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  • VENDZONEWINDOW OF OPPORTUNITIES

    Vending Business Guide 2010 Version 1.0

    Vending Business Guide. Vendzone Pty Ltd. All rights reserved

  • Copyright and Disclaimer

    Copyright 2010 Vendzone Pty Ltd. All rights reserved.

    This material is subject to the laws of copyright and is restricted to registered licence-holders who have entered into a User

    licence agreement with Vendzone Pty Ltd.

    It is an offence, punishable by AUD$250,000 for the licence-holder to make the material available to any unauthorised person,

    either via email messaging, by placing it on a network or by supplying hardcopies.

    To arrange for additional user licences please contact us:

    Vendzone Pty Ltd PO Box 5353 Clayton Vic 3168 or by e-mail info@vendzone.com.au

    Disclaimer

    This document is intended for informational purposes only. It contains the findings, research and opinions of the author(s). Any

    use of the methods in this document is the complete responsibility of the reader. By reading and applying these methods the

    reader agrees to hold the authors and publisher totally free from any liability from the results of the readers actions.

    Note

    For the purpose of ease all figures used in illustrations and calculations are GST Free.

    Vending Business Guide. Vendzone Pty Ltd. All rights reserved

  • Hi...

    My name is Kapil Sheth

    Owner of Vendzone

    Vending Business Guide. Vendzone Pty Ltd. All rights reserved

  • Introduction

    Vendzone is a provider of completesolution that allow individuals,families and businesses to make theirmoney work harder, smarter andmake a positive and real differenceto their financial income

    Vending Business Guide. Vendzone Pty Ltd. All rights reserved

  • What is a Vending Machine?

    Vending Machine is a retail store except:

    It does not require you or your staff to run it!

    It never closes!

    It doesn't have to be established at one fixed permanent place!

    It doesnt require large capital outlay associated with establishing many other retail businesses!

    Vending business can be as big or as small as the owner wishes it to be!

    It doesnt require you to leave your job in order to get yourself into the business!

    Vending Business Guide. Vendzone Pty Ltd. All rights reserved

  • WhyVending?

    Vending machines are becoming the fastest-growing

    method of merchandising. Retailers can benefit from

    enhanced security this method of retailing provides.

    Furthermore, it also requires lower inventory needs

    as well as no employee involvement.

    Vending Business Guide. Vendzone Pty Ltd. All rights reserved

  • The opportunity

    Vending industry is worth over $100billion per year worldwide and growing fast!

    With 5.4 million vending machines in Japan, there is one for every 23 people

    In the United States that ratio is roughly double.

    Comparatively Australia has a lot lesser per capita machines

    It means there are opportunities...heaps of them!

    Vending Business Guide. Vendzone Pty Ltd. All rights reserved

  • Recipe for success in Vending

    Successful Vending Business primarily requires:

    Right Vending Machines

    Right Locations/Sites

    Right merchandise stock

    Right attitude towards the business

    The knowhow to get all above right!

    And hard work!

    Vending Business Guide. Vendzone Pty Ltd. All rights reserved

  • Right Machine

    Right machine means:

    Type of machine that is suitable for a given location/site

    Majority of businesses in Australia are either small or medium sized (up to 100employees), which means that your ideal machine should be a compact combinationmachine unless you have secured large locations (over 100 employees), in which caselarger machines would be required.

    A Compact combination machine is one which is smaller in size and can vend chips,chocolates and drinks all in one instead of having separate machines for drink andsnacks.

    Machine should be of high quality, reliable and technologically advanced

    Investment in your machine should justify sales generated in an average office,warehouse or a factory. In other words an expensive high end machine may not beright for your business especially in Australia.

    Vending Business Guide. Vendzone Pty Ltd. All rights reserved

  • Right Location/Site

    Right Location/Site means:

    A location that is safe and secure. End of the day a vending machine is yourproperty

    A location that has a good number of staff preferably above 20 and with goodvisitor traffic

    There is no set formula to know in advance how good or bad a location/sitecould be. Generally speaking blue collar males tend to use vending machinesmore than their counterparts. Again that is not necessarily right in all cases.

