The best thing is to learn from someone else’s mistakes...

Everyone launching a startup wants to avoid errors, screwups and other mess. The best thing is to learn from someone else’s mistakes. Analyzing the development of coffee machines vending in the world we singled out 9 main mistakes to pay attention to by novice businessmen. Of course, the items listed below are not to be regarded as absolute maxims but we hope they will help you to build up your own vending machine business.

1) Miscalculation of payback from machines. It is a typical mistake of most emergent businessmen and it’s all the fault of supplying companies who claim that the cost of machines will be covered in 6 months. This is the most optimistic payback calculation. It is possible to cover a cost of machines in 4 and even 3 months but if you just start vending machine business you are in prospect of learning, facing lots of problems to solve such as relocation of machines, idle time, searching for new location, consequently payback will be delayed. The right calculation of payback means taking into account the possible dead time of machines. The average target time of payback is 11-14 months. Make use of our payback calculator >>>

2) Selection of simple (noncompetitive) models. Your future machine should be not only reliable but also inviting. On competitive market of machines operating in your area your equipment should be distinguished for high quality and competitive ability even after long time operation, because a life cycle of machines is 10 – 25 years on condition of appropriate maintenance and replacement of worn-out parts.

3) Installation of defective (unreliable) paying systems (bill validators). If a machine deceives the buyer by not giving out goods, if the payment mechanism “chews up” money or takes a limited range of coins it will just alienate the buyer and arouse his or her aggression.

4) Purchase of machines on credit/leasing. Feeling inspired by vast prospects novice businessmen are often willing to take a lot of vending machines on credit or leasing making the most optimistic plans. But the credit takes a heavy part of receipts, machine net has low turnover on the first stage, consequently the business has low profitability.

5) Purchase of large quantity of vending machines at once. It goes without saying that the more machines you buy at a time the more discounts you have. But the considerable quantity of machines has to be set up effectively and quickly. The beginners overestimate their ability of simultaneous setup of equipment. Thereupon the machines mostly stand idle for a long time waiting for a proper moment and location.

6) Wrong location of machines. Keep in mind the three components of effective vending machine business – location, location, location. Among all other components (attractive machine, high-quality and reasonably priced merchandise) it is location of machines that determines income rate and payback time.

Wrong location means a place with seldom customers and high competition. There might not be other vending machines but a restaurant or cafй offering the same products at lower price.

The machine may be improperly located in effective sales outlet but, for instance, in uncomfortable for passers- by place.

7) Misestimation of paying capacity of population in the area (location), overpricing - consequently small sales. For instance, if consumers are ready to buy at 50 cents, but you sell at 75 cents, you lose your potential buyers.

Many experienced vending operators send out a questionnaire before vending machine location at enterprise to find out customers’ predilections and to offer the required product at a reasonable price.

8) Utilization of defective ingredients or fillers. For example coffee is a demanding drink. To make it you have to keep the following rules: high-quality ingredients selection, proper ingredients ratio, attention to water quality. Foreign experts point to the fact that the quality of coffee depends on water by 90 percent.

9) Not paying proper attention to vending machine service frequency, maintenance of ideal outward appearance. Cleanliness is a recipe for health - including the health of your vending machine business.