Ambitious Vending Newbie w/ ?'s

[Supapac]

I am brand new to the vending world with plans on growing a lucrative vending business. I am located in Brooklyn, New York and have a very close friend that just signed the lease to his first tattoo shop. I want to present the idea of placing a vending machine at his brick and mortar location. He is very successful and has clientele booked until May 2021. He plans on bringing more artists at his shop as well. 

I would want to place a hybrid drink and snack machine at his business to start off - 1 machine purchased refurbished of course. I make decent money with my full time (80k/yr) but would be buying and funding the start up costs with my CC. I plan on stocking the machine myself but would most likely outsource any repairs I wouldn't feel comfortable doing myself. 

1. Im sure he wouldn't have a problem allowing me to place my machine there but how do I suggest we structure the agreement? Would 10-20% of Monthly profits be suffice?  

2. Which brand of machines should I look for refurbished? What would be an ideal price point for said machine?

3. ANY advice for a newbie? - Something you would have told yourself when you starting out? 

4. Now, when it comes time to scale. Should I consider these route/location services I see around while I've been doing research thus far?

Thank you 

 

Edited November 23, 2020 by Supapac

[NYCandyMaN]

where in Brooklyn? north or south?

you can call or text me anytime, I am also Brooklyn

9one7 73one 389one

[Southeast Treats]

1) Stay away from imported machines like Seaga - far far away.

2) Combos don't make a lot of money in general.  For a tattoo shop I would probably suggest a drink machine (Dixie Narco, Royal, or a newer Vendo) stocked with cans.  Cans have a long shelf life (other than diet drinks)  and you can get a good margin.

3) Snacks usually require that you have multiple machines so that you can maintain a good selection without excessive stales.  Having to throw away product you have paid for cuts deep into the profits.

4)  If you must pay a commission to a location, adjust your retail prices to cover the added cost.  For a small location like a tattoo shop I would not offer more than 5% of sales (so 5 cents on a $1 can for example).  Most small locations like that don't warrant servicing if you have to pay to be there.

5) Look for machines that are credit card capable, even if you are not ready to add cards right now.  Makes it easier to upgrade or sell later.

Good luck!

[Corvus Corax]

Start with a soda machine. Coke and Pepsi are practically giving them away. Everyone's warehouses are full. Make sure you can sell enough sodas, before you get a snack.  You can throw some $.50 bulk machines with Pm&m and Skittles in the meantime. If you are selling, pick up a decent MDB snack machine, shouldnt be more than $500. Stay away from combos, you always end up over paying for something that doesnt hold enough product.  You can be all in for under $1k plus product cost. It's like dipping you toe in before you drown yourself.

[Supapac]

On 11/23/2020 at 10:35 PM, Southeast Treats said:

1) Stay away from imported machines like Seaga - far far away.

2) Combos don't make a lot of money in general.  For a tattoo shop I would probably suggest a drink machine (Dixie Narco, Royal, or a newer Vendo) stocked with cans.  Cans have a long shelf life (other than diet drinks)  and you can get a good margin.

3) Snacks usually require that you have multiple machines so that you can maintain a good selection without excessive stales.  Having to throw away product you have paid for cuts deep into the profits.

4)  If you must pay a commission to a location, adjust your retail prices to cover the added cost.  For a small location like a tattoo shop I would not offer more than 5% of sales (so 5 cents on a $1 can for example).  Most small locations like that don't warrant servicing if you have to pay to be there.

5) Look for machines that are credit card capable, even if you are not ready to add cards right now.  Makes it easier to upgrade or sell later.

Good luck!

Thank you for all the information. Where do you shop for deals on cans? 12 oz. cans or 16 oz cans? 
 

I definitely think I’m going to pitch him on a soda machine. If you know - Where’s a  good resource to shop for cc capable used machines? 

[Supapac]

39 minutes ago, Corvus Corax said:

Start with a soda machine. Coke and Pepsi are practically giving them away. Everyone's warehouses are full. Make sure you can sell enough sodas, before you get a snack.  You can throw some $.50 bulk machines with Pm&m and Skittles in the meantime. If you are selling, pick up a decent MDB snack machine, shouldnt be more than $500. Stay away from combos, you always end up over paying for something that doesnt hold enough product.  You can be all in for under $1k plus product cost. It's like dipping you toe in before you drown yourself.

Thanks so much for replying. 
 

Whats MDB? When you say coke/Pepsi are giving them away? Do you literally mean Coca Cola/Pepsi brand or you mean resellers with branded machines?

[AngryChris]

2 hours ago, Supapac said:

Thanks so much for replying. 
 

Whats MDB? When you say coke/Pepsi are giving them away? Do you literally mean Coca Cola/Pepsi brand or you mean resellers with branded machines?

