Vending machines are coin-operated and automatic retailing machines that sell food items, beverages and small items. These self dispensing machines have successfully been embedded in today’s fast paced life. They are ideal for people who are always on the go.
In the Philippines, vending machines were first introduced in the 1960s with the rise of automats or cafeterias. It took 10 years for vending machines to multiply in number. The problem that vending machine owners faced back then was irregularly-shaped coins that did not fit into imported vending machines.
Through the years, Filipinos have taken a liking to vending machines because of their preference for quick, easy and affordable products like coffee, soda, chips, biscuits, chocolates, and even soup. Latest vending machines can dispense hot bulalo and chicken soup. In women’s bathrooms, there are vending machines that provide tissues and sanitary napkins. Some machines sell load or allow people to charge their cellphone battery.
Vending machines can be a good source of income. Here are other advantages of vending machine business.
- Putting up a vending machine does not require a large capital.
- All transactions are paid in full and in cash.
- It requires minimal effort because it operates on its own without the need for sales employees.
- It may potentially sell products 24 hours a day depending on capacity of the vending machine.
- A vending machine generally require minimal maintenance.
Here are some helpful tips and suggestions to help you put up your own vending machine business.
1. Search for reputable vending machine suppliers. Ask about terms and conditions, applicable warranty, inventory, and service and maintenance of the machine. Below are some vending machine companies in the Philippines.
- Philippine Vending Corporation
Address: 54 E. Rodriguez Jr. Avenue Bagong Ilog Pasig City 1600
Tel.: (02) 477-3333
- Inhyang Commerce Philippines Corporation
Address: Address:1608 tower A. Almanza Metropolis Condominium, Las Pinas City
Tel.: (046) 434-6370
- Tri East Philippines Incorporated
Address: Anson Building, Makati Avenue, Makati City
Tel.: (02) 816-7433
- Yong-Gook Phil Enterprises Inc.
Address: 66 AVE Maria St, Silangan 2
Tel. No: (046) 971-1037
2. Location is a big factor in the success of a vending machine business according to Ready To Be Rich. Start by creating a list of potential locations for your vending business and determine the most ideal place.
- The target area should have high foot traffic. It is recommend that you choose a location without nearby competing vending machines.
- It should be placed in good view of passersby without obstruction. If the vending machine is partially covered by a structure or large object, it will be difficult for customers to see it.
- The area should also be clean, secure and safe. A clean environment is vital especially if you have a food vending machine. Customers are likely to lose interest in grabbing a quick bite or drink if the surrounding area is dirty. The vending machine should be safe from vandals to protect your investment.
Some vending machine companies can assist you in searching for lead accounts.
3. Make an ocular visit to the areas that you listed. By personally going to the potential business locations, you can have an overview of the demographics and customer traffic. Take your time to observe the people in the area and determine if they fit your market profile.
4. Determine what type and size of vending machine to put in the chosen location. The products offered in the vending machine should benefit the market profile of the location. For instance, tissue paper and sanitary napkin vending machines should be placed inside female restrooms. It is advisable to place coffee and soda vending machines beside sari-sari stores, in front of pandesal store or bakery, parking lots, driver waiting areas, and in bus stations. Candy and toy vending machines are suitable in malls, fast food areas with play area, near schools, and other places where there are a lot of kids.
5. You can choose between new and used vending machines. Compare vending machine’s manufacturer, product capacity, price, etc.
If you prefer a used vending machine, make sure you test the machine if it is working properly. A vending machine may accept coins or paper money. Ensure that the machine accepts money and dispenses products without difficulty.
Keep in mind that used machines may require more maintenance and repair. It is important that you get a well functioning vending machine because you can lose money for each day that a machine is out of commission due to repair job.
As owner of the vending machine, it is recommended that you learn how to trouble shoot minor vending machine problems.
6. Create a presentation for the owner of the establishment in order to get the right to position your vending machine in the target area. Discuss details of the vending machine including size and products. It is recommended that you show photos of the vending machine. Talk about possible incentive such as fixed space lease amount, commission or percentage of proceeds. Exchange contact information for easy follow-up.
7. Determine applicable sales tax permit on vending machines.
8. Purchase products for your vending machine depending on type. Possible products include chocolates, candies, gum, biscuits, chips, soda, coffee, hot chocolate, energy drinks, small toys, etc. Look for wholesalers to avail of good prices.
You’ll also need cleaning supplies such as glass cleaner and towels to remove dirty spots and streaks on your vending machine.
9. Track vending machine sales. Sales can simply be accounted by collecting your vending machine money. Tracking sales is easier if done on a daily basis. If you own more than one vending machine, collect the cash from each one and place in separate containers or money bags. The money collected must be accounted for accurately in your system.
To calculate gross profit, subtract the cost of products sold from your sales to get your gross profit. Then deduct operating expenses including lease payments.
You can record sales in a ledger or input it on spreadsheets such as Excel. If you are running several vending machines, you can consider investing on special software designed for vending machine business. Examples of Vending Machine Software are Vend-Trak and MyVendTrak.
10. Regularly monitor your vending machine. Make sure that it is clean, visible, functioning well (no jams) and adequately stocked.
Photo c/o Pixabay. Public domain.
Rachel Yapchiongco, also known as Rach to her friends, is a Psychology and Marketing Management graduate of De La Salle University. Rachel is a full-time mom to a charming young boy and married to an entrepreneur who has a passion for cooking. She shares parenting experiences and slices of everyday life on her personal blog called Heart of Rachel.