Vending Business Market Research

Market research is all about getting a better understanding of the market that you are planning on entering. A market is made up of both customers as well as operators. You need to understand the current state of affairs in order to allow yourself to position your new vending business for success.

Your market research will help you to identify some of the risks and opportunities in the market. It will help you to identify good locations and the kind of machines and products that would do well in them.

Hiring a market research company to put together a report on the local vending industry would be great. This option is cost prohibitive though so it is more likely that you will end up doing your own investigations.

When it comes to starting a vending business, market research should be the first thing that you do. Here are some ideas on the kind of information that you should collect and how to go about it.

Demographics

Before you attempt to vend products to people in the area that you are targeting you have to understand as much as you can about them. This will help you to know where to place your machines and what products to offer.

If, for example you are in a fairly young area with lots families then you might look at a product line that targets children. If the population is older then it might be worth trying to place machines within retirement communities.

Surveys

If you are trying out a new vending niche it will be important to gather some data from prospective customers. This will help you to confirm whether or not your business ideas are viable and if there is enough demand.

Put together a brief questionnaire and ask people within your target area what they think. Would they be prepared to buy the products that you intend to sell via vending machines? How much would they reasonably expect to pay for such items?

You should get the best response from your surveys if you do them in person but you could also look at purchasing a database and doing them by phone or mail. To get a better response you could offer respondents some kind of free gift such as a voucher for a free coffee at a local cafe. This may end up costing you but the information that you end up obtaining from local prospects could be of considerable value to you.

Try to talk to some business owners about whether they think your product line would sell on their premises. If you get a positive response from them then you can contact them again at a later date once you have started your vending business and have machines ready to place.

Scouting the Area

Once you have decided on the area that you want to target and have marked out your territory on a map go out for a few drives and explore. Visit some of the places where you would expect to find vending machines. Take note of the range of machines that are in place, if they are being used, what products are being vended and how well maintained they are.

The Competition

Research some of the other vending players in the local market. You should see their company details on the side of their machines and you will find many of them listed in local business directories such as The Yellow Pages.

Learn as much as you can about their machines, products and the vending services that they offer. Call them on the phone posing as a 'decision maker' for a possible machine location and find out how they work with their clients. Do they offer commissions? What can you learn from the way that they are doing their marketing? How can you improve on what they currently offer?

Don't forget that regular retailers are also your competitors. Some vending locations almost have a captive audience in that people either have to use the machines or they have to walk for 10 minutes or more to a store. People always have alternatives though and if they don't like your machines or your service they bring products from home or take the trouble to purchase them elsewhere.

Distributors and Suppliers

Machinery manufacturers and dealers may be able to give you specific information relating to your market when you are starting out in business.

An even better source of market information will probably be local distributors or the suppliers of the inventory that you use to stock your machines. They will be dealing with other local vendors and will be able to tell you what products are selling well in vending machines and what product combinations and volumes you should start out with. Of course every location will be different though so you will also want to start collecting your own data as soon as each machine starts making sales.

Updating your Research

Don't forget that things change. Your initial market research will be extremely useful but it must be updated from time to time so that you keep up to date with an ever changing market. Changes in demographics and product trends will mean that you may have to consider switching machines, products and locations from time to time. Keep your finger on the pulse so that you don't fall behind and lose market share to those that are paying more attention.