Everyone's region is different so his statement may not hold true in your region but he's referring to the bottlers (coke/pepsi).  For example, Pepsi has several companies under their conglomerate and one of them is the 3rd party side of things.  Their job is to sell you (the reseller) wholesale products like 20 oz and 12 oz products for the purpose of reselling it.  They might sell you cases of bottles for $24/case for example ($1/bottle) and you can sell it for whatever price you want such as $1.75.  They will LEASE you equipment for "free" but the catch is that they ONLY want you putting in their products and they only want you buying your products (that go in their machines) from them.  You can put coke products in coke machines or pepsi products in pepsi machines but no mixing usually.  However, if you own the machine, you are free to do whatever you want as there is no agreement.

As for MDB, it stands for Multi-Drop Bus.  It's a protocol similar to USB.  You don't really need to know the technical side of it but just know if a machine is "MDB" or "MDB-ready" it means you can connect MDB components to it in the same way that a computer with USB ports would allow you to connect USB components to it.  Pretty much all of the latest technology and machines for the past 15-20 years is all MDB.  You can easily get a used machine such as a National 157 for maybe $500 from the right source and it could last decades before it needs to go to the scrap yard.  That's a lot of money you could make from a decent looking machine that's new enough to handle card readers and the like.

[Southeast Treats]

17 hours ago, Supapac said:

On 11/23/2020 at 10:35 PM, Southeast Treats said:

 

Thank you for all the information. Where do you shop for deals on cans? 12 oz. cans or 16 oz cans? 
 

I definitely think I’m going to pitch him on a soda machine. If you know - Where’s a  good resource to shop for cc capable used machines? 

With only a few machines, you can get your cans almost anywhere, you are only limited by how much time you want to invest in buying product.  Retailers like walmart, walgreens, cvs, etc often sell below wholesale.  The catch is you have to go shopping and observe their purchase limits.   Sams club or costco are also good sources. 

12 oz cans for most drinks, but there are some things like 16 oz monster that would probably sell very well in that location at a higher price (I get 2.50 for monsters right now and will probably raise that price soon). 

If you want to find a good machine from a refurbisher I'm sure there are several in your area that NYCCandyMan can point you to; or you can shop online for one from a private seller.  Buying your first machine from a refurbisher would cost more but would get you up and running vs having to go thru the process of finding a suitable machine in the want ads and then deal with whatever problems it might have.   Budget $1,500 to 1,800 to buy something decent refurbished (may be a little higher in your area).   Here is an example of what you might find:  https://www.amequipmentsales.com/shop/dixie-narco-drink-machine-501e-full-sign/

If Coke or Pepsi is even willing to talk to you they would set up and install the machine and even take care of most repairs, but you have to order from them at their prices, meet their minimum order requirements (10 or 12 cases per month per machine usually, and 15 to 25 case minimum orders), and have somewhere to receive commercial deliveries from them when you order product.  Plus you are limited to products from that bottler's line up.  For a small vendor it's more hassle for less profit usually.  As you get bigger the equation changes, as delivery over constant shopping for product becomes valuable to you. 

 

 

[Supapac]

 

Update 11/30/2020:

I went ahead and pitched my friend on having the vending machine at his location and I am pleased to share that he has agreed. We haven’t discussed the structure of the agreement yet. 
 

He also shared with me that his clients frequently leave his home (where his studio is currently) to go to the store to purchase drinks and/or snacks. He suggested that the combination could possibly do well as people would knock out 2 birds with one stone while at his new studio. 
 

1. Now, my question is should I revisit a combo machine with snacks that have a longer shelf life such as candy bars, candies and chips? 

or should I stick to a soda machine and look into a small snack machine? Does smaller type snack machines exist? 

or stick to just a soda machine to start off? 

2. I think I’ll buy used for now. Stay away from leasing. I love the idea of $2.50 Monster drinks! 

[Southeast Treats]

I would stick with the drink machine and if you really must, add a 3 wide or 4 wide snack if your friend has enough room.  Space can be a problem but combo machines have so many issues.  If you must, look at American made fairly new combos like this AMS unit: http://www.amsvendors.com/multitasker/  .  This might be hard to find as a used unit, but it has a pretty good drink capacity (most imported combos are light on drinks) and it's a reputable company with good parts availability and tech support.   Again, with only one snack machine you are going to have a hard time preventing stales, so be sure to buy in the smallest quantities you can find and don't let your prices go too low.  You need to have 50% or better margin. 

You also need to get on your state sales tax website and get familiar with the requirements you will operate under.  Failure to comply may cross you up as well as your friend...

[Supapac]

Update 1/25/2020:

 

I found a pretty beat machine that I was going to get FOR FREE but the “seller” did some funny *hit so that deal fell through. The machine worked but needed some TLC. 

 

Now, Im actually in talks to acquire a used Royal RVCC660-9 machine. The guy only wants $300 and it’s only missing the lock and key. Wish me luck!
 

I will come back and update when I get the machine transported and on location. 

[orsd]

Yeah you should make sure that isn’t a stolen Coke asset.

[Supapac]

Thank you for the response. How do I go about that? 

