Vending machines

[Sunstone]

Dear guys,

A vending machine I haven't seen before:

http://www.franchisebusiness.co.uk/hotbites/index.htm

Cheers,

Sunstone.

 

[XBenX]

Originally posted by Matt Mc
If anyone else is interested in vending machine investments i believe our company can help.

We currently have Drink Machines (Daquiris) returning guarenteed 22% Min Gross return PASSIVE.

Cost of machine is $5,700 + GST

If you are interested in more details please contact our Business Brokerage Division on (07) 3857 1336 or [email protected]

SOrry for the advertising but it does seem relevant and informative in this thread.

we have a few of these in the club - they sure didnt cost $6K but they arent managed either....

 

[Tony]

Hey XBenX,
So come on spit it out, how much did it your machine cost & is it the same as in the previous add? Also do you make similar returns as listed & how much work is required by you to maintain the machines?

Interested in seeing your reply.

Regards Tony.

 

[XBenX]

Same machines $800 upfront + sign maintainence/supply contract

Returns arent seperate from the rest of the business so I have no idea

Requires no maintainence... the staff onsite fill it up and I havent had one break (we have 4).

As mentioned the reason these are different from the ones above is they are part of an existing business and not managed.

no advice here just experiences

sorry if it sounded like i was baiting for selling something (I understand how it could be taken that way)

 

[Tony]

Hi XBenX,
Didn't think you were baiting, but i did want more info.

Regards Tony

 

[XBenX]

cool, I assume they essentially provide the machine at that price in order to create their sales (hence having to sign the supply contract)

just so its clear i dont own/operate the machines - i just manage the club

 

[Sunstone]

Dear guys,

A couple of useful local sites on vending machines.

http://www.ivmoa.asn.au/
http://www.ava.asn.au/

Cheers,

Sunstone.

 

[Sunfish]

Do you have anything more than a passing interest in vending Sunstone?

T

 

[Sunstone]

Dear Thommo,

The answer you seek is not so black and white.

Coin-operated devices have many synergies with realestate. More to talk about when you are down in Brissy.

Cheers,

Sunstone.

 

[Mr Ed]

I have two clients who run vending machines and their advise has been, run the same machines don't mix your models, that way you only need to carry one set of spares, and the same type of stock.

Location is everything.

Finance can be a bit difficult but is obtainable.

Buy an existing run if you can as they are already placed. From my understanding pubs can be difficult to get into because the spaces are sold.

Mr Ed

 

[Sunfish]

I have two clients who run vending machines and their advise has been, run the same machines don't mix your models, that way you only need to carry one set of spares, and the same type of stock.

Location is everything.

Finance can be a bit difficult but is obtainable.

Buy an existing run if you can as they are already placed. From my understanding pubs can be difficult to get into because the spaces are sold.

Mr Ed

Generally sound advice but you have no option to mix models, for many reasons. In my run I have six different manufacturers and often different models from each. Then you have a number of manufacturers of the coin acceptors who are constantly changing things. The last can vender I bought new had no user's manual for either the acceptor or the box. This is awkward and will usually cause a few "operator error" type faults until you get up to speed, but that's life.

I built my biz from scratch and trust me, it is very difficult and frustrating. Much better to buy an existing run and be willing to make fair offers for add-on runs to expand.

Just one more point: It is not for technophobes! If you do not routinely fix everything that breaks around the house, do something different. Better still if you can read a circuit diagram and use a multi-meter and soldering iron.

Thommo

 

[Mr Ed]

I agree with what you say. I supose the bit I left out was these guys do have different models the same as yourself. However they do try and buy secondhand ones that are the same as there current models. They've made mention more than once that they wished they could just have all their gear the same.

But not always possible.

And yes it's very "hands on" business.

Mr Ed

 

[D.T.]

Hi Thommo,

Sounds like you've done fairly well there, well done. In my inexperienced opinion, I'd be assuming placement/location would be the toughest part of it? Managing stock levels and reading technical instructions arent very difficult.

