A Broke Mans Guide To Starting An ATM Business

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It should go without saying that determining the right vending machine products for the customers at your location is essential to the success of your business. Perhaps this is easier said than done. Every location is different — with different customer demographics, traffic patterns, and unique requirements — and must be treated as such. Success depends on finding a mix that balances these factors in a way that meets the needs of your location. The days of stocking your machine with sugary candy, soda, and gum and watching the cash roll in are long gone.

Consumers these days are more health conscious than ever, and demand products that not only taste great, but are better for them as well. That being said, here are the biggest factors to consider when sourcing products for your machines. In June of , the USDA announced the Smart Snacks in School initiative, new federal guidelines that limit the amount of calories, fat, sugar, and sodium in snacks sold in the more than , schools that participate in the National School Lunch Program.

Where you can find the best products When it comes down to it, how you choose to source products will depend on the product type, availability, and your preferences. When you start purchasing enough products through a certain distributor, you can leverage your pricing at other distributors to negotiate better pricing. Here are some of the most popular ways to source products: Order directly through the manufacturer.

Most product companies have regional Sales and Marketing representatives that want to get their product in more retail outlets like your vending machines. You will need to order large volumes to order directly from the manufacturer. These superstores generally have cheaper prices than at most retail locations. Equally as important, a sampling event gives you the opportunity to gauge the taste profile of your average consumer.

Key Takeaways Increased health consciousness means people are demanding more healthy options. To get your vending machines into schools, you have to adhere to the strict Smart Snacks In Schools guidelines. You may have to use multiple channels to get the best prices for your products. Want to learn the Top 10 Best-Selling healthy vending products of all time? Besides continuing to find more locations, the real work has just begun! When your customer service exceeds expectations, asking for referrals becomes easy. There are 4 areas where you should be providing above and beyond service for your customers.

Vending machines are like cars. Take care of them and do preventive maintenance, and they will last a long time. When you first start your vending machine business, you might want to lean on the expertise of an experienced vending professional, to help you out. As you learn the business, you will become that vending expert. So, when you decide which manufacturer you want to purchase machines from, see if they offer machine training. They may not publicly conduct training courses.

Or if you decide to join a business opportunity, make sure they have machine training available. Rotate out the poor sellers for new products. Try different brands, placements within the machine, types of food or drinks, etc. This is good for your pocket AND helps keep the location happy. You could do the bare minimum and just keep your vending machines stocked. Try bringing a whole case of that snack to the school lunch period and hand out free samples of it. Students go nuts over this! Instead of waiting for your location to reach out to you with feedback or comments, reach out to them.

Ask them what requests they have just a few weeks after you launch. Check in with them periodically and put systems in place that make it easy for them to get in touch with you with any questions or concerns. Treat your customers like business partners. Be proactive in your communication. Click To Tweet Be responsive. Answer them in a timely fashion. A good rule of thumb is to let your locations know you will get back to them within 24 hours of them contacting you.

As decision makers are very busy though, be sure not to overwhelm them with your good intentions. There are a lot of people that want to see them each day. Make it clear that you want feedback in order to make this the best fit possible.

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That said, when you do receive feedback, respond to the reasonable requests in a timely fashion. Feedback is the easiest way to learn more about what your accounts want. Hand-deliver your commission check to the decision maker and include a hand-written thank you note. Great customer service is the key to building lasting relationships with your location. Become a master of your machine equipment so you can reduce down time and keep your accounts happy.

Find creative ways to engage with your customers. The question you need ask yourself is which option makes the most sense for you. Your goals — are you trying to create a vending empire or is it a side gig to earn some extra cash? Without experience in vending, this process may take up to a year before you get up and running with a couple of machines. Look through craigslist, bizbuysell.

The major advantage here is that you have a ready to go business — no need to purchase your own machines or find locations. Generally speaking, this option requires less upfront time, but depending on the size and quality of locations, it can be the most expensive option. Make sure to thoroughly research the existing business and analyze the current sales figures to ensure that the money is worth the price. Also, check out how much time is left in each of the contracts! In this situation, you get to partner with a company that has an established brand, a proven business model, and a dedicated sales team to help you secure vending locations.

In most situations, you also get machine training and sales support varying on the opportunity throughout the entire location acquisition process, and on the franchise side this will generally extend throughout the life of your business. You also benefit by joining a community of other vending business owners. It depends on you, your situation and your goals. Your three main choices are 1 start your own vending business, 2 Buy an existing route, or 3 Buy a franchise or business opportunity.

