Getting started in vending machines

The ads make it sound so easy: For a set price, a vending company will set you up with its special candy machines, name-brand products to put in them and your own protected territory. All you have to do is send them the $5,000 or more to get started, and presto — you’re in business.

While there are undoubtedly some people for whom the above scenario is true, for the vast majority the result is less than satisfactory. There have been innumerable lawsuits against vending companies for fraudulent claims about promised profits, inability to find locations, low-quality machines and phony references. Victims with losses of tens of thousands of dollars aren’t unusual.

I have a friend who made $75,000 last year in vending. But he didn’t start by signing up with a vending company. He built the business himself from the ground floor.

If you want to experiment with the vending business, learn all you can before spending significant money.

Look on the back of vending machines in your area for the name and telephone number of the owner. Call and ask about the ease of maintaining the machine, the percentage of profit, and any difficulty in finding locations. Some vending machine operators will be quite forthcoming with information — and possible warnings.

•Scout locations. You want a high-traffic area, ideally one where people stay in one place for a period of time, such as a bowling alley, airport or workplace break room.

When you find a suitable location, get permission in writing from those in charge to place the machine.

•Start small. Go to one of the warehouse superstores and pick up a three-head candy machine, as well as bags of candy and gumballs.

Your locations will tell you when it’s time to expand. If you have a profitable candy machine at a business, and they ask if you can also provide a drink or snack machine, you could be on your way to expanding your business. At the same time, if a location doesn’t make a profit, move the machine.

In summary: It is possible to make a profit in vending machines, but don’t go into debt to get started. Build the business yourself, one machine at a time.