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Vending Business – What is vending machines, Where To Start

Hello! Today we will talk about the vending business with vending machines.

From this article you will learn:

  1. What is vending;
  2. How to start a vending business;
  3. Legal aspects of the vending business;
  4. What are the types of vending machines and how to choose the automatic machine;
  5. Reviews and recommendations of entrepreneurs in the vending business.

Vending is a relatively young industry for our country in business. The activity is based on the receipt of profit from various kinds of apparatus for the sale of goods or the provision of services. The case has its own peculiarities, pluses and minuses. With a competent approach to site selection, product range, equipment and attentive attitude towards customers, there is a great chance of success.

What is vending and vending business?

Vending is  the sale of goods and the provision of services through vending machines. Vending has become very common in the world as a very convenient and not at all demanding way of doing business or providing services.

Surely you at least once bought coffee in vending machines or paid for any services in the form of a refill on the phone or home Internet. This is vending machines.

In the modern world, the leaders in the number of vending machines are Japan and the United States. Approximately 30-60 people per 1 vending machine. In Russia it is not so developed business, on one electronic seller it is necessary from 4-7 thousand people. Competition is minimal, especially in small towns. If you hurry, you can take a profitable niche in this type of business.

How to start a vending business

start a vending business vending machines How to start a vending business

How to start a vending business, and how does a novice not get lost in all aspects of the business? We will talk below and give a small step-by-step instruction. Also you can read an article on where to start your business .

Step 1: Choose an idea in the vending business

Before choosing a business idea or referral to a vending business, you need to study the work of competitors, determine the niche most profitable for starting, and study the purchasing power of the population.

What can I sell in vending machines:

  • ready meals – snacks, gum, drinks in jars and stuff;
  • products that require cooking – coffee, tea, sweet wool;
  • non-food goods – books, magazines, flowers, toys, cigarettes, household chemicals, office, umbrellas;
  • services – replenishing the balance of the phone, providing information, printing, etc.

To attract the attention of potential buyers, you need to think about an unusual product. It takes fantasy and non-standard thinking. For example, the Chinese came up with the idea of ​​selling live crabs in containers. No less unconventional idea – to sell dishes to later break it and relieve stress.

In our country, the services that can be obtained through the machine are limited to payment functions. But abroad are widely used apparatus for massage, manicure, photography, photocopying, charging gadgets, cleaning shoes. There is even a vending machine-toilet. In tourist cities there are devices with information services.

It is better for beginners to start a vending business from popular automatic machines, for example, from producing coffee, and after a while to install devices with original products or goods.

Step 2: Drawing up a business plan

The business project should be developed in the most detailed manner. In it it is necessary to specify the introductory information:

  1. activity: trade in goods, products or services;
  2. form of ownership (individual entrepreneur);
  3. form of taxation;
  4. the way of conducting tax accounting (independently or with the involvement of a specialist);
  5. geography (locality and the number of people in it);
  6. planned number of devices;
  7. the range of goods or services, if any;
  8. the sum of the “financial cushion” in case of unforeseen circumstances.

The goal of any business plan is to calculate the profitability of the vending business in a particular geographical location and to forecast its feasibility.

A competent business project contains the following sections:

  • Description of the characteristics of services or products with detailed information on the assortment, certificate and rights to sell.
  • Information about the company indicating the scope of activities and if there is experience.
  • Results of market research. This section describes the assessment of trade in the world and in Russia, the population of the geographical location, inflation, factors affecting demand, consumer preferences, the classification of vending machines for demand and costs.
  • Classification of machines for the payment device, OKVED, type of products and management.
  • If you plan to receive employees, then you need a section – an organizational plan. It contains: job descriptions and data on staff.
  • Marketing plan with the definition of the target audience of consumers, methods of stimulating sales. It also indicates the analysis of customer needs, the evaluation of competitors, business risks and opportunities.
  • Production plan with information on the lease of premises and on the purchase of machines. The section also contains a graph on which the project is implemented.
  • A financial plan containing the originally invested money and the costs of the business.
  • Efficiency analysis – a section containing the economic indicators of net income, the payback period of costs, the profitability factor.
  • Analysis of the risks possible for the vending business (failure, lack of spare parts, lack of raw materials, vandalism). It also reflects the ways to solve these problems and the break-even point, when revenues cover losses.
  • The project summary contains: business objectives (development of the vending network, attraction of investors), description of the project (location of machines, area of ​​the site, mark-ups for goods or services, operating mode), performance indicators, implementation costs, sources of financing.

