Guide to Starting a Vending Machine Business in South Africa

The vending machine industry is expanding and presents opportunities for entrepreneurs seeking new business ventures. According to 6Wresearch, the compound annual growth rate (CAGR) of the South African Vending Machine Market size is estimated to grow at 8,31% between the years 2025-2031.

There are several reasons for this projected industry growth. As one of the fastest urbanising countries, South Africa is experiencing increased consumer demand, creating opportunities for industries like vending machine businesses to flourish.

In this guide, we look at various factors to consider before starting a vending business in South Africa. In addition to that, we’ll lead you into the right direction on how to start.

Types of Vending Machines

There are various types of vending machines for you to look at if you’re considering this as a business.

• Snack vending machines
• Coffee vending machines
• Fresh food vending machines
• Frozen vending machines
• Drink vending machines
• Smart vending machines
• Product vending machines

One of the early questions you need to ask yourself when you’re looking into starting a vending machine business, is whether you should rent or buy them. Well, there are benefits and disadvantages to each, and the choice will depend on your needs, budget, and capability.

Benefits of renting a vending machine:

• Renting a vending machine costs way less than the upfront capital required when you’re buying one.
• You don’t have to maintain the vending machine. The responsibility of maintenance falls on the owner of the machine.

Disadvantages of renting a vending machine:

• Long-term costs may run high and potentially exceed the cost of buying one. This only applies if you’ll be renting for a long time.
• Less control of the vending machine. This may be an inconvenience if you urgently need to change or repair the machine, and would have to wait on the availability of the owner.
• Slow profit rate. The rental cost will have an effect on your profit, which might reduce the rate of your business growth.

Benefits of buying a vending machine:

• Save costs in the long run.
• Flexibility in product selection and inventory management.
• Full control over changes in products, maintenance, etc.

Disadvantages of buying a vending machine:

• A vending machine may take a long time to pay itself off.
• Extra cost of maintaining the vending machine.

According to Top Vending, the general cost of a vending machine is around R 87 000, where advanced models cost around R 140 000. Many businesses do not readily have this kind of capital.

As an alternative, you can look for second hand, refurbished vending machines. The risk will always be higher with second hand items. To mitigate the risk, you should ensure there’s a warranty for the machine you’re purchasing.

For instance, Vending Solutions’ warranty states that there’s a 1-year warranty on mechanical working parts of a refurbished machine, a 30-day warranty on labour, and 6 months on the coin validator, note readers, refrigeration unit, and electronic components. Additionally, there’s a 2-year warranty on the motor vend.

You can also look for second hand vending machines from the following online platforms:

• Facebook Marketplace
• Junk Mail
• Gumtree
• AfriMart

NB: When using online marketplaces, be cautious and watch out for scams. Make sure to inspect and verify the product before making any payment.

When you’re starting a vending machine business, you’ll need to conduct research on various vending machine suppliers. In your research, you’ll have to compare costs, look up reviews from other businesses, and gain a good understanding of how the suppliers operate.

Here’s a list of vending machine suppliers in South Africa:

1. The Vending Company

The Vending Company is a family owned business that has been in the vending machine industry for over 18 years. They offer a range of vending solutions, including; traditional confectionery and beverage vending, shrinkage control, activation vending concepts, retail vending, fully automated vending concepts, as well as customised vending solutions.

2. Vending Solutions

Vending Solutions has over 25 years experience in the vending industry. Vending Solutions started with little more than an idea but with sound knowledge of the vending industry. This is also one of the first black owned vending companies in South Africa.

Vending Solutions operates nationally from its head office in Johannesburg, and has established itself as the largest black owned vending machine business in South Africa.

3. Top Vending

Top Vending has been providing vending solutions in sub-Saharan Africa for over 30 years. Top Vending is also known as a one-stop shop for Business Networking International (BNI) & Hotels, Restaurants and Catering/ Cafés (HORECA) refreshments.

Their current product offerings include; combination snack machines, hot beverage vending machines, bespoke vending solutions, water coolers, and Kastella – premium chilled and sparkling water dispensers.

4. Corporate Vending Solutions

Corporate Vending Solutions is one of the largest vending companies in the Western Cape. This vending company supplies a variety of vending machines. Their rental options also include after sales service and maintenance.

Corporate Vending Solutions offers vending machines for snacks and drinks, hot beverages, and water coolers.

There are a variety of locations that are great for vending machines. This includes the following:

Offices:

Businesses serve as great locations for vending machines. If you’re starting your business with just one vending machine, offices with less than 50 employees can be profitable for your vending machine. Instead of having to wait for lunch to go and get a snack, or even other things you can have on vending machines like painkillers, etc, having a vending machine in the building helps solve time and provides convenience.

Hotels and Accommodation Facilities:

When people are on vacation, away for business, or merely just away from home, they might want to grab a quick snack. Having a vending machine in the building allows them to grab that snack without the inconvenience of having to go to the store.

Apartment Buildings:

Apartment buildings are ideal locations for vending machines due to the high traffic of residents and visitors coming and going at all hours. The constant visibility and easy access provided by a vending machine can encourage impulse purchases, even when people weren’t initially planning to buy something.

Educational Institutions:

Educational institutions are a great location for vending machines, as students frequently want snacks or drinks between classes. In addition to snacks and beverages, vending machines can be stocked with items students may need urgently and may not have immediate access to, such as sanitary products, personal hygiene items, phone chargers, or over-the-counter medicines.

Hospitals:

Another busy location that does well for vending machines is hospitals. Vending machines are a convenient option for potential customers, whether they are the ones making the purchase or the patients being visited who are in the mood for a snack.

When you’re running a vending machine, it’s important to have a strategy to manage inventory. Inventory management lets you avoid overstocking, lost sales, as well as improve customer service.

How to Manage Vending Machine Inventory

Here are a few tips on how to manage your vending machine inventory.

• Track sales: You can use inventory tracking software like VendSoft to monitor sales and optimise inventory.
• Set stock levels: Set minimum and maximum inventory limits to avoid overstocking.
• Use smart technology and software: Install systems for remote monitoring and automated restocking alerts.
• Follow the FIFO (First In, First Out) method: Prevent expiration by placing newer stock at the back and move older stock forward.
• Check expiry dates: Regularly remove expired or near-expiry products to maintain freshness.
• Plan schedule for restocking: Plan your refills based on the date from sales tracking to avoid unnecessary trips.
• Rotate your product selection: Increase sales by removing stock that has slow sales, introduce new items, and change them based on season and demand.
• Prevent shrinkage and theft: Track your inventory to check for any issues of theft and ensure your vending machines are tamper-proof.
• Adjust product pricing: Adjust prices based on sales and demand, where necessary.
• Regularly maintain machines: Check your machines to make sure they still operate effectively. Check for jams, payment issues, and cleanliness.
• Leave your contact information: Make sure you’re easily accessible in cases where issues of the vending machine need to be reported.

Vending machine financing is also known as equipment financing. So, you can basically take a business loan to support your purchase of new or used vending machines. There are two ways you can get funds for your vending machine business, which are:

Financing

This is a business loan where you purchase your equipment through a loan. You can make a down payment, then pay the remaining amount in monthly instalments. In this instance, you will have to qualify for the loan through credit checks and sign a fixed-term loan agreement. The equipment acts as security for the loan. When the agreement comes to an end, the machine is paid for and yours to keep.

Lease

With leasing, you also make a down payment, then you pay a monthly amount to keep using the equipment. You will also have to sign a fixed-term agreement, but at the end of the agreement, you will either renew your contract or return the vending machine.