Start Up Costs

[PabloV8]

Dear reader,

Welcome to vending. This post goes some way to outline the often asked question about starting up in this business.

So please feel free to read the following posts as it would otherwise become a long read post.

Cheers

[PabloV8]

Of course, I am sure that the majority will have seen the 'pie in the sky' figures banded about by the two majors on respective websites

Of course you will make money but perhaps not as much as the dizzy figures you will see on the internet. I have been doing this now for over a year and have a reasonable round so pass on information as I know it Jim!

Of course, there are others who have been doing it longer and have bigger rounds - but my post is about the recurring question about start up costs and because of that the prices and figures I quote can be +/-

[PabloV8]

How long is a piece of string?

To make reasonable money in this business you are going to realistically require 100/200/300 machines. The amount is always going to be according to how much time you have, part time or full time, and of course money for start up.

Whether you purchase new machines or second hand machines.

And of course your location and how much competition you have, as I often see quoted over saturation!

New machines:

These are going to cost about £180 - this is for the machine, stand and includes vat and of course are Clenports

I always when I can use new machines as presentation is king as far as a customer is concerned!

Old machines:
These can be had at 50% or less of the above figures! but do you know what you are buying, are they clean and fit for purpose? Are they reliable?

I am sure that very good machines can be purchased from ebay or from members!

[PabloV8]

Siting.

This is the real Achilles heel of vending, as the site depicts how successful you are going to be.

Do not under estimate how difficult it is to site find, I am sure the ratio of finding a site whether by yourself or professional is about 1/20.

But factor in the cost of £20+

The vast majority of use have an understanding whereas we do not site a tower alongside another vending tower - we work on the principle of first in wins etc.

Many do not of course adhere to this so be warned.

If a site finder insists you simply refuse and get them to get you another site.

There is plenty of business, it is just a case of finding it. If you feel that it is hard going, pop on here for some advise.

[PabloV8]

Sales.

Stretching the truth.

We would all love to be hitting the 'jackpot' figures banded by the majors!

That is not going to happen!

Sure I have some sites that turn over 30+ sales a week!

But the reality is I work on the 25 sales a MONTH rule all year and it seems to be correct, winter and summer combine an average of 25. Of course some operators are going to have better than this, as it is down to location and type of business that you have put your tower into.

As they say, Location, Location, Location!

But some parts of the country are not as blessed as others, so if you are in a high population area, fill your boots!

I am happy with the 25 per month (actually do better than that), but it is my ball park figure.

I need a ball park figure to see which sites may require a new site due to poor sales.

Competition from other venders and those darn charity boxes can be a problem - but who dares wins!

[PabloV8]

Products:

You have a choice:

tubz vending
Hurleys
Or self pack.

No legislation is now coming in to play that favours purchasing from the suppliers.

Profits:
At this point in time I work along the cost of 50p per tub - Dustyboy who has 300 machines also agrees, anyhow depending on what you stock you could take pence from that figure.

What to stock - never overlook the top brands Rolo, Smarties, Pastilles, Maoam, Toblerone as they all sell well, and of course add cheaper branded products to boost your profitability.

£1 - 50p leaves us with 50p to play with!

Out of this you have options:
1. 10p to charity
2. 10p to customer
3. 20p to customer
4. 10p to charity and 10p to customer

At worst you are left with 30p (give or take, depends on what is stocked)
Out of this you have the cost of the transport, machine, stand, insurance etc and of course your time.

Does not sound much however, if you are working on the basis of 25 tubs a month each visit should generate £7.50 at least profit x that by a reasonable round of 100 and it becomes £750 profit, of course these figures are examples and only a guideline as I am sure most will be hitting the £1000+ figure and depending on location could even be double. I am looking at worst case scenario.

You will make money, how much depends on the individual.

[PabloV8]

My costs for example:

I have a sizeable round, so this needs:

1 x small van
Insurance for van
Liability insurance
Tax for van
Fuel for van

Cost of many towers
Cost of many stands

If you have 100 towers that means you have approximately 100 x 81 x 50p = £8100 worth of stock out with and you need a reasonable stock in house to be able to service this otherwise you will be always chasing yourself to service your customers who do not like to be messed about or unreliable people.

100 x towers and stands = £180 x 100 all in = £18000 if you have good negotiating skills you might get them cheaper (based on new)
Stock approx £8100 - we need to fill them
Holding stock - £2900 (this will include free delivery

To operate 100 machines with ease we are suggesting £11000

Some people will now put me right and suggest a load of nonsense, but I did say I was basing this on my own operation and trying to give people a feel for what they should be aiming at to make a living. Sure we all start with ten and build up, therefore, start up is a tenth, £1100

In the ideal world, you will have another income so hat the whole process allows you to build up your business to say 100 - this is a numbers game, the more you have the more you make and the costs decrease per tower.

Do not shoot the messenger, after all I am trying to answer the often asked repeatedly question involving start up.

Many posts added to this should give every potential start up the answers all within one post to save the hunting through this forum for the answers they seek.

Enjoy!

[PabloV8]

No legislation is now coming in to play that favours purchasing from the suppliers.

Should read

New legislation is now coming in to play that favours purchasing from the suppliers.

[PabloV8]

So I am suggesting that perhaps operating 100 machines will have cost in the region

£18000 + stock £11000 = £29000

Gosh that is bringing water to my eyes!

You can purchase cheaper, or buy other people out.

I say just go for it - you get out of it what you put in to it!

Why do I do it, well I enjoy having my own business after having working in many other industries, and enjoy working when it suits me. So ignore the figures and just do it!

You will make money!

[Coin Operated Group]

Great post, trying to work out how to make it a sticky so it stays at top.