Vending Business Scams

So many people perceive vending machines to be an easy way to make a lot of money with little input of time or effort. Many scams have sprung up that prey on these hopeful entrepreneurs and many people fall for them.

While owning a vending machine business can be a very lucrative business you really have to create your own opportunities. There are so many fraudsters selling ready-made opportunities but for the most part these systems don't work or will end up costing you thousands more than they are worth. The Federal Trade Commission frequently does sweeps to clean up these vending business scams but new ones seem to emerge all the time so you have to beware.

In this article we look at some of these vending business scams in detail and offer advice on how you can avoid them.

Vending Machine Manufacturers and Distributors

While vending machine manufacturers and distributors are mostly legitimate in the ways that they run their businesses, they are very good at selling their products. Many people fall for the sales talk and end up with more vending equipment, and more expensive equipment than what they really needed. This is not a scam but merely one of the first things that you need to be aware of.

The best approach is to start off with only one or two machines and build up from there. Be wary of any company that tries to sell you a set of ten or twenty machines as they know that this is not the best move for a new market player and are only thinking of their bottom line.

Seminars and 'Get Rich Quick' Schemes

Occasionally you will see seminars advertised that promise you 'easy riches' with your own vending machine business. Most of these seminars are not worth attending as they offer very little in the way of useful advice but rather offer hype, false promises and a sales pitch.

Some vending machine scams give out the impression that they will be employing you and guaranteeing you a certain level of income. However, if you read the small print you will usually find that you are purchasing the machines by yourself and taking on the risk just as you would with your own business.

Don't believe any testimonials that you read or hear unless they come from a source that you trust. Some of these vending companies will refer you to some of their so called 'satisfied customers' and they will give you a glowing report on the success that they have had with their methods. These references have often been set up with people who are paid to make false statements.

Professional Locators

Start out by establishing your own vending machine route. There are professional 'locators' that will find locations for you but many vending business owners have reported that these companies almost never come up with worthwhile locations that work out to be profitable. After all, if you were running a 'locator' service and found a great location wouldn't you be tempted just to put your own machine at the site.

There are some great locators out there but they can be hard to find. If you do deal with them make sure that you don't pay too much up front and that you can inspect the locations that they find for you before paying their full fee. Some ask for 50% of the fee up front and this is reasonable.

Buying Vending Routes

You also have to be very careful when it comes to buying vending routes off other operators. While this can be a great way of picking up new accounts if you are not much of a salesman there are many potential pitfalls to be aware of. There are scams out there where sellers have arrangements with certain locations and they will sell you a route, let you run it for a while and then slowly take back all the accounts. The scammer usually has a deal with the 'decision maker' and they get their account back a few months later. This kind of scam is not common but there have been reports of such things happening.

You should make sure that you go with the seller while he services his route several times so that you get a fair idea of what you will be getting into. Having a contract is place with the client, and the seller can also offer you some protection.

Avoiding Vending Scams

Stay away from the sharks at the beginning by sourcing your own vending machines on Ebay or from other trade publications. You can usually pick up quality used machines for only a fraction of the price of a new machine.

One good way to spot a scam is to ask yourself if the offer seems too good to be true. If it seems too good to be true then it probably is and you would do well to avoid it. The Internet is full of sad stories of entrepreneurs falling for vending business scams and ending up with a garage full of machines because the routes and systems that they were promised were not profitable and just not worth the time.

You should do your due diligence before entering any kind of arrangement with any vending industry company. Contacting your local Better Business Bureau is one way to discover if the company in question has had any genuine complaints filed against it. You can also check the US National Automatic Merchandising Association (NAMA) website for lists of reliable companies in the industry.

Don't let yourself be suckered by scams and 'get rich quick' schemes. Do your own independent research and be careful who you buy machines from. Start out by accepting the fact that you will have to work hard to grow your own successful vending business rather than buying an 'easy opportunity' and ending up being disappointed.