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RichVending

New to Vending in Detroit, Mi

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Posted (edited)

Hello! My name is Tiana and I am new to vending. I have been interested in creating a vending business for years and started my research 6months ago. I started with taking the Vending mastery course. I secured a location in January but now I am at a stand still with the purchasing of my machine. I decided to go through Federal Machine. I like the sales rep I have but sometimes things don’t seem like it’s a legit business. It could be just me being paranoid but it’s hard to reach him at times and he seems to be the only person working there lol. I’m looking for advice on buying machines that come equipped with all the perks at a reasonable price. Refurbished is what I’m leaning towards seeing that this is my first venture and I am a college student. Any advice would help. Thanks in advance! 

Edited by RichVending

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Federal is a distribution arm of USI and he is an independent affiliate. He's probably not a full distributor or you would find other people working there.  It's common to find one man affiliates trying to make a living with low overhead.  The drawback is you might not get the best pricing and you probably won't get good warranty service or tech support from him though he will present himself as knowledgable.  You'll have to go to Vendnet, the USI parts arm, for parts and tech support.  Make sure that he discloses whether the machines you buy are new or refurbed.   They reposses lots of machines from people who finance and then can't make the payments and they then resell them as refurbished.  You may find he doesn't even install the machines for you depending on what he knows about the vending business.  Be forewarned if he offers you existing locations with machines in place.  That is a common ploy to get machines sold but the locations are often over-equipped and sales will be lower than claimed.  He is in business only to sell machines and those affiliates work all kinds of angles to sell them.  

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Thank you for the insight! So do you suggest to just go through USI? I just want to make sure I’m getting my money’s worth and not doing bad business. 

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Federal machines are just USI machines with different model numbers and different logos.  If you're looking for new machines then compare the USI direct prices to his Federal prices to see how competitive he is.  I don't recommend new machines to new vendors because you probably won't be getting good enough locations to support new machines, let alone used machines, because you have no experience yet.  If you buy new then you will likely have to finance them and that will be at credit card interest.  They also use the Rule of 78s on their interest so there won't be any advantage to paying the note early.  If you don't have the funds to invest then you need to do this one machine at a time and used lets you easily do that.  Do can soda to begin with until you have several machines out and you have a better idea of what it takes to run a vending business.  It's a lot of work and don't let anyone tell you it isn't.  

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