Vending Blog Question - Defend Against Vandalism

Question: How do you prevent vandalism to outdoor machines?

ANSWER: If you own vending machines (outdoors or indoors) you will get people vandalizing in some fashion. The first thing to remember is that there is no way to prevent vandalism. Even the government, in all of it's power, is completely incapable of preventing someone from doing something wrong. If someone feels like hurting your vending machine, they will, and we can do very little can stop them. All that we as vendors can do is to try to deter it. With that said, there are several things we can do to deter the act.

Not to suggest that this isn't a great question, it is! Unfortunately there is no "perfect" answer that will solve the problem. The main type of vandalism you will get is people trying to break into the machine to get the money. Other than that, some machines just get "rough use". In general always place machines in well-lit, open areas. Preferably places where there are always people either walking by or maybe a nearby attendant (like at gas stations). I also like to place large intimidating locks on the machines. It doesn't make it any more secure, but it looks tougher to crack and scares away most criminals. Vending is a business so you may find locations that are very profitable but the machine does take a bit of abuse. I've had machines broken into but kept it on location because it was a high volume and profit location.

Ultimately, if you have machines on a location that continues to have problems, your best defense is to simply move it. Occasionally, even the best of locations, are not worth the hassle. Move on to a more profitable location. That is why I always say that finding great vending locations is the most important skill a vending operator can have.

How Many Vending Machines Do I Need?

First, I need to say thank you for everyone signing up for my Vending Newsletter. I cannot believe how many people have gotten on board to take such an active roll in learning about the vending business. For those of you who have not joined, I'll give a little teaser. All newsletter subscribers get to ask me any vending question they want, for free! I am happy to have been able to help out so many people so far and look forward to your question.

I have been getting a lot of questions lately from people who are looking at vending to replace their "normal" work income. Often the question will be stated like this, "How many vending machines do I need to replace XXX dollars a month?" I have also noticed that most of these people are referring to bulk vending machines. I suspect that the reason I am getting this question is twofold: #1 the economy has everyone scared and #2 I suspect the biz-opp scams are promoting hard (because of #1).

I would like to take this time to make a couple points. Vending is a great business, but if you are looking to it to get out of a job you hate, or feel no security with, then owning a vending business may not be the answer for you. Your answer may simply be to find a better job. If that is the case, I suggest you check out a site: 48 Days to the Job You Love by Dan Miller. His books helped get me on the right track.

If after reading his books you determine that having your own business, even a vending business, is right for you then I say welcome!

Vending is Everyplace - Don't Get "Tunnel Vision".

I realize that this video has been floating around the internet for a little while now but I decided to post it anyway. I'm not trying to make any kind of political statement, I am trying to make a statement about vending:





Now like most people I watched this and thought, "Oh my God, you have got to be kidding me!". Actually the first thing I thought was, "How the cigarette vending industry is almost completely dead but somehow Marijuana vending is on the rise!?"

But then it dawned on me that this is a great example of how we need to stop thinking of vending as simply a gumball, candy or soda machine. Vending machines do everything from get us coffee, to our morning paper paper, to allowing us to drive on toll roads. Vending is everywhere, not just in the snack room. I am not suggesting we get into vending drugs but expand your mind and find a niche in the vending business.

Happy Vending!

Change your Vending Machine Locks

Regardless of whether you buy a brand-new machine or a good-quality used vendor, the first thing you will want to do is change the locks. New vending machines are shipped with what is known as a "shipping lock", which utilizes an especially common key, so you will want to install a more secure lock from the get-go. With a used machine, you may never know if anyone else has ever had a key, so the best bet is to have a trustworthy locksmith change the locks. Often they will not have the locks you need in stock. Surprisingly your best source for replacement vending locks is eBay.

If possible, I would recommend that you key all of your vending machine locks with the same key so you will not have to be fiddling through a pocketful of keys searching for just the right one while on location. If you have a larger machine, especially if it is in a public location, you may want to add either a hidden shackle padlock or a shrouded hasp for an extra layer of security.

Is your Vending Business Profitable?

The number one question people are asking me is how to fix a broken vending business. Before you can even begin to fix problems you MUST know your numbers. Are you even profitable?

What are your fixed costs?

What are your variable costs?

Remember that equation from school? - y=mx+b

OK, it isn't that complicated but that would be the best way to calculate it. Knowing your commission and product cost you can figure out your net profit. For sodas mine is about .40 = .75 (sales) - .36 (product cost) - 0.0 (0% commission, remember I do not pay commissions). Multiple that number by the average number of sales per service (obviously we would also add net profit from snacks but I want to keep this example as simple as possible). Now that you know your net profit you need to determine what your other costs are, i.e. fuel, machine depreciation and time. Subtract those costs from your total net profit. If it is negative you are not making money. If it is positive you are making money (you can then divide your cost of equipment by this number to get your ROI).

Sorry if this sounds complicated but you asked for it ;-)

Vending Route Fuel Cost

High gas prices seems to be on everyone's mind. While I am the first to say that if the price of gas should never destroy your vending route's profitability it does indeed take too big of a chunk. The next few Vending Blog posts will be some strategies that will help you minimize the effect they have on your profits.

Increasing Machine Capacity:
Increasing the globe size (for gumball machines), or adding a extensions to the backs (for machines commonly found on racks) help eliminate the need for frequent refills. At some of my locations I have given them free machine upgrades. Many of my snack/soda locations have been upgraded to larger machines and most of my "toy ranks" have been sdjusted to 25" (and larger) tower machines (with extensions on the back). Locations love it plus now I can go to them half as often (with twice the money waiting for me).

With the number of vending operators out there going under I have been able to get all the larger equipment at great prices. I will then list and sell my smaller machines on craigslist or eBay. If you sell and buy right this should not be a big cost - certainly with a payback of 6 months or less. I've even had several instances where I made money changing the machines!

Vending Question #4 - Where do you buy bulk candy?

Question: Where do you buy bulk candy?

Answer: There are many options for purchasing bulk candy. I buy for a wholesale distributor but I realize most people wouldn't want to order several hundred pounds at a time (especially since you only have two machines). I would suggest three techniques:

#1 - Local wholesale clubs (i.e. Sams, BJs, Costco). They usually have entire isles dedicated to vending supplies and they have the best prices. However if you only have a couple machines it may not be worth buying the membership.

#2 - Wal-Mart usually sells bulk bags of candy cheap, just watch your numbers. Each vend will be about 1/2 oz so a 2 Lb bags contains 32 vends and you should not pay more than $4 for it (that assumes a 50% ROI - return on investment).

#3 - Often I sometimes buy candy when it goes on sale after the holidays (50 - 75% off) at Wal-Mart or Target.