Interested in learning more about starting a vending machine business as a franchise or business opportunity? You become your own boss How many times have you daydreamed about answering to nobody but yourself? Your business has a positive impact on the community With increased legislation and higher demand from consumers for healthy products, vending has shifted into a way of helping people make healthier decisions throughout their day. Vending Machine Equipment What type of technology can help you get ahead of traditional vendors and work more efficiently Take Me to Part 2.

Vending Machine Locations The secret to finding and securing contracts with only the most profitable locations for your vending machines Take Me to Part 3. Vending Machine Products Learn the best distributors and wholesale outlets to get products for your vending machines Take Me to Part 4. Startup Strategy Discover the different types of vending business startup options are out there and which one is the best suited for you and your appetite for risk Take Me to Part 6.

The healthy vending movement has been increasing rapidly in the last decade and there are no signs of it slowing down. Why We Wrote This Guide. There is an estimated 4. The first English vending machine sold apples and postcards. Growing quickly in a new industry is too challenging. If I own a vending business the money will come.

The money is there for the taking, but you must work to earn it. A basic internet search will yield all of the possible benefits of registering your LLC as: A small business through the SBA A veteran-owned business A women-owned business A minority-owned business A business owned by someone with a disability deaf, blindness, etc. This is not an extensive list — but should certainly get the wheel turning! Take Me to Part 1. Take Me to Part 2. Take Me to Part 3. Take Me to Part 4. Take Me to Part 5. Choose The Right Startup Option For You There are several different ways you can actually start a vending machine business including joining an established business opportunity or launching a business on your own.

We want to help you get started today. If you really do homework, you can find successful people in every one of these categories. Ask Yourself These Critical Questions: The New Era of Vending. It has more advanced features such as route management and inventory management that allows you to build planograms and view inventory using product names without having to manipulate the reports in Microsoft Excel Nayax has not announced plans to implement a loyalty card system as of this writing The other major thing to note is the pricing between the two services. Like they say in real estate, the most important thing is location, location, location!

Generate high quality leads L eads, leads, leads. B efore making contact with a qualified location, you need to plan your contact strategy. To do this, you need to clearly define what your primary objectives are for any given meeting. Qualify Leads N ot every location or lead is created equal. Good questions to ask include: If so, who is their vendor?

Do they have a contract with their current vendor? If so, how much longer are the locked in for and how happy are they with their current service? Do they currently receive a commission from vending machine sales? If so, how much are they receiving? Additional services being provided by their current vendor?

To keep things unique and fresh, we recommend that you diversify your methods of communication in order to a make the process more enjoyable for the contact, and b yield higher results for yourself. The purpose of this strategy is to bring your business to the attention of target locations as quickly and efficiently as possible.

Take a look at why the variables exist, what they mean for the location AND for you, and where the large opportunity lies. N ow that you have machines in the field, establishing systems that spread your message without your direct involvement will be one of the best optimization and growth strategies you can implement. Key Takeaways Lead generation is one of the most vital parts of your business. Trends in Healthier Eating. Market research like sampling events and sales tracking will go a long way to help you arrive at the right combination.

Nutritional Value — an overall trend in healthier eating means that your customers pay attention to things like calories, sugar and fat content more than ever before, so create a mix that includes healthier alternatives to traditional junk food. The products in your machine must also meet the guidelines for your specific location.

Take special care at schools and hospitals, where guidelines are strictest. Save money and increase your margins by buying direct from the manufacturer.

Novelty — customers in your market may get bored with your product mix, so periodically introduce new products to avoid predictability and to keep the customer interested in your machine. Smart Snacks in School. I want to help you get started today. Engage Directly With Customers You could do the bare minimum and just keep your vending machines stocked.

Use neon colored signs or stickers to alert your customers when you put in a new product or reduce the price of an existing product. Will you be the lucky winner? Key Takeaways Great customer service is the key to building lasting relationships with your location. Your Vending Business Startup Options. Pros Cheapest way to get started. Cons High time investment needed to get started. Pros No need to purchase your own machines. No need to find locations. Cons Buying older and possibly out dated equipment. Coming into expiring contracts or no contracts at all. Pros Turnkey startup model.

Expert location acquisition services. Cons Typically require higher initial capital investment than starting a vending business solo. In those cases there is a three way fee split.

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I receive a portion for the ownership of the machine my partner receives a portion and the location receives a portion. The best one did just over in revenue and the worst just under However in november and december the hotels are slow and I'm lucky if they break You have to be connected to a merchant service company that will handle all of your transactions.

If you google ATM processing company you will find a lot of scammy looking businesses that will try and get you to sign a 5 year contract and they will want to take a portion of the surcharge fee.

