Starting a Route From Scratch

[Johnny Ringo]

I am brand new to vending. I am thinking about starting my own route from scratch. I plan on finding my own locations and then placing machines. I am trying to minimize all of my start up costs. What is your suggestion for outputting the smallest amount of money for machines. The ideas running through my head are:

1. Buy used machines all cash

2. Buy used machines and finance

3. Lease new machines

What do you think?

Thanks,

Johnny Ringo

 

 

[g_r_vending]

Full line can be very costly, but you get what you pay for, I would start with a used machine first, get it placed, then use the money you make to buy another, build slowly, not a good idea to go into debt to start a business, one thing you need to consider is can you or is there someone in your area that can fix the vending machine if something breaks, you need these contacts asap. Most good locations want the new machines and they are big money, but you dont have many problems and you have a warinty. start slow.

my 2 cents

[Johnny Ringo]

I definitely want to start slow. Does anyone have any info or experience with leasing equipment? Is that a good way to go in order to keep start up costs down and increase cash flow?

[Rustinm]

I personally am doing bulk machines so this may not help depending on what your goals are. Bulk machines are cheap if you can find the deals, i just bought 65 vendstars for 1500$. If you wanted very low startup you could start with bulk and get that route making money and then move onto bigger machines. I say this because of how much easyer it is to handle bulk machines. They are light weight, everything on them can be fixed at home for no more than 30$ and only require a sqrewdiver and a childs understanding of how to fix things. I would then use the money generated from those to buy bigger machines but take your time and only buy them at a fraction of what they are worth. I have found amazing deals on craigslist that will save you thousands if you plan on having a big business. Ive never done it but the problem i see with leasing machines is that its like leasing a car, you are paying for something that you will never own. I have seen pop machine in good shape for as little as 200$ and snack machines even cheaper. My overall advice would be to start small, see if you really like vending. And start slow, bulk is cheap, quick and easy to deal with, not to mention that with 30 good locations you can make 500$ per month, minus expenses, which by the way is a lot less than full line machines. Work your way up slowly and wait for great deals because they come around all the time,(Just ask Nam).

[alyssamma]

Johnny, leasing is a good way to get started with little cash up front. Rustinm also had a good idea about bulk instead of full line. You can find several good posts about bulk vs. full line as well as leasing in this forum (Full Line Vending Discussions).

That being said, how much money are you looking at investing?

Kevin

[sbishop]

You need to answer this question

Are you prepared to make a lease payment for the next 2-4 yrs? even if you hate vending and want out after 6 months? How long will it take you to locate the machines? can you make the payment if no income?

I suggest you buy an used soda machine you can find them cheap on ebay. You can even buy a refirub w/ a waranty. Find a location, service it. If everything goes ok buy another machine.

Once you have gotten your feet wet and you like the business. then you can look at leasing some machines for quick expansion.

Test the water first

[Johnny Ringo]

I only have a few thousand dollars of cash available. I do have more fund available via credit cards.

I'm thinking that leasing might only be a good idea if I know I have a high profit location and that having a nice, new machine would be a benefit. Otherwise, I am now thinking that I will find locations and then buy used machines on credit and then, hopefully, use some of my monthly income from the locations to pay off the balances. This way I would be able to get started will little money out of pocket and be able to grow more quickly. As the balances get paid off, then I will realize more income.

Sound realistic or am I dreaming?

[sbishop]

You do have it right get, the location first and then find a machine to match their needs.

I would prefer paying with cash and save the credit for an emergency. Why pay intrest if you do not have to?  It cuts into your profits.

Just make sure that this is what you want to do before you get into a lease or loan payment

[Johnny Ringo]

sbishop,

You know what? I forgot about that - deciding if I actually want to do this. I have spoken to a number of experienced vendors in my area. I should call one and see if I can go on a ride along to get the feel of it. Do you think they would let me do that?

Johnny Ringo

[Zeke]

Johnny.  Leasing is a very viable option, only if your going to be in it for the long haul.  The lease payments will eat up all your cash in the begining.  Also you want  to make sure that the location is making money before you invest too much money for new equipment.  I have 2 locations that I put brand new equipment in that only pull 350 a month gross each.  So are they going to generate enough to pay my lease payment? Nope.  So you have to be careful.  I have been through hell and back with vending.  Some of my leases are now over with others coming soon.  So yes that does ease cash tensions, but there are so many variables that will each your cash flow.  I would suggest buying used with cash to start.  If its something that you will enjoy then add slowly.  Make sure that you have a game plan.

