location or not, consider not only the surrounding area but also who the target customer is. Different products work better with different demographics – child-friendly snacks, gumballs or candies with pictures of soccer players or cartoon characters will work best near schools, while healthy snacks, protein bars, and dried fruit will be preferred good selection if your vending machine is located in front of a gym, for example.
Using a vending machine locator service to do the research for you
While it may seem easier to hire a locator service to find the best places for your vending machines, they do not have the best reputation when it comes to looking out for your bottom line and charging large fees. They may require a considerable percentage of the dollar amount charged by the location up front. This practice opens the doors for scammers to charge a fee but never actually find a location for you. Unscrupulous location finders can also convince you to put a machine at a certain location they have not researched appropriately. As long as they have their money, they could find any location they want and convince you that it will be profitable even without making sure.
One of the main reasons why vending machine locator services often fail to deliver on their promises is that their pay is incentivized. All they have to do is find a location owner or manager who is willing to have a vending machine in it and collect a fee from you. They have absolutely no responsibility or guarantees about how well your products will sell in that location. And you as a vending machine owner have no data to go on until the machine sits there for several months and you can gather the information on sales, profits, and expenses.
If you wish to avoid all these problems with a locator service, you must take special care to find a reputable one. They can be very helpful if you do not have the time or ability to identify the best locations for your vending machines on your own.
One of the best ways to find a quality vending machine locator service is to ask other people in the industry which ones they have used successfully in the past. Honest reviews and testimonials can help you decide. They should be willing to put the contract in writing and clearly outline everything they are responsible for and every task they will complete. If you do not understand any part of the contract, they should be willing to go over it with you or allow you to talk with a lawyer. Some information that should be covered includes all fees and commission payments if any, terms of payment and legal relationship and basic information such as the general area you are interested in, the number of vending machines you want to place and even their products and preferred customers.
Find Vending Machine Locations Yourself
If you do not have the funds to hire a location service or want to have a more hands-on approach to your vending machine business, you can certainly go out and find great locations on your own. In the end, the success or failure of your business is ultimately your responsibility and, since a large part of it is the locations your machines will be in, you might want to tackle that part without any outside help.
When looking for great profitable locations for your vending machines you can approach new businesses in the area as well as existing ones.
Approach New Businesses in the Area
When it comes to businesses moving into an area, the first vending machine business that gets to them with a reasonable proposal may win out over the others. If you want that to be you, it makes sense to pay attention to the commercial ebb and flow of companies in your area. Business journals and online announcements may help keep you stay informed so you can offer to fulfill their vending needs before other providers contact them. In smaller towns and rural areas, local newspapers may offer more information.
Joining local business organizations is another great way to not only keep abreast of any development or influx of new companies into the area but also to network with existing business owners and get their recommendations as well.
Once you identify a company or location at which you wish to install one or more vending machines, follow the steps listed below to seal the deal.
Ask Existing Businesses For a Chance
Unless it is a brand new building, the premises will most probably already have vending machines operated by a competitor, but you shouldn’t miss the opportunity to place a machine anyway. Talk to the premises management or business owner and try placing your machines too.
Follow these basic steps to identify profitable locations for your vending machines and convince their owners or managers to allow you to place them there:
1. Gather research on existing companies that may need vending machines
As you travel around to different businesses in your area, take notes about the basic things that make a place a good or bad location for your vending machines. For example, you go to get your car serviced, check out the vending options available. Even if vending machines are already installed in the location, see if you have something different to offer that the owner may prefer. Placing your machines in such locations can be highly profitable. If you deliver great customer service, you will have the chance to stand out and push your competitors out.
