Vending Machines Can Provide Income, Benefits for Small Businesses
Variety of options exist for how to provide food, drinks to employees

By Charles Hanna

Many businesses provide vending machines for their employees and customers. But selecting a vending program usually generates quite a few questions: Can we rent? Do we have to buy the machines? Will the service cost us anything? Where do we get products?  And on and on.

The following are some of the basic vending options available.

Full Service:  This vending program allows the vending company to offer all the vending equipment, products and total service at no cost to the location.  In some cases, prices are adjustable to accommodate the location with a monthly commission based on sales.  The vending company absorbs all the cost of equipment, insurance, taxes, payroll, spoilage, refunds, rotation of equipment as needed and much more. However, the vending company is allowed to keep all the profits. In some cases, the vendor may offer a commission to the location if the vendor is allowed to vend the products at a slightly higher price.

Co-Op Service:  This vending program allows the location to have the use of vending machines at little or no charge. The vending equipment is usually loaned to the location. However, in exchange, the location must purchase all products and services from the vender and at significantly inflated wholesale prices.  The location is required to provide the labor, insurance and a list of other responsibilities.  However, the difference between the total costs and the selling price is retained by the location. For example, if the vendor loans a beverage and snack machine to the location at no charge or for a low monthly rental fee of approximately $20 per month per machine, the customer would have to buy products at the following prices. A case of beverages that would ordinarily sell for $7 at a wholesale outlet would be sold via Co-Op service at $10 or $11 per case. The customer (location) would vend the case of beverages in the vending machine for approximately $12 and keep the $1 profit. The location staff would also be doing all the work.

Owner Operator:  In some cases an individual or location management person may choose to take complete control of the vending program. This program necessitates the outright purchase of all the vending equipment.  The equipment owner is totally responsible for purchasing all products, absorbing any losses that may be incurred. Some of the expenses that the location owner or manager will experience includes: Paying taxes, labor costs, products costs, service calls, parts, repairs, insurance and other similar related expenses.  The location keeps all the remaining profits after the expenses are deducted. The average cost of goods is usually 50 percent. In many cases the management may not want to make a big profit and will sell the items in the vending machines at lower prices than a vending company or sell the prices at a loss.  For example: Some companies may pay a $.25 wholesale price per can of cold beverage and then they sell the can of beverage for $.25 as a special employee benefit.

Which is the best method?  That’s a tough question.  Each account has to be evaluated professionally to determine what’s best in each business situation.

Charles Hanna: 913 894 4979 or 800-397 8363 or visit us at: www.hanna-vending.com or email: or Fax: 913 894 0252.