Here is a detailed article on how to make a business plan and what are the main sections of the business plan there.

Step 3: Legal registration of the vending business

To legalize the vending business, you need to select a registration form.  You can open an LLC or register an IP .

Next, you need to decide on the taxable nature of the taxation , in Russia you will be satisfied with three:

  • UTII is the simplest option.
  • A patent is chosen by entrepreneurs who will not create a separate legal entity.
  • A simplified system of taxation and accounting provides for payment of 6% of total income or 15% of income less costs.

Automatic machines not only sell finished products, but also produce goods from raw materials (for example, coffee, pizza). Depending on the type of activity, a suitable taxation system is chosen. Also important in the choice of the system is the presence or absence of hired workers.

The businessman should find out in the local tax inspection information about the simplified system and UTII. Since these systems are regulated by the laws of the subjects of the Russian Federation.

Attention! UTII is paid by owners of vending machines with toys, snacks, chewing gum, newspapers, books, cigarettes and other things. Vending machines with coffee and other drinks provide catering services, but do not have a room for service, so they do not fall under a single tax.

Step 4: Preparing documents for the vending business

To register a PI, you will need the following documents:

  • full photocopy of the passport;
  • application for registration of IP;
  • statement on the choice of taxation;
  • copy of TIN;
  • foreign citizens to grant permission for temporary registration;
  • receipt with state duty.

At the businessman at opening vending business should be on hands documents on the bought devices:

  • certificate of conformity of the State Standard of the Russian Federation.
  • equipment passport;
  • specifications;
  • equipment;
  • guarantee coupons;
  • conditions for long-term, uninterrupted operation.

For business vending there is no specific code in OKVED. It is customary to specify such values:

  • If the business is based on payment machines (52. 61. 2).
  • For copying and printing documents through the devices (74. 83).
  • To sell any products and products in vending machines (52. 63).
  • To carry out business with massage chairs (71. 40. 3).

Step 5: Choose a vending machine: where to buy, second-hand or new

Choose a vending machine where to buy second hand or new

To begin with, it is necessary to decide whether these are new devices or those already in use. Of course, the price for the latest machines is much lower. But we need to take into account the fact that the SES quickly approves new devices, without any problems. For the used equipment, inspectors apply the most stringent requirements.

There is one more reason for new equipment. Companies that sell new machines often conduct training on the basis of the vending business. Do not neglect free training.

It is important to find a supplier that offers not only devices, but also consumables, and guaranteed service. Popular automata of such manufacturers: Bianchi, Venson, Jofemar, Necta, Unicum, Azkoyen, Saeco and others. A warranty card is attached to each machine.

After the purchase of equipment, goods and consumable raw materials, SES makes examinations and on their basis gives confirmation of the safety of products and the equipment itself.

To implement the vending business for the production of coffee, tea and soft drinks, you need to take care not only of the power supply, but also the connection to the water pipe and filters.

Cash registers are not needed, because inside the machine already has everything you need to settle with customers. If the device does not provide non-cash card payment, then you can install it additionally.

Each vending machine should contain information about the entrepreneur and his contact number.

Step 6: How to choose a place for a vending machine

  • First, the place should be crowded.
  • Secondly, you need to pay attention to whether people are on the move (busy) or are bored and are waiting for someone to happen.

There is a method in which two machines are placed at a certain distance in a place where people go by a stream. The man saw the gun and noticed that it would be nice to buy coffee, but did not fit, then he passes a certain distance and already makes the second purchase of the machine.

Of course, it is worth considering the age categories of people. For example, machines with toys and sweets are best installed in children’s centers, circles and near schools.

You can agree on the installation of snack and coffee machines in polyclinics, educational institutions and office buildings. Usually the management is meeting halfway, because it is interested in comfortable working conditions for its employees.

You can install the devices in the streets, but there is a high risk of vandal attack. Most devices have their own temperature regime for uninterrupted operation: at least 5 degrees below zero, and not above 40 degrees of heat. Therefore, it is better not to put the apparatus in the fresh air.

In shopping and entertainment centers, vending machines increase the loyalty of visitors to the institution. In the end, all remain in the black and the businessman, and visitors, and the owner of the object.