[Southeast Treats]

If the machine has property numbers or serial numbers available, use that info and call your local coke distributor.  Speak to a customer rep, not the call center, and ask them to check the numbers to see if it's theirs. 

If it checks out, the lock is an easy replacement.  The cylinders are standard and meant to be interchangeable.  Go to a vending supplier website like http://www.thevendingcenter.com/

or

https://www.dsvendinginc.com/

and order a lock and keys from them.  You can get a common lock or spend extra money to get a high security lock with a key registered to you, such as a Medeco.  In the future you can order additional keyed alike locks for your registered key from the same supplier.

[Vendo Mike]

Good idea but since stolen equipment tends to migrate out of their original areas, I would suggest contacting Royal with the serial number/asset tag.  They should be able to tell you who originally purchased it.  Then contact that bottler ( which may or may not be local to you ) to see if that serial is still active in their system. They can tell you if it's in their system or been depreciated and sold or scrapped.  

If you haven't already, you might consider checking the machine after it's been running for a day or so.  Used equipment tends to have refrig issues like freezing up which won't be noticed if you power it up and simply check for cooling immediately.   It shouldn't be a deal breaker but good to know in advance.

[Supapac]

Thank you for all the advice. This forum is great!

So, I spoke with someone at Royal Vendors and they confirmed that I should be good since it is an older machine. The machine is over 15 years old, He confirmed those older machines are phased out of Coke’s line and the older serial numbers - they have no way to look them up anymore.  

Thank you for the links. Will look into some replacement parts where necessary. 

[kyle0050]

On 11/26/2020 at 3:53 PM, Corvus Corax said:

Start with a soda machine. Coke and Pepsi are practically giving them away. Everyone's warehouses are full. Make sure you can sell enough sodas, before you get a snack.  You can throw some $.50 bulk machines with Pm&m and Skittles in the meantime. If you are selling, pick up a decent MDB snack machine, shouldnt be more than $500. Stay away from combos, you always end up over paying for something that doesnt hold enough product.  You can be all in for under $1k plus product cost. It's like dipping you toe in before you drown yourself.

Wait this true? I live in ATL and need a new drink machine for a location. So if I contacted my local bottler would they sell me a used machine they have?

[orsd]

9 hours ago, kyle0050 said:

Wait this true? I live in ATL and need a new drink machine for a location. So if I contacted my local bottler would they sell me a used machine they have?

Most bottlers don’t sell machines anymore.

They get sent to be refurbed and then put back out or are scrapped if they are fubar.

[Supapac]

Update 2/09/2021:

I will be moving forward with the Royal Vendors RVCC-660-9 vending machine. I am currently in talks to get the machine transported to where it will live. We got creamed with a massive amount of snow here in NYC. This has slowed the process of getting the machine. 

When I get the machine I will come back and update. =] This is becoming real!

[Vendo Mike]

Congrats on your equipment.  I hope you did your due diligence having the serial number checked out.  You don't want to be in possession of stolen equipment.   I am glad you found a machine you're comfortable with and I sincerely hope this goes well for you.  It's a lot of work but anything worth doing normally is. 

 

When you're ready for an upgrade, keep Vendo in mind  

[Supapac]

8 hours ago, Vendo Mike said:

Congrats on your equipment.  I hope you did your due diligence having the serial number checked out.  You don't want to be in possession of stolen equipment.   I am glad you found a machine you're comfortable with and I sincerely hope this goes well for you.  It's a lot of work but anything worth doing normally is. 

 

When you're ready for an upgrade, keep Vendo in mind  

I did. I reached out directly to royal vendors. You probably missed that post. 
 

Thank you for the well wishes. 

[Supapac]

Update 2/19/2021:

So I went in a totally different direction. I was able to procure a RV 660-12 Coca Cola machine for a great price that was closer to me. I was able to get the machine transported to location as well. 

Can’t believe this is real and finally in motion. Since the machine was placed on its back while transporting. I am waiting the recommended 72 hours before plugging it in.

The local Walgreens is currently having a sale on 12 pk cans. Buy 2 get a third pack for free. One pack cost $6.50 each. So essentially for 36 cans it would cost roughly $15 or so. I will be going back to check the final price. 

 

Edited February 19, 2021 by Supapac

[Vendo Mike]

Happy for you.  Vending is a lot of work but can be very rewarding.  Be patient and smart about your moves.  Keep your customers happy and if you have any questions you can find most answers on this forum

 

[Supapac]

Update 2/24/2021:

so I have the royal 660-12 on site. I’m trying to set it to vend 16.9 Dasani water bottles. I set the rod (product stop) to the first hole for larger vends. I set the sales depth for Column 2 & 8 to 1. I adjusted the retainers to the recommended length

for the front (2) - they recommend putting the stop on the 10th notch

for the back (8)  - they recommend putting the stop on the 7th notch. 
 

when I go to test vend multiple bottles fall out. Not sure what I’m doing wrong. 🤨

[AZVendor]

Set the rod for small products.