1. How do I get a location?
2. The location wants me to pay for the electricity?
3. Should I Buy a location first (or a machine)?
4. When I Buy a Location, What should I Get?
5. What should a bill of sale include?
How do I get a location?
Start by asking your friends and neighbors about where they work and if they need a vending machine. Cold emailing is cool and honestly driving around locally and going into some places are good as well. You will need to come up with reasons why your service is better than other people who offer the same services. You can find a vending warehouse that sells used vending machines and/or has vendors with pre existing routes that can sell you a location. So many ways of landing a location it’s more so whether or not it’s profitable. I was super excited when I started out also and learning new things and providing amazing customer service was the root of success. Stay positive, stay on track and never forget the goal! Goodluck ! Is she in any organizations, dance , gymnastics, clubs? Could they use vending? Does she get her hair, nails, eyebrows done? My daughter placed a machine at the location where we get our eyebrows done. The building has other businesses in it and a youth group. She stocks it after her brow appointment. If a ton of rejection happens it’s perfectly normal.
There are placement services, but there are many more scams than legitimate ones and you run the risk of losing your investment.
Locations are key to a successful business: Your vending machine business will depend specifically on the locations you choose. When selecting a location, Look for high-traffic areas with a consistent flow of potential customers, such as shopping malls, airports, or college campuses. Locations that have a high transitory population such as a gym or office park are also generally good locations.
AVOID locations which want a coffee vending machine. These machines (and location) tend to have high learning curves, are messy machines which require frequent visits to keep clean and service. Only consider them for high traffic, easy access, and general populations. These machines will never compete with a Dunkin Donuts or Starbucks nearby. Only consider these types of locations after you have significant vending experience and are ready to take on a challenging location.
When you obtain a location: Avoid locations on upper levels that DO NOT have elevators and wide doors to get in, unless the equipment you are installing can be carried by one person or you have an actionable plan to deliver and remove equipment. Have a contract ready to use, and get signed (by your location tenant) a Services Agreement that sets up the expectations that the customer can expect from you and what you expect from them. The more people at a location, the greater variety of products that you can afford to offer to appeal to a greater variety of people. Pick a minimum location size (number of people, closed or open to the public, etc.) and STICK to it. You’re not making your work-life easier or growing your business by taking on a small location. The exception to this is with your first location… it is usually better to get almost any location you can… this will give you experience, a talking point to future expansion and knowledge into the logistics of vending business… and you can always move and close out the machine to a new location when you get an upgraded one.
The location wants me to pay for the electricity?
Generally, it is important to let the location owner know that utilities for a vending machine will be minimal. If you are placing a drink machine the cost for the electricity is about the same as a refrigerator. It costs about $10 a month. If you are placing a snack machine, the utility costs are less than $5 a month.
You should stress that you are placing the machine at the current location as a benefit to the people at the location. You are shouldering the costs to place it there (machine costs, insurance costs, overhead costs, etc…) and that the location gets the benefit of having a snack or drink resource close by and only has to purchase products they want from the machine. Additionally, it is unlikely that the business will even notice the extra electrical usage.
If the location is worried about these costs and continues to ask for reimbursement, it is likely that the location may not be a good candidate as experience has shown this will not be the only micro issue you are going to face and complaints will be frequent for your machine and services (no matter how impeccable the services and product are).
If they still want reimbursement and you really want to go forward with this location, you can handle it in two ways: First, You can offer to put a meter on the machine and you will calculate the electricity usage for the first month and then determine the reimbursement you will pay based on the unit cost the location pays for electricity. The second is to pay a percentage of the net sales.
Should I Buy a location first (or a machine)?
It really depends on your situation. Some machines can't fit in certain locations because they may be too big, or they may be inappropriate for the area e.g. too small to service the location. Generally it is better to purchase once you have a location for them. In addition to being able to determine the correct sized machine for the location it also cuts down on storage fees. Other people look for deals on machines and purchase them hoping to find a location that will work for them; this strategy works best when you have a storage location to store the machine pending a location. If you purchase a used machine, you will want time to prep the machine prior to placement. This will give you the chance to go through it and completely test it with the product and learn about any quirks. This will ensure all buttons work and it is fully functional prior to placement at the location. It's also important to remember that it can take 4 to 8 weeks or longer to procure a machine which sometimes kills the deals.
When I Buy a Location, What should I Get?
When you purchase a location, you should expect at least the following:
- Full Set of Keys to all the Machines in the Sale. Note: Unless it was disclosed during the sale that some keys were missing and this was negotiated into the price of the sale - If you are not aware that there are no keys, do not agree to the sale - at best it is financially expensive to replace the locks, at worst this is a significant red flag that you are being scammed!
- A written Bill of Sale listing each machine and provides specific identification of all the machines in the sale, the identification should include the model number and serial numbers of all the machines, as well as the location you have purchased.
- If there is a card reader as part of the sale (not recommended), you will need to have the owner of the card reader start the transfer process and the agreement to this transfer should be written and part of the Bill of Sale. With the specific transfer details.
- You should get an introduction to the location manager who will be your contact and the location manager should be aware of the changeover. Note: You should be prepared to provide the Location Manager a sheet of paper with contact details for your business should there be a problem and specific ways to contact you (phone, email, etc) during this introduction. Additionally, you should be provided passwords or methods to enter the building should any locked door or access method be needed.
- If a machine(s) have passwords or passcodes to get into the machine, this should be outlined in the Bill of Sale as well as any other necessary keyword details to technology at the location which is part of the sale and supports the machines such as WIFI, cellular, video cameras, routers, etc.
- You should get a copy of the contract for the location (if any) so you can be aware of the terms of the contract and length. You should also be aware if the contract will continue to be in force or if you will need to reestablish a contract.
- If the purchase is over $10,000 you should have a contract. In this contract should be a provision for minimum length of time the location will remain intact (location owner does not kick you out of the location.) This contract will be between you and the person selling the location//machine (not the location owner). What is generally proposed is a 30-60 day guarantee if protecting you if the location owner decided to stop hosting the location and the machine must be removed. Get in writing that you can get a refund from the person selling you the location; if the owner of the location decides to stop hosting the vending machine. (Why $10k? Because generally, anything less than $10k and it will never make sense to pursue the contract in court so it really will not matter. It will cost you more in time and money to pursue than you will recover.)
What should a bill of sale include?
Bill of Sale for a location with machines should outline...
1. They own the machines outright with no leans
2. The machines are in good working order... or specifically what is wrong
3. The serial numbers of all the machines
4. They are authorized to sell the machines
5. Any specific additions such as card readers
6. Where the machines are physically located and how possession will take place (logistically)... ie are you moving them .. keeping them in place such as things over the location, etc...
7. When you will get possession of the keys
8. What happens to any left product in the machine ( do you owe additional money for the product or is it going to be part of the sale)
9. When does the money inside the machine become your property (will it be emptied prior to the machine transferring hands)... when specifically is the last time the current owner can empty it?
10. If a card reader is part of the sale what are the logistics to transferring ownership of the reader to the new person/company
11. If the location is part of the sale there should be a stipulation that the current owner is not under any requirement or has not received any notification that the current location Wishes the machines to be removed... (you don't want to buy a location only to find out that the location owner wants you out).
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