 

Zeke

[Johnny Ringo]

Zeke,

Good points. I will stay away from the leases to start. I am going to start by buying used machines. I will buy them on credit, though, to conserve my cash.

Johnny Ringo

[alyssamma]

Johnny, sorry, when you said "lease", I thought you meant getting the machines from Coke/Pepsi. They will give you machines free of charge...you just need to buy product from them.

There are pros and cons to this, and several posts here that elaborate on them.

You should really read some of the posts about full line vs. bulk. There are at least 2 good threads here. Educate yourself as much as possible before doing anything. Going around w/someone is good, but still read the posts here as I think you'll get some good insight.

Kevin

[Rustinm]

Hey look at it this way, If you can be patient and find the great deals on machines, i dont mean ok deals, i mean great deals, then even if you get into vending and dont like it you can sell the machines for more than what you paid for them. I bought a glass front drink machine, everything worked, it just needed the lock drilled and replaced. It was 40 selections i think. I paid 125$ for it and because i needed the money, the very next day i was able to sell it for 600$! Also, i bought a 19 selection snack machine for 125$ and sold it for 350$! And last but not least, i bought a big coke machine for 250$ and sold it for 500$. See what i mean? If you get good enough deals you can profit either way! You just have to be patient and look for the deals! And i can tell you from personal expereince, if you do it right a few thousand dollars is more than enough to start your business and not be in any kind of credit debt. Just start slow, the pace of your expansion will grow once you start having the cash flow. Just use the profit from your 1st machine to grow the business so there is no out of pocket expense after you start.

[Johnny Ringo]

Rustinm,

There's one guy that I am thinking about buying my machines from. Buying two used machines from him (one soda, one snack) will be about $1800. I'm going to go look at another place tomorrow.

I have seen some great bargains here and there. I think I will shop a bit more and try to get the best value I can find.

Thanks,

Johnny Ringo

[Johnny Ringo]

BTW, how do you guys normally move your machines? Rent a U-Haul or truck with lift gate, find a buddy with a pick-up truck?

[chris in md]

Rustinm,

There's one guy that I am thinking about buying my machines from. Buying two used machines from him (one soda, one snack) will be about $1800. I'm going to go look at another place tomorrow.

I have seen some great bargains here and there. I think I will shop a bit more and try to get the best value I can find.

Thanks,

Johnny Ringo

BTW, how do you guys normally move your machines? Rent a U-Haul or truck with lift gate, find a buddy with a pick-up truck?

i'm still in the research phase, so take this for what it may or may not be worth, but i think you can do better than $1800 for a soda & snack machine, unless those are machines that are only 2 years old or something.  in the month or so i've been actively looking, seems like about $1000 for a pair is a good deal (and i'm talking about machines that are only about 5 years old, dixie-narco or vendo soda machine and a rowe or AP snack machine).  keep scouring craigslist in your area, and consider that you might need to travel a few hundred miles to get the right deal.

as to your second post about moving the machines, this is what led me to look more closely and redirect my focus to bulk machines.  if you don't have a truck already, it can really be a pain having to line one up every time you need to move these things, plus you're gonna have to enlist a few buddies each time, too.  not a huge deal initially, but it'll start to get old with your friends the more you call on them for help.  i collect old arcade machines, and they "only" weigh 250-400 pounds, depending on the cabinet.  i can move them around in my basement myself, but it takes two healthy people and a dolly to move them out of someone's house.  full-size soda machines are often 650+ pounds, so you're probably looking at 3 people to "comfortably" move one, plus a good appliance dolly.  a lift gate would be incredibly helpful.  my opinion, those logistics are just more of a pain when you're trying to start out, which is why i'm planning to start with bulk machines.  i can move those myself, in my own vehicle, and the start-up price is lightyears cheaper if you shop used.

best of luck.

- chris

 

[ANDERSONVENDING]

I just paid a moving company $167 to deliver a snack and soda machine for me and I loaned them my hand truck for vending machines.even though I have a hand truck I prefer to pay them to move it.Let them deal with the bull work.

John

[Johnny Ringo]

Yeah, if I buy machines from a used machine dealer then I think I will just pay them to place the machines.

If I find used machines for sale from individuals then I might rent a truck and get a couple of buddies to help me out.

I know the saying goes "Locations first, Machines Second" but I feel like I might purchase some machines if I see a great deal even if I don't have a location yet. I would have to store them in my garage.