How to Start Vending Machine Business in the Philippines
For many people in the Philippines, vending machines are a convenient way to get quick and easy access to the things they need.
For business owners, vending machines can also be a great way to generate extra income. Unlike other franchises, such as convenience stores and the like, vending machines require less labor, and you're not limited by the people you can hire.
This makes vending machines a good business opportunity, especially if you're just a beginner business owner.
In this article, we'll discuss the vending machine franchising business so that you can take advantage of this business model.
If you've ever enjoyed picking different products neatly in front of you in a place that otherwise has no store, you've experienced the convenience that vending machines can add to your life.
Vending machines are ATMs for products. They're machines that take payments and dispense goods, be it drinks, food, sanitary products, or even medicine.
This business model is steadily gaining popularity among business owners because of its primarily automated nature; you don't have to sell your goods on-site to make a profit. All you have to do is deploy a machine, stock it periodically, and repair the machine when it breaks down.
Vending machines are highly convenient on the customer side because they can be placed in common areas that otherwise couldn't hold an entire store, such as long hallways between school classrooms, right outside your office in the heart of the city, or the like.
To make a vending machine work, all you have to do is insert a bill or coin. Modern digital vending machines accept digital payments, such as wallets and credit cards. Then you select from the product, and the machine dispenses your product.
As you can see, a vending machine is a simple, highly-effective business model that can be very profitable. However, there are still many considerations that you need to have before you start one.
So now you know what vending machines are, but how do they stack up to other types of businesses? What are its advantages?
In this section, we'll talk about the advantages of vending machines so that you'll have a better idea of the advantages you can enjoy should you decide on this line of business.
One of the main appeals of this kind of business is that it's not as complicated as other businesses.
Vending machines only have a simple business model that's easy for individuals to grasp compared to other types of businesses, such as convenience stores, where you have to source suppliers, deal with people, and do all sorts of inventory and accounting.
While some of those things still exist in a vending machine setup, it's on a much smaller scale, making it more beginner-friendly compared to big operations like convenience stores.
In vending machines, you have to stock your machine route, repair it when it breaks down, and gather your income. Of course, you're going to have basic accounting and business networking. Still, generally, you don't need the amount of interaction and complexity you can get from other forms of business.
You don't need to interact with many people daily if you have a vending machine business.
Another great benefit of a vending machine business model is that it's largely automated and doesn't need plenty of labor to make it run. As long as it's not malfunctioning and connected to a power source, it has the possibility of gaining your profits, even if you're not there directly supervising the whole procedure.
This makes vending machines incredibly ideal for passive incomes. It can become a lucrative side hustle or even a leading venture.
Of course, there are risks involved. For example, your machine could suffer vandalism and theft in their locations. Still, as long as you pick correctly and plan, you should be able to enjoy the automated nature of your vending machine business.
Another benefit that vending machines offer is that you can quickly scale your business from one to a hundred.
A few vending machines can be a good side hustle that can get you a significant income. However, owning five or ten devices won't take that much time; the machines only need to be periodically stocked, checked, and repaired when needed. You can quickly expand your operations on a massive scale.
If you want to scale your operation, all you have to do is buy more vending machines, and plan their routes.
The stocking and maintenance are relatively easy as well, so if it gets to a point where you're occupied every day of the week, you can easily hire and train an employee to take over some of the work for you.
This way, you can quickly scale up vending machine businesses if you want to take a more significant part of the pie.
Vending machines can potentially become very profitable, especially if you can find items with high conversion value and high-profit margins. Secure a wholesaler for your items and buy in bulk, and you can maximize the margins for every item you sell.
Another thing you can do is to ensure that the products you're trying to sell are in demand. You can do this by looking at the other vending machines within that area and noting the products they offer, especially ones that are always sold out.
You can also talk to convenience stores or vendors nearby and see what people buy from their products. This gives you a hint about what you can offer as a competition.
But don't worry, you don't have to know everything at the start. Operating a vending machine is a long-term strategy; you can adjust your plan if you find new information about your products.
Unlike other forms of business, you have direct control over your vending machines, should you choose to go down that route.
