Our post today is about an amenity that has experienced dramatic modernization and diversification in the last several years – vending machines. Today’s vending machine options embrace variety, technology, and convenience, and more innovations are constantly being developed.
Vending machines can be installed almost anywhere in a building, with an obvious preference for high traffic and high visibility areas, such as laundry rooms and lounges. Usually a wireless signal is needed for credit card transactions, which sometimes rules out spaces in basements. It is also very useful if vending machines are easily mobile, with wheels and no need to bolt it to a wall or floor. A few newer vending companies are even working directly with real estate developers during the design and construction phase to work more expensive, modern-looking vending machines into the building’s designs.
The majority of vending machines in service today still resemble the traditional, timeless machines with staples such as candy, chips, and soda.
Healthy, fresh food and healthy beverages have grown into a sizable segment of the vending industry now. Health food options have been around for years but only recently have vending companies figured out how to make those inventory lineups profitable. Certain vending companies advertise special distributor relationships that allow them to stock inventory that only Whole Foods carries, for example. Such points of differentiation, diverse inventories and creative inventory procurement practices are changing how food is sold in vending machines.
By reimagining and repurposing the basic vending machine technology, new companies are now selling pet supplies, makeup, toiletries, electronics, bike supplies, and clothing in vending machines. These types of concepts can be used to bring in to a property local, unique, and useful products that have never before been sold in the vending format.
All vending companies will provide the machines at no charge. Commissions and revenue shares appear to be disappearing from the deals I have seen, however it all depends on your portfolio’s size and how bad a prospective vending company wants to do business with you. Some smaller shops with more expensive and unique inventory items request financial support to ensure they are breaking even, which makes sense if you envision vending as an amenity for your property.
But whatever financial arrangement you work out, make sure your contract or license agreement clearly spells out requirements on inventory replenishment and service. On this point, a vendor’s scale is important. A national or regional vending company probably has a better logistics system and is able to replenish inventory and fix broken machines quickly. On the other hand, these bigger players are far less likely to offer you a revenue share, and also tend to offer more traditional vending machines, and fewer of the healthy and unique, creative options.
Most vending companies now have real-time inventory software platforms and will give out user accounts to clients, so you can see real-time sales and inventory levels.
If you’re in the market for vending machines in your portfolio, options abound. For introductions and assistance bringing vending options to your properties, please contact us at julian@jdfmc.com.