Action plan for installing the vending:

  1. sign a contract with the management of the institution;
  2. find access to the electrical network and if necessary to the water supply;
  3. install and run the equipment.

Rent can be from 1000 to 4000 rubles per month. This is about 10-20% of sales profit. But if you try, you can agree on a free rental. To do this, it is necessary to inform the owner of the premises (director) that the vending machines are necessary for his employees and to attract the attention of customers.

How much to put vending machines

The opinions of experienced businessmen differ. Some started immediately with a large number of machines and were satisfied, because the initial costs quickly paid off.

Others advise to put first one maximum of two machines, to monitor the feasibility of such a business, and to understand whether they should be engaged in this region.

How best to accept payments in the vending

It plays a big role in making a profit. Not always a person has cash, bills or coins. Therefore, you need to install as many payment systems as possible. This is a coin acceptor, a bill acceptor, and plastic cards. It is necessary to take care of the system of delivery of change.

Maintenance of vending machines

The loading of the devices with the goods takes several hours a week, at the same time one must monitor the level of demand and the volume of sales. If the product is not in demand, the installation site may be incorrectly chosen.

It is important to keep the machines around the clock in working order. If the consumer one or two times stumbled upon a non-functioning device, then he is unlikely to approach it in the future.

It is necessary to monitor both the accuracy of the apparatus and the availability of instructions for use.

Determining the price of services or goods

There is no unequivocal decision on the amount of the cost of services, goods. Too high or very low price can bring unpleasant consequences to the business. It is necessary to conduct observations and analyze prices for similar products from competitors. The size of the mark-up is reasonable to compare with the incomes of potential buyers and with the remoteness of the device from traditional stores.

How much does it cost to open a vending business

The article of expenses of the business-project of vending contains such items:

  1. purchase of equipment (apparatus and components);
  2. installation;
  3. rent;
  4. technical inspection of apparatus;
  5. purchase of goods, supplies, products;
  6. advertising;
  7. permission from SES and receipt of relevant documents;
  8. permission from the electricians and approval of the fire inspection;
  9. taxes;
  10. Unexpected expenses.

The purchase of devices for vending costs 150-300 thousand rubles, if it is a question of new equipment. The price for second-hand devices is about 90-120 thousand and depends on the level of wear and life. You should pay attention to the technical inspection of such equipment before purchase, there is a risk to spend a round sum for repairs and stay in the red.

At the initial stage of the business, it is better to engage in the operator’s functions independently: cash collection, laying of raw materials, goods, products, inspection. When the business is established, you can hire staff.

Evaluation of the perspective of vending business

Before you try the strength in the vending you need to evaluate the prospects. To do this, it is important to understand whether specific devices are relevant in one place or another. In other words, you need:

  • to estimate the demand for the goods;
  • explore the infrastructure of nearby outlets;
  • determine the number of competitors;
  • do analysis of the level of related business;
  • learn and analyze information about already operating vending points in a particular area: the size of the profit, costs.

Vending business assumes no large expenses, minimal investments in comparison with the usual sale of goods through outlets.

According to reviews guarded vending business, this business can bring from 1000 rubles a day and more. On average, the income from one machine is 10,000 – 30,000 rubles per month. The cost pays off in about 1-1.5 years. All this is real with a competent approach to business, patience and the ability to achieve this goal.

Pros of vending

  1. Low cost of rent, after all the trading device occupies a small area.
  2. The working condition of several devices can support one person, and in the first stages the businessman himself.
  3. Ease of buying goods or getting a service, because all procedures are standard and have instructions.
  4. You can get additional income by placing advertising on the case of the device.
  5. The machine is designed for continuous sale 24 hours a day.
  6. If any of the devices ceased to make a profit, you can transfer it to a new place without large expenses.
  7. You can sell the entire vending business, if you can not succeed.
  8. It is easy to expand the business, without complex schemes, simply by purchasing more devices and installing them on selected points.
  9. The ability to quickly learn the basics of vending business.
  10. In Russia, this line of business has many free niches.
  11. You can quickly change the range depending on the demand of customers.