Businesses such as convenience stores and similar types of establishments employ multiple people. For example, to run a convenience store, you need to have front liners, accountants, managers, stockers, and maybe delivery people. The same is true for most other establishments, such as water refilling stations.
While it's necessary to hand over control to multiple people, it does feel less like your own business if other people are running it. You might choose to become part of the workforce yourself, but you can't do everything, and it's impossible to run it without giving up control.
However, that's not true for fencing machine businesses.
This is because you don't need to employ other people; you can easily take charge of the procurement, stocking, and all the other tasks that need to be done. You have direct control over everything, making it feel like your business without giving up control.
As we've seen from the previous sections, vending machines can be potentially lucrative, so it's no wonder you want to get started immediately.
Not so fast, though. This is a business, just like any other, and there are some things that you need to consider before you deploy your first machine. In this section, we're going to go through all of these first.
The type of vending machine you're going to use heavily affects multiple aspects of your business, so you need to consider it. There are various types of vending machines, which we'll discuss in detail.
- Bulk vending machines. This machine offers only one product type but can deliver the product in big bulks. It's ideal if you have small-variety, highly-popular vending options that sell out quickly.
- Soft drink vending machines. This vending machine offers soft drinks of all kinds. Thus, it is refrigerated, and multiple makes and models offer many different temperatures to choose from. There are also hot and cold options designed to deliver the ideal drink temperature upon purchase.
- Snack vending machines. This type of vending machine offers different kinds of snacks. Despite having the same properties as a bulk vending machine, it differs because it can provide multiple types of snacks in various sizes. Popular choices include chips, energy bars, gum, chocolates, and more.
- Coffee vending machines. True to its name, this type of vending machine offers a selection of coffee. Other varieties provide different kinds of coffee, tea, chocolate, and more. They are gaining popularity in high-traffic self-service places such as conference rooms, offices, and gas stations.
- Frozen vending machines. This vending machine keeps ice-cold food, such as desserts, in its stock.
- Hot food vending machines. The reverse of the previous vending machine keeps hot, fresh food in stock. It's ideal for self-service places that periodically need meals, such as offices, malls, schools, significant events, etc.
- Combination vending machines. True to its name, this type of vending machine holds multiple stocks. Popular combinations include snacks and soda, drinks and meals, desserts and drinks, and more.
- Custom vending machines. You can customize vending machines to offer in-demand products that are not typically offered in machines. Hotels usually customize vending machines to dispense toiletries on their premises. Vending machines also work for Covid-19 kits, supplies, and more.
This means that what you can sell, how you take payment, and how much money you can earn are impacted by what kind of vending machine you buy, so make sure you know what you're buying before you shell out the money.
How you will be paid should also be a central concern regarding your vending machine business. Vending machines only used to accept coins and bills, but now you have digital options that can scan credit cards or accept payment online.
Deciding on this is essential because it's how you will get paid. Plus, it's going to affect things like costs and maintenance.
A digital vending machine, for example, would be more convenient and accessible to people. It will most likely bring you more profits. However, it's also more expensive and sensitive to tampering or vandalism. If you want to use digital machines, you need to be sure that it's in a safe area; the repair costs if one breaks down could also be pretty steep.
On the other hand, older vending machines that accept cash are cheaper and easier to come by. They also cost less to repair and aren't as susceptible to vandalism. The downside is that they're not as accessible or convenient for people, so you might make less money.
In the end, it's up to you to decide what vending machines you want to buy and how you want to get paid. Just be sure to do your research, so you know what you're getting into.
One of the primary considerations when starting a vending machine business is where you will deploy your machines. The location and route you're going to take will be the primary determinant of its profitability.
If you don't put it in the right place, you will lose out on opportunities to earn a profit and might also risk your investment.
If it's not in a well-secured, well-trafficked location, it's more likely to be targeted by vandals and petty thieves, which means you're going to spend more for your machine instead of earning from it.
An additional consideration is distance. Since you or an employee will likely be the one to do check-ups, maintenance, and stocking, you'll want to place it in an easily accessible place to start with.
If you're only just starting, choosing popular and easily accessible places near your base of operations is ideal.
