Vending machine

A vending machine is a machine that dispenses merchandise when a customer deposits money, validated by a currency detector, sufficient to purchase the desired item (as opposed to a shop, where the presence of personnel is required for every purchase). It is believed to have been first invented by Hero of Alexandria, a 1st century inventor. His machine accepted a coin and then dispensed a fixed amount of "holy water".

Introduction

In the United States, vending machines generally serve the purpose of selling snacks and beverages, but are also common in busy locations to sell newspapers. Another common class of vending machines are photo booths.

Items sold via vending machine vary by country. For example, some countries sell alcoholic beverages such as beer through vending machines, while other countries do not allow this (usually because of dram shop laws). Cigarettes were commonly sold in the U.S. through these machines, but this practice is increasingly rare due to concerns about underaged buyers. Sometimes a pass has to be inserted in the machine to prove one's age. In some European countries, by contrast, cigarette machines remain common.

With regard to newspaper vending machines, a customer could open the box and make off with all of the newspapers after paying for one (or in the alternative, leave all of the newspapers outside of the box). The success of such machines is predicated on the assumption that the customer will be honest (hence the nickname "honor box"), which is helped by the fact that having more than one newspaper is not often useful.

Vending Times, a publication covering the entire vending industry, is the most popular trade magazine for U.S. vendors.

Cigarette vending machines in Tokyo, with promotion girl

In Japan, with a high population density and low rates of vandalism and petty crime, there seems to be no limit to what is sold by vending machines. While the majority of machines in Japan are stocked with drinks, snacks, and cigarettes, one occasionally finds vending machines selling items such as bottles of wine, cartons of beer and pairs of underwear. Japan has the highest number of vending machines per capita, with about one machine for every 23 people.

A vending machine business

In the U.S., most vending machines are operated either by store owners, or by individuals who buy or rent several machines, stock the merchandise, and keep some of the profits. Other machines, such as U.S. Postal Service machines are maintained by governmental or quasi-governmental entities. An independent vending machine business attracts people who have never been in business before. These vending machine businesses operated by these individuals can be divided into two broad categories: bulk candy and soda/snack vending.

Any type of independent vending operation requires the entrepreneur to be willing to act as a salesman in persuading locations to accept the machine. Operators typically report high rejection rates, in the order of 9 times of 10. Bryon Krug's book Vending Business-in-a-Box advises:

The key is not being discouraged when people tell you no. Unless you are a natural-born salesman, you'll get turned down many more times than you are told yes â€“ . . . 90% of the time, people tell me no or I find out that the person with decision-making authority isn't there. However, that's okay, because there are thousands of businesses within forty minutes of me and each location that says yes is worth $50 to $1,000 or more to me. So, even if I only get five or ten good locations per day (and a large number of "no's" to go with them), it's still well worth my time to find locations.

The area in which a machine is placed at a location can make a difference in sales. Krug lists several possibilities:

Next to the entrance
Near to the exit
Next to the water fountain
In front of the restroom
In the break room
By the coffee maker
Next to the other vending machines
By the receptionist
Next to the cash register
Next to the listening station at a music store
Next to the change machine
In the waiting area (e.g. at oil change places).

Bulk candy and gumball vending

Main article: Bulk vending

Bulk candy machines are mechanical machines that vend a handful of candy, a bouncy ball, or perhaps a capsule with a small toy or jewelry, for one or two quarters. The gross margins in the bulk candy business can be quite high â€“ gumballs, for instance, can be purchased in bulk for 2 cents apiece and sold for 25 cents. In addition, the machines are typically inexpensive compared to soda or snack machines. Many operators donate a percentage of the profits to charity so that locations will allow them to place the machines for free.

Bulk vending may be a more practical choice than soda/snack vending for an individual who also works a full-time job, since the restaurants, retail stores, and other locations suitable for bulk vending may be more likely to be open during the evening and on weekends than venues such as offices that host soda and snack machines.