Disadvantages of the vending business

  1. Incorrect site selection can cause losses.
  2. It is necessary to regularly monitor the filling and cleanliness of the apparatus.
  1. Possible damage to machines in the street, in the passage and the subway.
  2. Purchased ingredients for the preparation of beverages – imported and expensive, so not all buyers can afford such products.
  3. Not all age categories of people are able to use automata, older people find it difficult to understand the functional.
  4. Lack of quick payback – it will take at least 1 year.
  5. In some megacities, there has already been a fierce competition.
  6. Seasonality of some machines, for example, on the sale of soft drinks will not bring profit in the winter.

Testimonials of experienced vending business owners

Testimonials of experienced vending business owners start a vending business vending machines

Reviews of real experienced businessmen will help to evaluate the effectiveness of vending, warn against possible pitfalls and give efficient advice to beginning entrepreneurs. These reviews we collected on the Internet and publish in this article.

  • Michael. Warns that you should not contact Chinese equipment. Frequent breakdowns and unstable work will haunt the business for many months. Return the devices under warranty is almost impossible. Repair of vending machines is expensive. Therefore, do not take cheap Chinese devices, and then overpay for their repair. There is a law – the miser pays twice.
  • Another businessman , told that in early 2016 he opened in the resort city of the device for the production of souvenir coins. The equipment can make chasing according to the given symbolism. This does not require consumables. After the coinage occurs on coins worth 1 ruble.
  • The owner of the whole network of devices Alex.

  • He believes that vending is an intellectual business. On the way more than once there were problems. It was necessary to constantly look for ways to eliminate them, and as a result, revenue increased. To increase sales, Alexei installed a bill acceptor on each device. Then he rounded the prices, which led to a decrease in the amount of work with coins. The plans to introduce a system of payment by bank cards.
  • Sergei  warns about the possibility of being deceive the staff. Periodically hired workers gave him wrong amounts from the cash register. We had to conduct an investigation. It turns out that the operator made a withdrawal of funds independently.
  • Fedor  owns a network of machines with toys. To profit, the businessman installed the apparatus in theaters. The income turns out to be stable, one minus is the high cost of rent.
  • Svetlana Timoshenko says that the vending business has seasonality. In high schools in summer it is simple because of vacations, and in airports the peak of the season comes for the summer. It is necessary to take into account seasonality when planning a place for an automaton.

How to quickly start a vending business with minimal incomes

How to quickly start a vending business with minimal incomes

Below are four ways to get started quickly in the vending business.

Purchase of vending equipment

At the initial stages for the test period you can buy inexpensive second-hand equipment. This is the minimum cost, fast start, but also the risk that the machine can serve you less.

Investors

If there is no money to buy equipment, then people can found ready to invest in a business project of vending. At the same time, the agreement is signed with the terms agreed upon the two parties.

Partnership

Vending companies will provide the equipment and necessary materials to the businessman. At the same time, a partnership agreement is signed between the parties. Costs are minimal, but there is an entrepreneur’s dependence on the company: A certain percentage of the profits goes to the partner.

Buying machines on a lease or lease basis

If it is difficult to predict the amount of profit from the devices, it is reasonable to use leasing or equipment leasing. After all, the cost of the new machine is rather big.

Secrets of success in vending

To succeed in the vending business, you should always keep in mind the following points.

  • The appearance of the device should look at the maximum neat and tidy. You should take care of the cleanliness of the place. If it’s a machine with coffee, then it’s good to put a container for used glasses next to it.
  • You can not save on quality. The amount of profit depends on how delicious the food, tea or coffee offers the machine.
  • Instructions for using the machine must be present on every equipment. It is desirable that it be concise, understandable, printed in large letters. You can make a step-by-step instruction, where each step will be under the corresponding button.
  • A chip is a feature that distinguishes the device from hundreds of others. For example, an exclusive grade of coffee, certain purchase hours at a discount, every 10 customers receive a discount. Above the improvement of the machine it is necessary to constantly work and a positive result will not keep you waiting.
  • Constantly take care of the assortment. To study the demand of buyers. Watch the competition.

Currently, vending has just begun its development, but the pace is fast. Perhaps in two years the competition will increase, and beginners will not be so easy to succeed. Therefore, if you start a vending business, then it should done today.

About Arslan Arain

HI, Friends, My Name is Muhammad Arslan Arain. i am a Business Adviser ,Web Developer, SEO Expert And Online Instructor Working Online For Last 5 Years on the Internet Several Successfully.You Contact Me anytime 24/7

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