It is possible that the owner does not have a positive relationship with the current vending machine business owner or they are dissatisfied with the service. Old, dirty, damaged or poorly maintained and stocked machines, machines with poor selection or selection different from yours, machines that operate only with cash – all these signs give you the perfect opportunity to approach the management with a better alternative. And even when you can’t recognize all these signs, don’t forget, that every single business is done by people. Ask the premises owner/manager if they are happy with the existing service and pay attention to what they tell you. There might be some key information for you between the lines…
Having said that, once you have your vending machine placed remember it is vital to get the best location within the right location. A vending machine stuck in the back corner won’t bring you the expected financial results. Try to get it located at the front counter or the front door. Make sure your vending machines support telemetry. See how VendSoft integrates with your telemetry providers to help you see how profitable the location is in real-time.
While gathering information about how many people use the vending machine may be quite difficult without loitering suspiciously in the area, if you happen to go during peak hours such as lunchtime, you could get a general idea about how popular the vending options are.
2. Always be ready to market your vending machine business and yourself
You should be prepared to approach a location owner and ask to talk with him about the opportunities you can offer. Even if you are just starting out, it is important to present yourself as a successful business owner. You are not just some guy begging property owners to let you put a machine in their building. You are a business owner with a mutually beneficial offer. Excellent logo design and company uniforms and literature can help them take you more seriously.
3. Determine potential profits for each possible location before sealing the deal
In order to figure out the commission you can pay to the location owner in order to place your vending machines there, you must come up with a reasonable profit estimate. For example, if you wish to place a candy bar vending machine in a location, subtract your wholesale cost from the retail sale price and multiply it by the estimated products sold each week. The data you gathered in step one can help you figure this out. Remember to consider your state sales tax in this equation as well. Once you know what your profit is, figure out for a reasonable commission to pay would be. You do not want to cut into your profits too much, but you also do not want to short-change the location owner.
Once you have your vending machine at the spot already it is time to start analyzing the data associated with the sales it generates in order to determine the vending machine efficiency. Learn how VendSoft can analyze all the data collected, help you make informed decisions so you could improve your vending machine profitability.
4. Set up an appointment to talk with the property owner or manager
With a professionally printed business card and brochure in hand and a company logo shirt, meet with the owner or property manager of a location you wish to place a vending machine in. Be pleasant, positive and professional from the first handshake and smile to the end of the meeting where you think him for his time and promise to follow up. Expect the meeting to be quick and prepare ahead of time so that all the important information is shared. List the benefits of properly maintained and stocked vending machines such as employee satisfaction, increased foot traffic and more patient customers at a service business.
If you have identified a location that has existing vending machines on-site already, you should ask the owner if he is satisfied with the relationship. If they answer “No” you have the perfect opportunity to offer something better. If they answer “Yes” it is important to follow up with the unique benefits that your vending machine business can offer. This could be a different type of product, exceptionally better service or personal touch that only you can provide. The most important thing is to make the location owner feel vital and appreciated throughout the entire process.
Even if the property owner decides he does not want your vending machines at his location, always leave with a smile, a handshake, and a thank you for his time. Leave a business card and a brochure or pamphlet if you have one and ask him to keep you in mind if anything changes.
5. Record all the locations visited, owners or managers and their responses by date
While a business owner or property manager may say “No” to you once that does not have to be the final answer for all time. You should, of course, never harass or continuously bug someone to try to get their business. However, you can make a follow-up contact after a few weeks or a month to keep your vending machine business fresh in their mind. Additional contacts in the future may just come at the perfect moment when the vending company they were using pulls out or fails to satisfy their vending needs. You should always be ready and willing to provide top-quality service and products the moment they change their mind.
More on VendSoft
Once you have your vending machine at the desired location it is time to start delivering great customer service, while at the same time optimizing your operations– scheduling and streamlining your daily vending routes, tracking inventory purchases, critical stock levels and expiry dates, calculating average product cost and taxes, determining top-selling products volume-wise and margin-wise, calculating P&L and so on. Learn how VendSoft can analyze all the data collected, remotely monitor KPIs with its rich reporting system, help you make informed decisions so you could run your business more efficiently.
Eager to learn more about how VendSoft can help you maximize your vending machine performance? Start your free 14-day trial now