Owning a vending machine can be incredibly profitable depending on the types of products in the machine, where it is located and a number of other factors. Once you have made up your mind about starting a vending machine business, the next step is determining whether you want to buy one outright or lease it. Each of these options has its pros and cons. Below we are going to look at both options so you can determine which would be better for your new business.
Cost and Payments
A major consideration when deciding between buying or leasing a vending machine is the upfront and ongoing costs of owning the machine. When you decide to buy a vending machine outright, you will incur a large upfront cost of purchasing the vending machine. This does not apply to leasing one. Many companies will not ask for an upfront payment and so this is not something you have to think about.
However, you need to think about the ongoing costs of owning the vending machine. With a purchase, you do not have to think about the monthly payments or installments. When you lease one, you have to factor in the monthly payments or installments and these can eat into your profits.
Ownership
It is obvious that when you complete the payment for a new vending machine, you get full ownership as soon as all papers are signed and payments received. However, you might not be the outright owner of a leased vending machine until you have finished paying for it. The good news is that many vending machine merchants consider your monthly payments as installments towards paying for the vending machine. They will allow you to get into an agreement where you pay a monthly installment and then have full ownership of the machine once your agreement ends. These types of contracts usually last 3-5 years.
Repairs
When you purchase a vending machine, you are responsible for the repairs. You have to coordinate regular inspections and pay for any repairs that are required. With a leased vending machine, vendors will usually coordinate the service for you until you have completed your payments and the machine belongs to you. This is also true for vending machine rentals where you get a fully serviced machine for your business. This can remove the stress that comes with thinking about inspections and repairs as well as paying for them.
Product Selection
If you want full control of the types of products you can add to the vending machine, buying one is your best option. The company no longer has any say about the types of products you can add as well as the prices you can charge for these products. This puts you in a better position to serve customers best. Also, it allows you to switch up the products should you find some products are not doing as well as you hoped.
Because there is so much competition in the vending machine space, your pricing is very important. Having the ability to compete on prices instead of thinking about the profit margins after you pay for a leased or hired vending machine is a great option to have. If there is little competition, you can always charge higher prices so that you have higher profit margins.
Owning a vending machine is a great option for those who want to make some extra money. Buying one requires a huge up-front investment, although it gives you more flexibility. Leasing one with the option of owning it in the future is a great option for those who do not have the upfront cash to invest.