When entrepreneurs first start to considering vending as a business opportunity, one of the first questions that they often ask is if it is possible to earn a’ six figure’ income in this industry.
‘Six figures’, or $100,000 or more in pre-tax earnings per year is still seen as a reasonably good benchmark for success by many people. They want to know that they will have a realistic chance of hitting this income level within a few years before they put their time and capital into a new business venture.
Let’s look at some of the factors that typically separate the operators with ‘six figure’ vending machine business incomes from the rest.
Part Time or Full Time?
It is common to start off doing vending part time while also keeping a regular job. Some vending machine business operators make a nice income to supplement their day job salary. However, to reach the $100,000 profit level you will probably need to eventually go full time.
Understand Vending Machines
Successful operators understand vending equipment and closely follow industry developments. Understanding in these areas allows the business operator to acquire good quality machines for the best prices and to organize their maintenance effectively.
The winners in this business understand that branding is important. If you establish a name and a reputation for yourself over several years then you will find that new accounts will come to you instead of you having to go out and get them all the time.
The high income earners in the vending machine industry are organized and manage their time well. Computer systems and software can be used as a way of collecting data that can help a vending machine business owner make crucial decisions that can affect profitability. While some see vending as a way of earning easy passive income, the most successful players realize that this comes many years down the road and that there is a lot of work to do before you get to that point.
Master the Art of Sales
Getting new locations comes down to having an attractive offer and solid sales skills. To be successful you need to fine tune the art of scoping prospective locations, getting appointments with decision makers and selling them on what your machines can do for them and their business. Good vendors find ways of making their machines more marketable such as working in cooperation with charities.
While you can start off doing everything yourself you will soon find that to scale your business up to the’ six figure’ income level you will need to hire reliable staff to do the footwork for you while you concentrate on growing your business.
Always maintain the highest standard of customer service. Service machines regularly and keep them clean and presentable. Never give ‘decision makers’ at your locations any excuse to ask you to take your machines off their premises. If you maintain good relations with managers at each location you may even be able to sign them up for additional machines. This can be an easy way to increase revenue without having to find new clients. You will also get referrals from your clients if you keep them happy.
Most of the vendors that see a decent level of income learn how to deal with the issue of commissions. Selling your vending machines on the advantages that they offer to the staff, management and patrons of an establishment is better than selling them on a percentage of the takings. Successful vending machine business operators do however realize that some locations are so good that a commission can be justified if it is required to win the account.
Attention to Detail
Vending is a numbers game and the top entrepreneurs in this industry realize the variables that must be focused on to improve income levels. To get to a decent level of earnings you must maximize your locations, maximize the quality of your locations, reduce the frequency of machine breakdowns, reduce commission paid to location mangers and maximize the efficiency of your employees.
Getting the right product mix, or category management is also crucial so that your stock sells well and so that you don’t run out of some items quickly while others are slower to sell. In this way you can increase sales and reduce the frequency of visits to re-stock machines.
The Right Attitude
Determination and a willingness to learn are important attributes for an operator to possess. A vending business can be tough in the first year and you have to get used to constant rejection as you try to place machines. The key to success is to learn from failure and rejection and to see them as opportunities to learn how to improve and refine your systems until you find ones that work. Keep trying, trying and trying again and success is inevitable.
Could you earn a ‘six figure’ vending machine business income? With the low barriers to entry and low startup costs that this industry offers it is definitely an opportunity worthy of consideration.