HOW TO AVOID VENDING SCAMS
Vending Scams have been around since the Vending Industry has been in existence. Scams of course are not unique only to the vending industry, but to all industries.
For three and a half decades I have owned and operated a Full Line Full Service Vending Company, Office Coffee Service, Manual Food Service Operation and a separate division as distributors of new vending equipment not to mention operating one of the largest vending machine refurbishing operations in the country. Therefore, I hold vast knowledge and experience in our industry and feel compelled to offer some advice regarding scams in the world of Vending.
Scams may come at you in so many ways of advertising such as direct mail, news paper advertising, internet advertising and more. However, the direct mail advertising is much more dangerous because they are well targeted to those who have the funds and the desire to start a business on the side or start a new full time venture.
These direct mail advertisers will try to lure you to a seminar at some area hotel or motel or other venue. You will then be sold on some great vending opportunity whereby you must purchase five, ten or more vending machines with the promise of placing the machines on new locations and you will make a fortune. In some cases the machines are already on location and in full operation which is called a turn key business. The big catch is that you have to sign on the dotted lines before you leave the seminar to get the special deal or to qualify for a trip of some sort to a sunny destination. DON’T DO IT! Again, DON’T DO IT!!
These seminars are professionally executed and the machines that these business opportunity marketers are selling are often so cute and colorful with pretty graphics and they just seem to be absolutely brilliant and a no-brainer to most of those attending. Also beware of machines that will include cold food as it is almost impossible to make money off of cold food when these machines are placed on sites with 20 to 75 employees. Cold foods such as sandwiches of all types and other items like burritos, hot pockets, pizza and even canned entrees will never pay off. With such few numbers of employees to support the machines one will have more spoilage than sales and there goes the profits for the entire account. DON’T BE FOOLED, it is a great challenge to make a food machine profitable or in most cases break even when it is placed at a site with several hundred employees and run by a professional vending company. If you are just starting in the vending business, keep away from food at all cost. Once you have become a well seasoned vending operator then you may consider it for the right customer.
Also beware of any company who will try to get you into the vending business with just one type of vending machine, whatever that vending machine may be. It may be a website with wonderful credential, or as I mentioned earlier regarding direct mail marketer and others. Perhaps it is all that company makes or distributes, however, that does not mean you must create an entire business around that one concept. It may also mean that you should compare quality of their equipment with similar equipment. No one machine fits all. You purchase vending equipment based on the type of locations you get. Some may be large and some may be small, do not put yourself into one compartment and try to make a business of it. Always try to be flexible, the larger the customer the more sales you will generate; therefore, do not walk away from a business opportunity because the machines you purchased won’t be a good fit. Purchase vending machines as you need them and based on the size of the customer. Go to websites that offer a wide range of vending equipment where similar types are displayed so you can shop and compare. Many of the vending machines you see on several of the sites which focus on just one type of vending equipment or concept are fairly new and may not be of best quality and are sometimes not around for a long time. Many come and many go. Again, do not be fooled, do your homework.
The most important advice is to shop around, check out the companies who are trying to sell you a bill of goods, call the Better Business Bureau, also call your District Attorney's Office and never make any decisions based on any referrals that the marketers give you such as happy customers who have been so successful. Chances are that if you get on popular websites where you can list items to buy and sell, you may find machines exactly like the ones that are being sold to you. These are usually people who have already been scammed and are trying to dump the equipment. Some will admit that they have been scammed and others will be too proud to tell the truth. They will tell you what a great business opportunity it is but cannot continue to operate it because a key person that was involved in the business is now sick or has to move to another state or some other lame excuse. This is when you will start to see the picture very clearly.
MOST IMPORTANT, these marketers will charge some astronomical prices for these special package deals far and beyond what the equipment and the services are worth. This, in and of itself, is the guarantee that you will never make your money back from the investment. So, in other words, you are out of business from the get go.
One last point I would like to make is that concerning Mechanical Vending Machines. These are the types where you have to insert the exact coins in the slots and then turn the round dial in order to dispense a product. These machines may be great for a location where there are a large number of employees such as 50 employees or more and where you are placing Individual Full Size Electronic Vending Machines, or Full Size Side by Side Electronic Snack/Soda Combination Vending Machines. However, they may have an isolated area or separate building with 10-15 employees that must have something for them to use. This is where a Mechanical Snack or Snack/Soda Combination Vending Machine works well and will be the least expensive choice to handle the situation. If this isolated area has 15 to 45 employees you should then consider an Electronic Snack or Snack/Soda Combination Vending Machine.
WORD TO THE WISE
IT IS VITAL TO UNDERSTAND THE VARIOUS TYPES OF VENDING EQUIPMENT AND WHERE AND WHEN TO PLACE THEM. DO YOUR HOMEWORK AND LEARN ALL YOU CAN BEFORE ATTEMPTING TO SPEND ANY MONEY. YOU MAY ALSO START IN THE BUSINESS WITH ONE VENDING MACNINE AND GROW SLOWLY. IT IS MUCH EASIER TO GET OUT OF IT SHOULD YOU DECIDED THAT THE BUSINESS IS NOT FOR YOU THAN IF YOU JUMPED IN AND MADE A BIG PURCHASE OF MACHINES FROM THE VERY START.