Places such as parks, malls, office complexes, bus stops, etc., are all high-traffic locations that aren't such a security risk. You can also add your offerings to a popular hangout spot, such as convenience stores.
Of course, make sure to talk to the right people and get the proper permissions, if necessary, before you put your vending machine in a certain location.
Whenever easily-replicable business models like this arise, one of your first considerations should always be whether you want to establish your brand or franchise from a more popular one.
Both are valid options, with their advantages and disadvantages, and it's critical to consider both choices because they will affect how you operate your business.
Starting your own brand will give you all the freedom of being a business owner. You'll take care of every aspect of your business, from buying the vending machines to stocking them with products that you choose on your own. Checkups, maintenance, and system updates will also be your care, if necessary.
This gives you the freedom to experiment and create solutions that are ideal for your route. Nobody will tell you what to do, and you don't have to split the profits with anyone.
On the other hand, you'll have to give up some control if you're franchising. If you're buying a franchise from a famous brand, you will not have complete freedom over your business. For example, branding and choosing what to stock won't be under your direct influence; the franchise will have a say in it.
You will also split profits with the franchise, which means your income won't be as good as if you have your line of vending machines.
However, as a tradeoff, there are fewer decisions that you have to make. You don't have to bother yourself with the minutiae, such as what to stock, which supplier to go to, and even who to get for maintenance.
Having your own brand is more fulfilling and profitable, but franchising might be ideal for new businesses.
Franchising is one of the best ways that you can start to get into the whole vending machine game.
In franchising, you won't have to take care of many things, such as choosing what products to stock and which supplier to buy them from. This makes the business model largely accessible, especially if you don't come from a business background and are just dipping your toes into this business.
Thus, here are the best vending machine franchises you can buy into here in the Philippines.
Barista Choi is a famous coffee vending machine line in the Philippines. This coffee vending machine is a nationwide franchise that delivers multiple Filipino flavors of coffee. They appeal to customers because of their cheap yet energizing and delicious products that can be relied on to boost energy.
Barista Choi is appealing to businesses because it's highly accessible in distribution and price. It's a popular nationwide franchise, so you can always have a unit delivered to your location.
More than that, it's also one of the cheapest franchises you can buy. The primary Coffee vending machine starts at Php 12,000. There are plenty of coffee flavors, such as Pinoy Blend, Milky Choco Loco, Macchiato, Cappuccino, Milk Tea, and Coffee White. Each flavor costs 190 per kilo.
● Starting price: Php 12,000
● Vending machine type: Coffee vending machine
● Inclusions: Machine
Another popular vending machine franchise is Chong Cafe, a franchise that primarily offers coffee and coffee-related products. The main product of their franchise is the Hot Vending Machine Package which holds multiple coffee flavors.
Like Barista Choi, the Chong Cafe also sells high-quality and delicious coffee mixes. They have flavors like white coffee, hot choco, hazelnut, 3-in-1, cappuccino, and caramel.
Chong Cafe is a little pricier than Barista Choi, but it has sleeker aesthetics and a bigger capacity. It also has a six months-to-pay installment option through Billease.
They also offer other vending machines, such as cold drink machines with juice and iced tea of various flavors. Aside from that, they also sell coffee machines such as grinders and manual espresso machines.
● Starting price: Php 20,995
● Vending machine type: Coffee vending machine
● Inclusions: Machine
The well-loved Coca-Cola brand is one of the most popular and reliable vending machines. They have a line of machines that vend traditional coke products such as Coke cans and varying-sized plastic bottles.
Getting a vending machine from Coke can be a good franchise, especially if you're looking for an established brand everybody loves. With this kind of franchise, you don't need to pick what to stock the machine since you will just periodically refill it with Coke products from a distributor near you.
Moreover, checkups and maintenance are also easy since you can talk directly to company representatives about the kind of help you need. You can also choose between glass front and stack vending machines.
● Starting price: Available upon inquiry
● Vending machine type: Soft drink vending machine
● Inclusions: Machine, products, installation, customer service
The Philippine Vending Corporation is the premier vending machine franchise in the Philippines. They don't just offer a single unit or vending machine type; they provide solutions that you can tailor to the vending machine experience you want.