The company who I use does none of that. Their name is Payment Alliance and they have been great. They run a background check on you before you are set up and you do have to submit a good deal of paperwork but there are no special permits for where I live. It may be different depending on where you live. I'm curious if I wanted to get into the business, what would I do? How much money and work would it take from me? How long until it becomes profitable? Depending on the location 6 months to a year and a half is the ammount of time it has taken my machines to become profitable.

Some locations are better than others. Basically I am at the bank every morning getting cash and then I run a route to each machine and put the cash inside. There is not a lot to servicing the machines. Installing the machine and getting it programmed is a little bit of a learning curve, but whoever handles your processing should be more than able to walk you through it over the phone. Anything special required from the locations i.

I drill four holes with a masonry bit where the machine has the slots and then I hammer the bolts in. If through a phone line you may need extra phone line and a phone jack splitter. Lastly you do have the option to make the machine wireless in which case you will order a wireless box from your processing company. This method actually costs you about 20 or so dollars each month.

After that what you do is program the machine so that it is conected to the terminal that your processor gets you. This sounds more complex than it really is. Once you do it once you'll remember it. Thank you for doing this AMA, I have found it very interesting. Can you please explain what you do once you need to move a machine that's been bolted into the ground? Thanks so much for the quick response! Also, how much time per month would you say you put into it? Is the 'labor' on your part worth it to you?

What made you decide to get into the business to begin with? What's the ideal setting to get started in this business? I'd assume big cities are already flooded with ATM vendors. I try to run all of mine through the internet at the location. Phone lines are slow and they are really expensive to run a new one. If neither of those options are available than you can make the machine wireless in which case its a monthly fee of about 20 dollars. I find this pretty interesting.

So, you mentioned that you have a 3 way split: Yourself, Your partner, and the location owner. Are the profits dividend automatically each month directly to their bank accounts? Also, Doesn't the processing company take a cut as well? Let's say that an ATM does transactions in 1 month. Is this a correct scenario?

Smart Snacks in School

I'm not sure how all processing companies handle this but the way that my processor makes money is off of interchange. If you have ever used an ATM that is not owned by your bank you will notice that that machine will charge you and your bank will also charge you a fee. The reason your bank is charging you a fee is because they are being charged by the processing company. I used to think that my bank was just being greedy and charging me for no reason. Come to find out they are being charged everytime you use a machine that is not within your banks network.

I am also interested. What are the ideal locations for them? How do you approach a business? What kind of cuts does the business take? There are some locations that are better than others but there really isn't a guaranteed spot that will produce big numbers. When the hotels are full they do really well. I like places that are more stable though. People in call centers aren't spending money like they are at a bar but it is a convenience so they use it. Most of my new accounts come from referrals. If I were brand new to this the first thing I would do would be to join a networking group of some sort, or maybe you have a friend who owns a location that would benefit from it.

You own the machine, you take care of the service, and you give them a kick back each month. It's beneficial for both parties. And how do you secure the machine from leaving? Are they heavy as hell? Have you change operating or security procedures in anticipation of its proliferation? Are your machines tied into a central network for monitoring? I pretty much look like everyone else. I am very aware of what is going on when running around for work. How expensive is it to get the machines serviced? How often do they need to be serviced?

What is your return per day from different venues? How much cash do you put in each machine? I do buy them from payment alliance. It is just easier to deal with one company than try to get everything from seperate people.

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Payment Alliance has been really great to work with. I remember my girlfriend's mom looked into it a couple of years back. I'm assuming that aside from capital, the most important part of running an ATM business is location. Foot traffic is the biggest factor. I have a machine in an office building that emplys like people or something crazy like that. I don't know why they need cash but they use that machine all the time. Have you ever been robbed while servicing a machine?

Do you take any preventive measures to protect yourself? Has one of your machines ever been robbed or stolen? I also don't place machines in really shady places though. How easy is it to place machines? Big chain gas stations will have contracts with banks and credit unions so the chances of you getting any of those locations is about 0. I would focus on smaller businesses. Not all of them are going to own their own and most have never even considered an ATM.

I have never had anyones identity stolen, but that doesn't mean it cant happen. I have a very good relationship with the owners and staff of my locations so if they see in suspicious people lurking around the ATM they will call me and I will come physically inspect it. That does not happen often but it is possible. Most often people will place skimmers on gas pumps or bank ATMs because they are used a lot more.

When you test your locations for 3 months what is the minimum that you will accept making before deciding its not worth it? If it is within range of other machines I would be ok with a machine doing 50 to 75 transactions a month. If it is out of my way than I want it to do a lot better. Sure, I am located in central Florida. We get a lot of tourists here which is great for my business.

