Why do people quit vending machine business?

Why do people quit vending machine business?

People do quit vending machine business if they are not able to survive in the market. Starting a business is easy and quitting the business is easier, but continuing the same business is difficult. In today’s world, we have seen many business models, from food delivery apps to payment sending apps. We have consumed their services. 

Every business goes through the phases of startup, growth, maturity, and decline. Right now, the vending machine business is in a growth phase. You can also read about the advantages of vending machine business. The Indian vending machine industry is anticipated to expand significantly between 2020 and 2025, with a CAGR of 14.9%. This demonstrates how large of a market for vending machines India can become in the ensuing years and is going to touch $1 billion by 2025. The adoption of smart vending machines has increased dramatically. Vending machines have seen a significant transformation in the last few years. From being ignored by others to taking UPI payments and placing direct phone orders. In India, vending machines have advanced significantly. Most companies and airports now include vending machine facilities to make it easier for consumers to purchase goods.

Snacks, chocolates, and soft drinks currently account for 88% of the vending machine business in India. However, the Vending Machine Industry projects that the healthcare sector will expand by 15% in the next five years.

Since there is still a sizable demand for various items in the market for vending machines. In the following years, there will be a huge increase in the number of items. 

In every business, the numbers are higher for those who quit business than for those who continue the business. The vending machine business is one of them. Thinking of quitting any business is a big decision. It comes when things go wrong and are extremely difficult to manage. Many of us think the vending machine business is easy to manage and can become a passive business. However, it’s not that simple.  

It is a rare phenomenon that people quit vending machine businesses because of the high cost of the service and the break-even point. A business owner may have to run this business for a short period of time, but in the long run, the business will earn a profit and the owners may reap long-term rewards. However, the business owner may miss the following important factors and consider the business to be shut down. 

Heavy Machinery due to which people quit Vending machine business 


Heavy vending machine vendify smart vending machine business in India

Most of the vending machines offer food and beverages. It is so much more. A single vending machine typically weighs 400 to 900 lbs, or 200 kg, when it is empty. We can see from the weight that it is not portable and requires laborious moving from one location to another. It gets difficult to move it back and forth due to its weight. Heavy machines need high maintenance. Machines must be moved from one location to another and then placed back if they need any attention, such as welding or mending. This gets challenging and demands more work.

Margin on items is low due to which people quit Vending machine business 

product margin vendify smart vending machine business in India

It is the most common factor to quit vending machine business. Finding a quality product to put in the machines is not simple. The seller must focus on the market, comprehend consumer behaviour, and then fill orders based on demand. This occasionally raises the price of the goods. Some things become impossible to store in the same way. As a result, there are occasions when one must decide between the product they want to put in the machine and the product the audience wants. Because of this, the product’s price increases. The decision to close the company then becomes necessary.

Getting suitable locations is hard due to which people quit vending machine business

Universal - advantages & disadvantages of vending machine

The money you make depends on the location. Competitive places where footfall is large and installing Vending machines at those places can become fruitful for business is hard to get. The rent of these prime locations is high so one cannot afford them easily. The best suitable location is very important because in the Vending business everything depends on the location. Not having a good location is a very common reason that makes business owners quit this business. 

No, it is not completely a passive business as it seems

Many of us jump into the business of Vending machine thinking to make passive income. But this is not completely true. A vending machine requires sincere efforts in order to scale up. It needs time, cost and effort all together. Since, this becomes hard to invest, VMOs find it easy to quit the business rather than continuing it further. 

Unstable profit – a major factor why people quit vending machine business.

passive income

You never know how good your machine can earn. It is that uncertain. At one point you might be earning in lakhs but on the other hand there might be zero or less sales. This uncertainty develops second thoughts in the minds of VMOs. Some days your machine can generate a good amount of sales depending on the consumer behavior and other days it stands still. This uncertainty makes it tough to continue with business. 

Additional expenses

Owning a Vending machine business is not a one time investment like it is believed.  There are additional expenses that differ the costing every time. Such as increasing rent, increasing product cost, fixing the machine and its maintenance, refilling-guy’s salary, etc. These expenses make it unaffordable to do this business. However, these are unalarmed expenses that break the desire to function in such a business. 

Technical issues

Since it is a machine and every machine requires timely maintenance. A vending machine can see technical issues at times. In that case, the machine stops functioning due to which sales decrease. Having no sales or less sales because of technical failure gives a tough time to VMOs. The only option therefore that is left with is nothing but to shut the business.

Improper planning

In India, people think business is all about money, but in reality, It is more than that. Proper planning is needed to make the business profitable. Market research about people, locations, and products is very important. Along with these factors, people’s earning capacity, their buying behaviour and the market demand for a particular item are also important. Market research can be used to forecast sales and revenue for the upcoming period. 

Not thinking about scalability

The main aim of every business is to scale and grow. Think of any big companies they all have scaled well. Scalability is all about increasing the total number of vending machines under your brand at a different location and targeting people from different areas. Reinvesting back into the business is an important factor in scaling the vending machine business. 

A Hassle for vending machine owners

Even if you have scaled your machines to a  number, most people still fail in this vending machine business. As the business owner has limited time in a day. In order to save money, business owners don’t delegate work such as inventory filling, cash collection, and many more. It is therefore important to be familiar with managing the scalability part since it is an important aspect of the vending machine business model. 

Vendify can actually do all things right from product management to inventory management, For more info drop a mail to us.

Big giants capture the small business

If the vending machine business model of your brand is not able to survive in the market, then big players in the same industry will offer your brand a big cheque in exchange for equity. It simply means that to increase their market share, big companies try to acquire dead companies in the same industry. 

Entry of Vendify

Vendify has developed a SAAS which can convert your existing machine into a smart vending machine, which is far better than a traditional vending machine. Additionally, No matter how large or scattered your vending machine business is, vendify can easily manage all your vending machine at all locations in India. With the help of ERP, you can get the analytics so that you can make growth strategies for your vending machine.  If you want to vend multiple products at the same time, then in the case of traditional vending machines, you have to order-pay-collect the item one by one, but with the help of vendify’s SAAS, you can vend unlimited items at the same time.

Do you think if you are collecting payments only through cash, it will work for the vending machine business model?

You have to give your customers options for payment flexibility. 

These factors make it tough to operate a Vending machine effectively and efficiently. The easier it is to set up a Vending business, the harder it is to manage. It does require your time and efforts to run successfully.

We hope, we gave you some insights into why people quit vending machine business. and added some important aspects to your knowledge. Do tweet out your thoughts by tagging us on Twitter. 

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