To Borrow or Buy? The Pros and Cons of Vending Machine Operator Relationships
There are a wide range of reasons to become a vending machine operator – it’s a great way to earn extra income, forge a career path with control over your own hours, your business, and more.
However, it’s critical to decide exactly how you’ll enter the world of vending machine operation – and, even if you’ve already started your own journey or have been in the industry for years, it’s critical to constantly evaluate if you’re getting the most out of your operation and still meeting your unique goals.
Particularly in the case of beverage vendors, there are two distinct routes vending machine operators can take – you can either borrow machines from a bottler or purchase them from a manufacturer. Each choice has its own distinct advantages.
With that in mind, let’s explore the pros and cons of loaning versus buying and dive into some key factors that might help you make the decision that’s best for you.
To Loan or To Buy? Common Considerations for Vending Machine Operators
Bottlers often offer free operator programs, which give you the use of loaned machines provided that you sell the bottler’s products. Obviously, this saves you a lot of money in terms of pure capital expenditure, though that savings comes stapled to other contributing factors we’ll explore shortly.
Contracts and Pricing
To take advantage of a bottler’s lending program, you often need to enter into a contract to purchase products exclusively from the bottler and sell on those products in your vending machines. Should you choose to own your own machines, there are no such contracts, meaning you can offer a wider variety of products per machine. This saves space for your customer, because a machine is not required from each beverage company.
Likewise, service will need to be completed in partnership with the bottler should you choose to engage in a contracted lending program, limiting options and sometimes resulting in longer wait times – though you’ll need to find your own service provider for machines you own, if you don’t already have your own technicians.
When you own your own machines, you can leverage them for deductions come tax time. That’s not possible when they’re being loaned to you by a bottler.
Should you decide to sell your business, you’ll have a greater net worth and get a larger return if you own all of the assets, vending machines included – though that also means more to oversee and take stock of and, in the case of an unexpected downturn like the one caused by the COVID-19 pandemic, greater risk of money being tied up in assets that can’t be used.
When you own your own machines, you can effectively choose what profit you’ll make – though, like many of the considerations we’ve explored, this can come with added complexity in terms of managing and operating your own business instead of working inside the terms of a stated contract.
Let SandenVendo Help You Get Started or Ensure You’re Still Making the Right Call
At SandenVendo, we’re happy to help vending machine operators determine which route is best for them.
For entrepreneurs entering the industry and veterans alike, we can recommend authorized distributors who can not only provide new SandenVendo equipment, but also provide suggestions and advice, as many used to be vend operators, themselves.
We can also put you in contact with finance companies that can help you with the ins and outs of the industry.
SandenVendo is proud to be a leader in the vending industry, and we use that expertise to help you make the most of your decision to become a vend operator, regardless of which route you choose.
To learn more, contact us today.