This has happened three times since I started and all at the same location. Someone goes to use the machine, it charges their account and they don't get the cash. Each time it was because the phone line connection got busy or lost connection during the transaction. In this case the individual has to call their bank and dispute the charge and in each case they have been refunded immediately.

Sometimes there are really crummy bills that will jam the machine, every once in a while, this is an easy fix. Coming from a vending business I can't tell you haw many times I had to drive halfway accros town because someone didn't get their chips and soda. This business runs much smoother. What kind of business license s do you need and what is this type of business technically classified as? If I lived somewhere that had a lot of international travelers I would definitely consider it.

I know guys in Miami that do and they say that they do quite well. The only thing that I have opted into with my locations is a dynamic currency conversion. Basically if anyone from another country wants to use my ATM they can see what how their currency would convert to dollars. Are there any specific online communities or websites that you would suggest looking up to get more of an idea of the business?

Also any websites to look for ATM route buying opportunities? Or just your standard business broker websites? I've never seen any online communities. I have seen some broker sites but they looked kind of shady. The processing company that I use does have a online forum but it sucks really. Once the machine is paid for you don't have a monthly cost. Basically, the wireless box sends out a cell signal for the machine to communicate through and you have to pay for that. What sort of infrastructure do you require at each location?

How do you negotiate these sorts of things with the owner? Do you require just a phone line? Do you have that installed? What about power drops, etc. The machines do not use a lot of power probably about as much as a computer so that usually is not an issue. Most locations have wifi these days so I will conect the machine to the router box with an ethernet cable.

What kind of risks are there to reloading the machine with money? How do you do this without getting robbed? How much security do you use? Basically I try to load my machines in the morning hours. I don't feel unsafe at all. I know most everyone at all my locations and I don't place machines in locations that feel shady. Thank you for this, I'm finding it very interesting! Have you ever had to deal with fraud or theft? How about card skimmers?

No I have not, but it could happen. What's to stop someone from telling their friends and family to use their ATM machine for the transaction count to increase? The trick here would be asking friends and family that are fully reimbursed for their transaction fees like ally and charles schwab? I saw that you said you do multiple trips throughout the week to avoid having x amount of cash on you without a security team. Do you carry anything on you? I would assume getting a permit, if needed, would be pretty easy in that line of work.

I do have a taser. I can see each machine from anywhere that I have an internet connection. It shows the ammount of total transactions and the ammount of withdraw transactions. You can get a copy of the EJ. It shows requested amount, dispensed amount, any reversals, last 4 of card. No names or pin numbers. Its just for records and to ensure you balance. Hey, hope I'm not too late to the party.

I have seen a lot of machines popping up around my area providing cash without charging a fee, pretty much putting the fee charging ones out of business. Any idea how the fee-less ones generate revenue if they do? And I'm not talking about bank or premises owned ones. Unfortunately the truth is I was helping a friend move. Reality is not so much fun. So apart from getting a location, machine from a processing company, fill it with cash, what kind of setup is there?

Do you need to have a guy come set it up initially, or any legal stuff? Insurance I suppose but anything else? Do you have a bank account for each ATM machine? Do you have any direct employees What is your workload like? How is your day spent? Could you take a vacation? I don't have any direct employees. I set a route for the day, bank opens at 9: I am working on getting more comfortable with delegating this business so I can take more time off.

At this point I can't really up and leave. Use of this site constitutes acceptance of our User Agreement and Privacy Policy. Log in or sign up in seconds. Entrepreneur subscribe unsubscribe , readers 1, users here now Schedule an AMA: Contact the Mod group via P.

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I have a few that I don't think have been asked yet: How much cash could they store? Never had any of those problems. Thanks for the questions, sorry it took me so long to reply. How often do you have to fill it? What is insurance like on this business? What's the biggest problem you've had with the business, and how did you overcome it?

How much do you make off a machine, average? That's a lot of green. It's been very informative.

Pretty good for them. Always wondered why they were down with it. It's like a vending machine. You're just vending money. Sometimes simplicity brings the best success. At least not yet: And I pay myself a salary.

A lot of the money is reinvested. If not which machine do you prefer? Sorry I see you mentioned the capital required barrier to entry, any others? Hopefully, insurance; otherwise, you. I really don't have an answer for you. Are there any services that security companies may provide for people in your line of work? How much was your initial startup investment? Is that part of your capital? Or are you just against the idea? Thanks for sharing this info! How does that equate to a percentage of gross? I have never had this problem. Are you exposed to any fraud or liability?

Or is it all on banks? And if so, does your insurance cover it?

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