By Nancy Wagner Updated May 11, 2022
Vending machines give your employees and others in your building an easy way to obtain a quick snack for a handful of change. But these machines also come with some disadvantages that may affect your employees and resources in ways that are not conducive to maintaining your bottom line.
Added Administrative Costs
Even if you don’t own the vending machine, your employees and others with access will want their money back if they don’t receive their goodies. That means you must assign an employee the responsibility of handling the claims and returning people’s money. You’ll also need to set up a system for obtaining and keeping track of the funds to get reimbursed by the vendor who manages the machines. Another down side is the ease of access to the machine, which may result in your employees wasting five to 10 minutes each time they need a quick snack.
Competition for Other Food Vendors
When you subsidize a cafeteria in your building, you may be taking money away from the operation because employees use the vending machines instead. The same goes with small coffee shops or diners that exist in your building, especially if they rely on employee traffic to stay open. If they receive less income due to the machines, they may look for a location with more traffic. This means you lose the variety and convenience these shops provide, such as take-out meals, tables to hold meetings and the hot and cold foods than are not available in a machine.
Quality and Quantity of Snacks Offered
If your business promotes healthy eating, a vending machine may negate that message with its sugary offerings. Unless you secure or stock vending machines with healthier snacks, such as granola bars, fruit and bags of protein-rich nuts, the offerings won’t quite match up with your mandate. Another disadvantage becomes apparent if your machine is located in a building or office with just a handful of employees, The food may get stale since the vendor refilling the machine may not restock it as often.
Costly Investment
According to employment website Indeed, vending machines can cost between $3,000 to $5,000 new, and between $1,000 and $3,000 refurbished. As VendingMetrics points out, saving money with a used machine can backfire in the long run, as there's no warranty and may require more time for service. An older machine might not be as profitable if it doesn't take advantage of the news technology and products.
The cost of stocking it with beverages and snacks adds to the cost. If the machine allows debit or credit cards, you must pay transaction fees. Plan to pay taxes on the income you make from the machine, requiring additional time for an employee to gather and organize sales data.
Stocking the machine with an eye on making the most profit possible means you need to grab supplies at wholesale stores, an additional investment in time. You also need to keep an eye on expiration dates, and throw out food that’s no good anymore, adding to the stocking costs.
FAQs
Added Administrative Costs
What are some disadvantages of vending machines? ›
Vandalism problem maybe happen
Additionally, the vending machine has many limitations that cannot receive curved money and still suffers from some common errors such as the machine not returning goods, swallowing customers' money, leading to the situation that customers will lose confidence in the vending machine.
What is the problem of vending machine? ›
Vending machines can encounter various issues, such as malfunctioning components, expired products, or mechanical failures. It's essential to address these issues promptly to ensure customer satisfaction and maintain profitability.
Is owning a vending machine business hard? ›
Owning anywhere from a few to a few hundred vending machines can be a manageable, successful business for owners of any experience level. The cost to start a vending machine is basically just the cost of the machines and stocking them—you won't need an office space to house them.
Are vending machines a good side business? ›
The vending machine industry is an attractive option for both new and experienced entrepreneurs because of its versatility. It can be a great weekend side hustle, a low startup-cost business or an interesting new way to expand your portfolio.
What are the 5 disadvantages of machines? ›
Machines are expensive to buy, maintain and repair. Machine with or without uninterrupted use will get broken and worn-out. Their maintenance or repairs are costly, difficult to set up and operate without previous training. The pollution caused by machine increases, generating waste, augmenting power or oil use.
How risky are vending machines? ›
Full size vending machines can weigh over 1,000 pounds (450 kg), creating a risk of serious injury or death if tilted until they fall over. Users may rock machines in order to obtain free products, release stuck products, or obtain change.
Are vending machines bad for the environment? ›
Vending machines also have environmental impacts, not only from the food they offer (waste), but also packaging waste and Greenhouse Gas (GHG) emissions from the energy they consume.
Why does the vending machine business fail? ›
Failing to Maintain, Clean, and Service Machines on Schedule. Your vending machine business relies on consumer trust and willingness to buy. A dirty or broken machine does not bring confidence and sales will fall.
Are vending machines hard to maintain? ›
Follow these easy maintenance tips to ensure maximum uptime and profits: Use food-grade detergent, warm water and a soft towel to clean the entire vending machine two or three times a year. Wipe down and sanitize all visible surfaces of the vending machine every time it is serviced on its regular route.
You just need enough money to buy a vending machine and fill it with product, as well as a space to put it. You can either rent space for your vending machine monthly or pay the property owner through sales commissions. You can start a vending machine business without physical office space or a website.
How profitable is 1 vending machine? ›
Are vending machines profitable? The average vending machine earns $35 a week, but your profitability depends on the location of your machine and the kind of goods sold. Operators purchase goods in bulk and sell them for a premium in their machines, making margins as high as 86% on items such as water.
What is the success rate of vending machines? ›
Vending machines as a business have a success rate of above 80%. Given the low startup costs and the high success rate, vending is a great way for new entrepreneurs to get into business.
What are the disadvantages of vending machines? ›
Vending machines are not as cheap to purchase and operate as they may appear. The cost of a machine can set you back up to $10,000 and on top of that are the running and maintenance costs. The cost of stocking the machine with products and throwing away and replacing expired products can be a costly ongoing endeavor.
Is the vending machine business saturated? ›
Many of the best locations — places with heavy foot traffic, or large worker populations — are already saturated with machines. Some owners we talked to have to make 100+ calls before landing a decent location.
Where is the best place to put a vending machine? ›
Residents will utilize your vending machine when they come and go from the building, when restaurants are closed, or they don't feel like traveling to get a snack or drink. Consider locating the machine in common areas, nearby the buildings entryways and exits, or near the gym, pool, or laundry room.
What are the disadvantages of vending machines in schools? ›
Vending machines in schools have been criticized for promoting unhealthy eating habits among students, contributing to concerns about the overall health impact of these convenient food options. This can lead to several negative effects on students' health, including: Increased consumption of sugary and high-fat snacks.
What is the disadvantage of street vending? ›
However, this activity causes a lot of disadvantages including traffic congestion, environmental pollution, visual pollution and reduced food safety. It is important to effectively manage street vending to reduce these significant negative effects.
What are the disadvantages of reverse vending machines? ›
Disadvantages. Despite the efficiencies found in reverse vending machines, their high acquisition costs are a disadvantage, as machines typically cost more than $6,000. Due to these costs, private business owners typically cannot afford to acquire and manage the machines.
