Last week I spent a few minutes discussing the predicament I found myself in several years ago and how it led me to vending. In this 2 part post I'll discuss the 7 reasons why bulk vending appealed to me and why it should appeal to others as well. The 7 reasons can be found below (we'll cover reasons 1-4 in Part I and 5-7 in Part II)
1. Limited Time Commitment
2. Limited Startup Cost
3. Limited Risk
4. Excellent Cashflow and Profitability
5. A Business for the Whole Family
6. Tax Advantages of Business Ownership
7. Run It From Your Garage or Anywhere
1. LIMITED TIME COMMITMENT
The beauty of this business is that you can put into it whatever you like. In my situation, I was already working full time so I needed to be able to fit whatever I was doing into evenings and weekends. A typical bulk machine holds enough capacity to allow for a 5-6 week service cycle which meant that I didn't have to be servicing my machines constantly. I also needed to make income passively without being there. Bulk vending allowed me to be make money continuously while working day-to-day in my professional career. It allowed for me passive income that Kiyosaki discusses in Rich Dad, Poor Dad
2. LIMITED STARTUP COST
I literally started my business for less than $200! This money went towards the books I read to educate myself on the industry and towards my first used machines that I purchased through online auctions (I wouldn't purchase the cheap machines I got then knowing what I know now, but they provided a place to start!). Once I got a better understanding of the business, I had a couple more expenses that were necessary including:
1. Umbrella Liability Policy (approx $350 annually)
2. Business Cards (approx $40)
3. Product Cost (variable depending on what you're vending)
The beauty of the bulk business is that you can start small and use your cashflow to grow it if you're unable or unwilling to borrow along the way. I know operators that now live solely on their bulk vending income and make hundreds of thousands in the process.
3. LIMITED RISK
The only risk you really have is in your equipment. As long as you have an umbrella liability policy to cover your liablity, then equipment loss or damage is your main concern. Much of this risk can be mitigated by choosing quality locations and by developing good relationships with these locations and their employees. I, like everyone in this industry, have had locations go out of business and have lost my equipment in the process. I've also had equipment stolen from locations by other vendors or employees who worked there. These are some of the negatives of the business that I will discuss later in the week. In most cases, though, I've been able to recover my equipment and move it somewhere else! With businesses going under all around me during these troubling times, my bulk vending business keeps right on trucking by simply changing locations when necessary!
4. EXCELLENT CASH FLOW & PROFITABILITY
The bulk vending business is a constant stream of cash. There are no accounts receivable to worry about, so the business becomes very predictable over time. The product costs vary from 8-35% depending on what you're vending (gumballs, candy, toys, stickers or tattoos), so there's the potential for great profit if your are frugal and don't go overboard with non-necessary expenses and overhead. In the next several weeks I'll clue you in to the greatest and most cost-effective route vehicle that you can use to maintain high profitability levels.
Coming Tomorrow: Reasons Why Bulk Vending Is Appealing For the Busy Professional - Part II.
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