You Have To Start Somewhere

Posted On: 9/26/2016

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TAGS: Vending Times editorial, vending industry, vending editorial, retail automation, vending operator, vending industry history, coin machine, coffee service, food service, Tim Sanford, business-opportunities show, vending biz-op

Over the decades, we've watched the number of vending operations in the United States expand, contract, expand again and contract again. All sorts of things affect the number of identifiable operating companies. That number would drop 50% if half of all the operations merged with the other half, but the number of customers enjoying vending service would remain virtually unchanged. And more machines are needed to serve a large workforce with short, structured break periods during which long lines can form at machines than the same number of people with unrestricted access to refreshments.

It is well to keep this in mind when evaluating the prospects for starting a vending business. The ease of doing that has varied over the years, affected by the complexity and cost of the equipment, and by a less readily quantified climate of opinion. We received a phone call, four decades or so back, from a woman who identified herself as a schoolteacher who really wanted to try her hand at vending. She had a good idea of what she wanted to do; but, she said, "No one will sell me a vending machine!"

In those days, regional distributors pretty much had a lock on the sale of commercial vending equipment. They were careful not to outrage their operator customers by selling a machine to a location, which then would try "self-operation." Whether it succeeded or failed, the operator lost out -- and blamed the distributor.

Those days are gone. Good-working equipment is available from a variety of sources, and if a location wants a vending machine, it can find one online.

Many of the pioneer full-line operators with whom we spoke half a century ago told similar stories of their entry into vending. Two narratives stand out in our memory. One involved a young college graduate with a few hundred dollars in the bank, an old car and the need to make living. He or she purchases a used vender (in those days, typically a cigarette machine) and a few cases of product, then goes out to find a location and learn how to serve it.

The other involved someone who attended a business-opportunities show, bought into a program that provided a few vending machines, a handful of glossy flyers for use in making a sales pitch to a prospective location and an overview of selling and operating a vending service, often painted in unrealistically rosy colors. What happened next often is recalled as, "So there I was with 10 hot-canned food machines. I went out and placed them, and my clients liked the service. I soon discovered that the machines were overpriced, sales were less than I'd expected and I couldn't make a living with them. But I really liked the business! So I did my homework, bought different kinds of machines for different locations, joined a trade association and talked to other operators. I recognized that I had paid for my education."

These narratives then converge. Recommendations from existing clients made it easier to get new ones, and requests for other kinds of machine expanded the scope of the business. After intense planning, it became possible to finance a truck, hire a driver and survive the period during which higher operating costs were not yet offset by gradually increasing revenues.

Today's market is different from yesterday's (and that of the day before), but there surely is no less demand for convenient away-from-home access to desired products. Locations generally are smaller and fewer of them fit into traditional industry categories, but a careful, imaginative study of just about any market will discover niches in which modern vending machines generate revenue by meeting a previously unidentified demand.

The first step in finding an answer is to recognize that vending is, as it always has been, a people business that requires hard work. It's necessary to persuade location management that a machine will prove valuable, and then to keep that machine's customers happy. The next step is to become familiar with the equipment available from reputable manufacturers (and remanufacturers), in order to recognize the types that can meet the perceived need. A very desirable third step is to speak with established operators, perhaps from market areas sufficiently distant to alleviate concern about competition.

The easiest way to meet the last two requirements is to attend an industry trade show and join the association that conducts it. We've been pleased by the number of newcomers at the National Automatic Merchandising Association's OneShow, held annually in the spring, and the Atlantic Coast Exposition in the fall. (The next OneShow will be held in Las Vegas from April 19 through 21; this year's ACE is scheduled for Oct.13 through 15 in Myrtle Beach, SC.)

The classic full-line industry's performance was tied to the manufacturing sector of the U.S. economy. Today's is more diffuse, and it offers a wide range of opportunities, many not yet recognized. As we write, there are people pursuing them and, in the process, creating their own narratives. We hope to live long enough to hear their stories about their successes in this golden age of robotic retailing.