Acutally $75.00 is on the low side, you really are looking to get $100 a machine, but if you can get an average of $75.00 across the board, then your not spinning your wheels.

75.00 a week?

Someone is selling 5 snack & pop combo units that seem to be in good shape. Are these machines less or more profitable than having two machines in one location? Would I want to put these in locations where there are fewer customers and therefore don't warrant two individual machines?

Thanks,

Michael

Your location will warrant what types of or how many machines you need and how much they will make. For instance, I have several combo machines, and they are in places that don't have room for 2 machines, like a salon or car repair shop. You will find that at other locations, combo machines will be too small for the volume of traffic or you won't be able to put in enough of a selection to keep people buying.

All, thanks for taking the time and responding. I accept the risk and know that every business has them. I am very dedicated in whatever I do and work hard at it. The idea of working with a vending company is a good one. However where I am frustrated is not deciding if I want to do this or not but who to trust and what is the best way to get into the business. Perhaps I am reading too many blogs, articles, etc and talking to many people. Everyone seems to have their own idea that they are the best whether it’s the best locator, the best equipment, the best company, the best programs, the best used equipment, guarantee, warrantees, etc… I am trying to not fall victim to a scam.

Where I was a week ago was finding a company that sold new equipment and had a locator service all at a reasonable price. I had decided I did not want to buy used equipment and take over some else’s headaches. I also decided it was too difficult and too time consuming to find locations let alone the right locations. But after reading many comment on Vending chat.com I’m not sure anymore.

I haven't been in this business very long, but have been in many different ventures in my life and have found that sometimes you just have to do what your gut tells you. When I first got into real estate, everyone cautioned and most were doomsayers, but I educated myself, did some research and made a decision based on what I felt was right and struck a jackpot several times. Even after I made my money, people would still try and put a negative spin on the situation. The truth is people are jealous and don't like to see others making money the easy way. Vending was no different. I purchased an existing route and when others got word of it, it was just like the things you were mentioning, "don't buy used" "sounds like a scam" "its too hard". The truth is, its really easy. I buy sodas for twenty cents and sell them for 75. Its like I own a bunch of little convenient stores that I don't have to operate. In fact I am making money as I write this blog. To me, the machines don't matter as long as the location is happy with them. I haven't had any problems yet, but what's the worse that can really happen? I'm not a tech guy, but I can call one, right? Yes, its possible you could lose money, but I'm sure you have before. You could also make a lot of money, the easy way. Which is more likely? It's like the lottery, you can't win if you don't play.
As far as the locators go, I would do my own. You won't always find the primo location, mainly because most are already taken, but I think its a lot easier than what you are making it out to be. We are providing a service, and most employees want to satisfy their workers. Besides, the worse they can say is "no". Ultimately, you will find if you provide a great service, that people will call you-this has already happened twice to me. GOOD LUCK!

Hey Thanks guys,

Your advice was very helpful. Does anyone know by how much the machines depreciate every year? In other words, what is the valuation method of a used machine?

Just to add to what others were saying. I just purchased two additional routes that have been great. I do alot of different investments and always look at cash flow and almost always never spend my own cash. I borrow. So from an investment standpoint, if you borrow money, say 20k and it cost you $300 a month and your route would yield $1000 a month. To me its a good investment. A couple of years ago, I was buying houses and fixing them up and my cash flow on a rental house was less than $500 per month so I figure the route was less money and less risk. I do think that $75 a week might be a little high for an average location or this may just depend on geography. My best location is at a rest home which brings in $250 a week, but its divided among 3 machines. So to me $50 per machine per week is probably more customary. I guess it also depends on pricing and profit margins.

To answer your other question, depreciation will depend on your CPA and how you do your books. How long do you plan to stick with the business? If its for the long term, then you don't want to claim high depreciation expenses too early or you may be stuck in the future. The life of your machine could also have many different variables, is it mechanical? Outside? Used? On the flip side, there isn't much that could go wrong with them, that can't be easily replaced by a tech or yourself.

How do you guys feel about outdoor snack locations? I have an opportunity for a pretty good location, but the big drawback is it's outdoors. It is in a spot which would be most frequented during the spring to fall months. It would be facing west and get the brunt of the late day sun.

I know I can't put a regular snack machine there, not only for the heat purposes, but for the weathering purposes, but I can pick up an all-weather unit. With a chiller can it keep up with 90+ degree heat and full sunshine in the afternoon? I have talked to a friend in the business and he says pass on it. That is my gut feeling too. Expensive machine to start with, can it cool the product well enough, if it breaks down, not only have you lost most product, but expensive to repair, open to vandalism,... These are the things running through my head.

I have a couple of outdoor machines and haven't had any problems. Mine are at an outdoor market where the gate is closed around 9 pm so I not really fearful of vandals. The worst thing I have had happen is some kid jammed a piece of wood in my validator, but it was easily fixed. These machines have awnings over them so they aren't in direct sunlight and I haven't had any shrink so far this year. Really in my part of the country, we only get brutal heat 3 months out of the year, so usually I slim down what I put in there. Obviously chocolate won't work, but chips hold up well. It's not my best location, but it's a definite money maker.