Watch out for these vending machine business scams, myths and unnecessary services. They'll burn up your budget, get you into terrible contracts, or just simply swindle you.
1) Business Opportunity Scams
Also known as "Biz Op", these promoters are getting a lot of clients as high unemployment rates push more people to find work.
Most of the Biz Op vending machine people are actually just salesmen, not real vending machine business owners. They usually make pie-in-the-sky promises that aren't ever going to pan out in reality. The better-prepared ones have profit projections worked up to "prove" how incredible the potential for growth is. Don't believe the hype. These people have never negotiated with a site owner or waited four hours for a late service person to come fix a machine that's broken four times in as many months. They just don't know vending, and because of that even the earnest ones can sell you a bill of goods without really knowing the harm they're doing. Some business opportunity promoters are so evil they'll take your money but never ship the machines you ordered.
2) Professional Locating Companies
Again, these people know more about marketing and sales then they know about finding good places for vending. To be fair, I should say that there are a few professional companies that are worth what they charge - the problem is you are more likely to find a bad locating company than a good one. Instead of hiring one of these firms, try to find someone with vending experience from your area. A local person with real vending machine experience will almost always out-perform a locating company.
3) Spend Too Much at Startup
Almost all new businesses make this mistake. They overspend when they start, investing precious dollars in things that aren't proven to work for their business, in their area. Save your money so you have enough to get through the first and possibly even the second year as you learn the ropes. Vending is an easier business to succeed in than other, but it takes time to iron out all the kinks.
Start small. A lot of vending machine dealers will try to make you buy ten or more units, but you can get a very good start with one or two machines - five at most. Get comfortable with your first machines, your suppliers, and your locations, then scale up. You'll reduce your debt if you start this way, and you'll minimize the huge headache of "I wish I knew that when I started."
4) Buy Old or Used Equipment
Used vending machines may look like a good idea, but they're not. Used machines can be hard to impossible to get parts for and to find good service people for. Besides, new machines sell more. Much more. The money you'll "save" by buying an old vending machine will cost you as much or more in lost sales. Also, nice locations and beat up old vending machines don't go together.
5) Buy a "Turn-Key" Business or an "Established" Route
Almost all "established" routes are actually promoted and sold before they're ever established. The owners of these ghost routes only develop them after the sale, and even then they don't do anywhere near the kind of work you'd want put in for what you paid. Real established routes are valuable. If they do go up for sale, real routes will probably be from someone getting out of the vending business. Even if you do find one of these real routes, pay close attention. If this person is leaving the business, it may be because the route isn't very good. Even if the route is only a contributing factor, be sure to pepper them with questions.
Turn-key businesses are usually not a good idea for all the same reasons that established routes are a bad idea. Do yourself a real favor, and invest in your education of the vending machine business, as well as the business itself: Start small, get smart, then expand. A turn-key business tends to be built on sand.
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