Full line vending

Main article: Full line vending

Full line vending machines are soda and snack machines that sell cans or bottles of soda and/or small packages of snacks. For operators, soda/snack machines have the advantage that many locations recognize their need for such machines. Many locations will, in fact, take the initiative to contact a vending company to request installation of a machine. Moreover, companies recognize the difficulty in moving these machines and are less likely to request removal, unless the operator does a poor job of servicing the machine.

Specialized Vending

One of the more controvertial types of vending machines in the United States are those that dispense personal products, typically in public toilet facilities. The machines in ladies restrooms typically sell some form of absorbent device for menstruation such as a pad or tampon. The machines in men's rooms, when they are present, are almost exclusively used for the sale of condoms. These are often found at toilets used by transient persons in high traffic locations, such as bus stations and truck stops.

Safety

Most modern vending machines have been extensively tested and designed to inhibit theft. Many of these machines are designed essentially as large safes. Every year, a few people are killed when machines topple over on them, either while trying to steal from them, or venting frustration on them, especially when a malfunction causes the machine to fail to dispense the purchased item or the proper change (leading to the humorous saying, "change is inevitable, except from a vending machine"). An article in the Journal of the American Medical Association (Nov. 11, 1988, p. 2697) documents 15 cases in which men trying to get a can out of the machine were crushed. Three died, the other 12 required hospitalization for injuries such as fractures of the skull, toe, ankle, tibia, femur, and pelvis; intercerebral bleeding; knee contusion; and one punctured bladder. The article states that because the sodas are located in the upper half of the machine (so that they can fall into the dispensing slot), the center of gravity of the machine is abnormally high and the machine will fall after it has been tipped only 20 degrees, a deceptively small angle. A large, fully loaded soda machine can weigh in excess of 1000 pounds.

Malfunctions

The actual causes of vending machine malfunction are usually many-fold. Coin acceptors often jam up, especially if a child inserts a bill or other foreign object into the coin slot. Certain vending machines use a spiral kind of mechanism to separate and to hold the products. When the machine vends, the spiral turns, thus pushing the product forward and falling down to be vended. If the products and the spiral are misaligned, the spiral may turn but not fully release the product, leaving the spiral snagged on the product and having it hang there. This may cause repercussions to the alignment of the products behind it if someone knocks the hanging product down, as the spiral must move a fixed distance. Vending machines usually have a phone number that angry users can call for service. The phone can ring any time.

Bill validators are also a source of frustration for many customers, especially when they falsely reject a legal tender bill that happens to be crumpled, ripped, or dirty. U.S. vendors, realizing they were losing sales because of validator malfunctions, formed the Coin Coalition to support the United States dollar coin. Their efforts to completely replace the dollar bill with the Sacagawea were unsuccessful.

Innovations

Vending has gone through significant changes over the decades. Tim Sanford of Vending Times notes, "many vendors today do not remember the urgency with which industry leaders called on their peers to install coin mechanisms that held the patronâ€™s money in escrow until the vend was made; to post a telephone number that a customer could call to report a failure and request a refund; to make sure their drivers were cleaning the machines adequately and replacing burnt-out lamps; and so on and on." More recent innovations include improved coin and bill validation and the rapid adoption of sense-and-feedback systems to verify that the vend was made[1].

One of the newest vending innovations is telemetry. According to Michael Kasavana, National Automatic Merchandising Association Endowed Professor at The School for Hospitality Business, Michigan State University, the advent of reliable, affordable wireless technology has made telemetry practical and provided the medium through which cashless payments can be authenticated. This is important because research shows that 50% of consumers will not make a purchase from a vending machine if its â€˜use exact change onlyâ€™ light is on. Machines equipped with telemetry can transmit sales and inventory data to a route truck in the parking lot so that the driver knows exactly what products to bring in for restocking. Or the data can be transmitted to a remote headquarters for use in scheduling a route stop, detecting component failure or verifying collection information. Telemetry could be one of the most significant developments in vending technology since the invention of the bill changer[2].