Therefore, can u tell me a little about how you sourced locations? Was it mostly 'cold-visiting' local businesses and asking them if you can leave a machine there?

-Kind regards

Dave

 

[Sunfish]

Hi Thommo,

Sounds like you've done fairly well there, well done. In my inexperienced opinion, I'd be assuming placement/location would be the toughest part of it? Managing stock levels and reading technical instructions arent very difficult.

Therefore, can u tell me a little about how you sourced locations? Was it mostly 'cold-visiting' local businesses and asking them if you can leave a machine there?

-Kind regards

Dave

Should've kept my mouth shut, or asked Acey to write my book.

I remember a review of the movie The Man From Snowey River which went something like "The best part of the movie was the horse chase. The worst part was the rest of it." The easy part of vending is looking at it.......

Lets start at the highest plane.... Nothing worthwhile is easy.
Let's then go to..... No profitable business is easy. (only unique skills can make an otherwise difficult buisness so)
The corollory.... If a buisness is easy everybody wants to do it so the entry price is high. eg Taxis. (apologies here to taxi drivers, I know it aint easy)
The conclusion...... Nine out of ten newbies will fail in a buisness which could be profitable, allowing the survivors to pick up the pieces and become more so.

Trust me! There is more to it than the ability to count money.

Nothing personal here Dave and I'll PM you one I wrote to another member.

Thommo

 

[skater]

Sorry, but I, too, would have thought placement was the hardest part. Am I missing something?

Cheers

 

[Sunfish]

Sorry, but I, too, would have thought placement was the hardest part. Am I missing something?

Cheers

Well yes, it is. So hard in fact that 9 outa 10 will not find enough profitable sites, hence my previous comments that No profitable business is easy and that you should buy an existing run where the seller has already done all that work. And don't begrudge paying a little goodwill.

Once you've found a site you must have the right machine for it. Not all machines are equal and only experience will tell you whether it's worth spending money on at all. You've got to be competative, or you wont survive. You've got to be able to keep them working reliably or you wont keep the site. You've got to be a service minded person because it is a service industry. You've got to be organised as you need to be in any small buisness. You've got to be self reliant and happy working alone, not everyone is. You must have at least $100k available for start-up. You must have another source of income but you can't work full time.

Someone with positively geared property with a low LVR could raise a LOC and use his spare time productively. Once debt free vending can give a nice return for a short week but getting established is harder than you think. Most who look at it with the view that they will buy just a few venders and make $50-100/wk and slowly expand become frustrated and fall by the wayside.

Case Study 1. An "investor" bought four new can venders, on site, for about $30k. He wasn't a service type and they were often empty. I bought them for $17k nearly a year later. One didn't work and was in the garage. Two others I moved off site when I wanted the machines. Only one stayed where it was and it would have done little more than pay it's original lease. OK at the price I paid. The meters indicated he could only have made a few thou while he had them. Owning them interfered with earning his primary income and expanding would only have made it worse.

Sorry if I was a bit curt, but writing these long posts is time consuming. If anyone who has already done his research has a specific Q I will answer if I can.

Thommo

 

[Lucifer_au]

I agree with Thommo.

With vending machines, it really is about two things:
1. a good site (a good site is worth more tha the vending machine).
2. service

Finding a good site is not massivly difficult, but finding the time to find a good site and then to re-site it and also the time to fill it and it can suck away your free time. I guess that is why it is low cost, because every investmenthas a trade of between time/cost. Vending machines are cheap (compared ot i.p.'s, but their time contingent is very high).

Rgds.
Lucifer_au

 

[wish-ga]

Hey Fredo, how are the vending machines going?

 

[fredo]

Still going strong 93 dollars per mth 12% after tax return

 

[likewow]

For anyone thinking of entering the vending industry, heres a tip i have picked up while helping a friend set up a vending biz.

Most if not all good sites are taken, meaning that vending operators try to get their vending machines into sites with the oppositions' machines already in them because sites without vending machines are without them for a good reason.