    Best way to find out is try out a location/site and give your best, however movethe machine away to another location/site if sales figures fall a lot below youraverage target in spite of your genuine efforts to improve sales for a period of6-8 weeks.

    Vending Business Guide. Vendzone Pty Ltd. All rights reserved

  • Right Merchandise Stock

    Right Merchandise Stock means:

    Quite simply stock that sells! Basic retail principle.

    Try and put nationally advertised famous products (Coke, Solo,Sunkist, Lemonade, Smiths chips, Mars, Snickers, Picnic bars..etc)

    Avoid products that are not known

    Study your customers and their needs. Give them more of whatthey use (not necessarily what they ask for!)

    Be dynamic, creative and enthusiastic about your customers andtheir consumption patterns.

    Vending Business Guide. Vendzone Pty Ltd. All rights reserved

  • Right Attitude

    Right Attitude means:

    Vending business is a business. You have the full authority,accountability and responsibility of your business.

    All the rules of running any successful business applies

    Yes it can be run as a part-time but not as a part-effort.

    Be fully committed to your business.

    You need to have goals, plans and perseverance

    You are the Boss, and vending machines are your employees, whowork hard, earn money for you and yet never ask for holidays!

    Vending Business Guide. Vendzone Pty Ltd. All rights reserved

  • The knowhow

    The knowhow:

    It is my intention to present as much insight into the vendingbusiness as possible in this document however you can notexpect to learn how to swim without actually getting in thewater!

    Get the basics right, if in doubt, ask us and be enthusiasticabout your business.

    Enthusiasm is the real secret of success

    Vending Business Guide. Vendzone Pty Ltd. All rights reserved

  • Hard work

    Nothing can be achieved without hard work!

    There is no substitute for hard work

    Vending business is no exception

    Whoever tells you that vending is a lifestyle

    business is really kidding you!

    Vending Business Guide. Vendzone Pty Ltd. All rights reserved

  • Basics

    Getting a brand new compact combo vending machineinstalled at an average site should roughly cost you not morethan $5000

    Average sales from a location/site should not be less than$60 per week

    Average cost of goods should not be more than 50% of sellprice

    Operating expenses should not be more than 8% of totalannual sales

    Vending Business Guide. Vendzone Pty Ltd. All rights reserved

  • Worst case scenario

    If these basic rules are followed strictly then the worst case scenario would be:

    Cost of machine: $5000

    Annual sales: $60 X 52 weeks = $3120

    Maximum of 50% Cost of goods sold = $1560

    Operating expense (8% of sales) = $250

    Return on investment: $1310 or 26% (not bad for worst case scenario, is it?)

    How much interest would your bank give, if you left your $5000 with them for a year?

    Vending Business Guide. Vendzone Pty Ltd. All rights reserved

  • Best case scenario

    Some of the good vending machine operators

    recover over 100% of their investment within 1 year

    using Vendzone Vending machines.

    Please feel free to use our Profits Calculator tool on

    www.vendzone.com.au for your individual analysis

    Vending Business Guide. Vendzone Pty Ltd. All rights reserved

  • Investment of time

    10 of compact combo vending machines should take

    around 4-6 hours per week to service or refill.

    (assuming they are all in one or neighbouring areas)

    Add another 2-4 hours per week for house keeping,

    stock purchase, stock count, bank deposit etc.

    Vending Business Guide. Vendzone Pty Ltd. All rights reserved

  • Purchase of Merchandise stock

    Merchandise stock can be purchased from:

    Wholesalers (Campbell's Cash & Carry, Accredited Distributors etc)

    Manufacturer (Coca-cola Amatil, Cadbury Schweppes, etc)

    Supermarkets

    Key is to stay aware of the specials and try to buy

    when your required items are on special.

    Vending Business Guide. Vendzone Pty Ltd. All rights reserved

  • Smarter buying is the key

    Normal purchase scenario

    Normal cost of a can of drink is say $0.65

    Your selling price is say $1.30

    Gross Profit margin = $0.65 or 100% mark up on cost

    Smarter buying scenario

    Specials cost of can of drink say $0.55

    Your selling price is still $1.30

    New Gross profit margin = 0.75 or 136% mark up on cost

    That's a straight increase of 36% into your bottom-line profit! Im