Investing in the business of Vending Machines in India



Life has never been more convenient! Retail has evolved from purchase and sale at physical stores, to ecommerce, where purchases are made and paid for online and delivered within a few days, to quick commerce, where the duration for delivery has shortened to hours, even minutes. As a vending machine management software company providing some of the smart and customised vending machine solutions in India for almost a decade, we can confidently say that the future of retail increasingly lies in a mix of ecommerce, quick commerce and the even quicker INSTANT COMMERCE. With instant commerce the needs of a consumer are fulfilled right when they want it and right where they are, through smart vending machines.


Here's why investing in the business of smart vending machine solutions in India is a future-friendly and profitable idea :


Long term profitability with vending machines


For instance, the margins on a small packet of chips sold from a vending machine will be lower than the margins on something more niche like frozen food item which will likely have a higher ticket price. In terms of location, there are three types of locations where vending machines can be installed: free to use spaces, rented spaces and spaces for which operators make money through rent. Vending machines at rent-free and rent-income locations have the chance of providing better margins, since there are no additional expenses eating into a vending machine operator’s income.


Better margins with vNetra


The vending machine business is a game of margins. A vending machine operator can earn margins between 12% to 36%. If they get their products refilled by a third-party distributor, they might stand to make a margin of up to 12%. However, using Vendekin-powered smart vending machines and purchasing their products directly from the manufacturers and brands using vNetra, the one-stop vending machine management software and platform, vending machine operators stand to earn margins as high as 35%.


And apart from greater profitability, here’s why maximising margins is all the more important now. The vending machine industry has seen a lot of change in its operations and locations. Earlier, vending machine operators could rely on recovering their investment through rent-income for their vending machine and all the sales income earned through vending products would only mean more profit. Over the years and especially after the pandemic the rental income from vending machines has become close to nothing, making it crucial for operators to seek better margins on products. And this is where the benefits of being a part of instant commerce or VCommerce kick in.


This vending machine business model, powered by Vendekin’s vending machine solutions all across India and beyond, comprises getting brands and vending machine operators on board one platform, known as vNetra. This way the brands can directly sell to the operators, cutting out all the middlemen, and ensuring better margins for operators and fewer hassles for brands. The same platform also provides important sales data, such as consumption patterns based on time and location, as well as, operational data, such as machine health data, inventory stock etc to operators digitally. This helps vending machine operators analyse and improve their vending machines’ sales and operations, overall improving profitability. All through this, Vendekin’s marketing and customer success team handhold businesses and operators in understanding the market, choosing the right locations, promoting their products with attractive offers, post-sales support and annual machine maintenance too.


Lower cost of setting up



Some of the best vending machines in India come at varying costs depending on their size, the technology powering them and of course the products they sell. A single smart vending machine may cost anywhere up to Rs. 1 lakh and slightly higher for customised vending machines.


At the same time, setting up a brick and mortar store can cost upwards of Rs. 15-25 lakhs, starting from rent or acquisition of the location, registration, taxes, interior designing and architecture of the store, purchase of products, hiring of staff and a lot more.


Vending machine operators with Vendekin are advised to start with a minimum 5 machines installed at strategic locations of their city identified with the guidance of Vendekin’s team. This means that the lowest initial cost to get started with selling through vending comes close to Rs.8 lakhs, with a turnaround of the investment within 12 to 36 months.


Apart from a lower cost to get started, digital vending machines, the hassle of maintaining cash payments and maintaining a physical inventory also goes away. Smart digital vending machines have the option to accept online payments from almost every major platform, and the vNetra vending machine management software and platform maintains a record of every sale, every product digitally.


What could be some additional costs?


An operator might have to hire part-time staff to refill the machines on a regular basis. If a business has about 5 to 10 machines placed in a single cluster of a city or region, then a single person part-time is enough to manage refills. Another cost could be CCTV camera surveillance for the safety of the vending machine and its products.


When you’re running Vendekin-powered smart vending machines, you are operating some of the best vending machines in India. You can sell literally ANYTHING with these digital vending machines, as they can be customised according to the product. Some of the customised vending machines created by Vendekin are today selling t-shirts, frozen seafood and even paan to thousands of end-users!


In addition to all the above, Vendekin is also working towards introducing the concept of Micro Markets in residential complexes, commercial spaces and corporate houses, to ensure that consumers do not have to step out of the premises to fulfil their needs or cravings. Didn’t we say that the future of vending in India is bright and only getting better?


If you’re a business that is interested in exploring the vending machine business, an investment or to increase sales by taking the store to the end-consumer, then reach out to us on marketing@vendekin.com or call +91 9555712713.