For example, if you have an office, they offer traditional vending machine services, subsidized vending machines, or company vending machines. Subsidized and company vending machines are incentive programs where your employees can get either discounted or fully-free snacks or drinks from the vending machine to raise their morale.
They'll take care of stocking it up and doing maintenance; all you have to do is pay a set fee in a set period.
They also have commercial solutions you can take advantage of, such as vending machine services for schools, offices, BPOs, and more.
● Starting price: Available upon inquiry
● Vending machine type: Various vending machine types
● Inclusions: Machine, products, installation, customer service
TouchPay Franchise is a growing vending machine service in the Philippines that offer digital services such as load, bank account access, payment centers, and more. For customers, paying through these nearby online payment centers is a vastly superior experience compared to going to the bank or government agency to make their payment.
This company offers many opportunities for aspiring vendor machine owners. They are much smaller than other vending machines, so they won't take up much space where they're deployed and can fit more.
It's also fully digital and can process card payments for customer convenience.
● Starting price: Available upon inquiry
● Vending machine type: Digital vending machine
● Inclusions: Machine, installation, customer service
Now that you know everything about the advantages of opening a line of vending machines in your area, you might be eager to start. Before you do that, you need to know the proper steps to take to lay a solid foundation for your business.
This section will outline the steps you need to take to open a vending machine business in the Philippines.
Any good business endeavor must begin with good planning, even if it's a business as seemingly simple as opening vending machines. You must consider a few logistics and factors before buying your devices, such as the following.
- Location. Before you even buy a vending machine, you need to have a good idea of an accessible, high-traffic, and safe place you can place the device.
- Vending machine type. The type of vending machine you're going to get will impact the kind of products you can sell and how you can accept payment.
- Franchise vs. your brand. Another thing that you should consider is whether or not you will franchise or make your brand.
- Markets. You need to find the right match between what the people in a given area want to buy and what is profitable to sell.
- Suppliers. Once you have your product and your market, you need to see whether you have suppliers willing to sell you the products in bulk and for wholesale so that you can increase the profit margin of each product.
Once you've laid out your business plan, you will want to start your execution. The first step is buying your vending machine unit from your chosen supplier or franchise.
As it might take a while to arrive, you can spend your time securing the location of your machine; if you can get people or other establishments in the area to keep an eye on it, all the better.
It would be best if you didn't forget the permits you need before you can operate your vending machine. Ensure that you're registered in the DTI as a business entity and that your taxes are in order.
Once your machine has been fully stocked and deployed, you will want to monitor it closely for a few days. Ensure that there are no problems with your chosen location, that the power supply is stable, that there is minimal risk from vandals, and that there is enough foot traffic that can turn to customers.
You should also have a maintenance plan for your vending machine, such as making sure that the products don't go stale and are restocked in a timely manner, that the machine itself is regularly cleaned, and that any technical problems are addressed swiftly.
If everything is going well, all you have to do is sit back and wait for the profits to come rolling in!
Vending machines can be a profitable side hustle or even a main business if you do things right.
It presents a beautiful passive income opportunity since operating vending machines doesn't have to take a lot of your time every day; all it takes is to monitor it several times every week to ensure it's stocked and functional.
This article talked about vending machines, why you should start a business from one, and what advantages you can get. We also went over the best franchises you can buy into for profit.
You now have everything you need to know to run a successful vending machine operation here – all that's left is for you to follow up!
Vending machines can be priced as low as Php 12,000, which is ideal for start-ups and small ventures. However, the price can vary wildly, ranging to as much as Php 100,000 for each unit, depending on the brand, type, and franchise.
Yes, vending machines can be profitable, especially with the right products in the right market. They are convenient for the customers since they will give them the products they need without having to go through the hassle of finding a store. It also doesn't take a lot of labor to stock and maintain.
There are many types of products you can sell in vending machines. The most popular snack and drink products are chips, candies, soft drinks, hot drinks, and more. However, you can also sell desserts, electronics, and even frozen food, as long as you have a vending machine that can offer it.