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Making a Bet into a Business

posted Jan 19, 2013, 8:29 PM by Evan Morrison   [ updated Feb 20, 2013, 3:32 PM ]

A nicer magazine style version of this blog is at https://fnord.jux.com/958736

This entry is a based on a series of events that occurred during my undergraduate years. Looking back I think that I was fortunate to have it end up where it did and would not recommend that anyone repeat the activities listed below.

It started during a quiet day at work. I was sitting with the manager on shift talking about vending machines of all things. We started on the topic after a person had tried to use the chip-vending machine and had a packet of chips stuck inside. The manager had just given them some money from the till to push through a second packet of chips and to release the first. Our discussion progressed past the horror and entertaining stories we each had of vending machines madness and soon to the question of what happens when money from the till is used to reimburse a customer for a vend gone bad. The manager explained, commonly he'd keep an eye out for the attendant restocking the machine and ask for change, or as was more often the case, the vending business would get a free vend. It wasn't long before one of us made the observation, that vending machines typically just show up in businesses one day and most employees are mostly unaware of the deal that's been done to get them there. Typically, no-one ever actually questions the existence of a vending machine in a large business.

So came the challenge, “I bet that I could buy and plant a vending machine in a building without any problem”.

Over the coming weeks, I researched vending machines online and found a suitably affordable RP120 automatic can dispenser and made the purchase. I picked it up the following week and back in my apartment assessed how I was going to make it work. When I did pick it up, I was given sage advice from the previous owner. “Stock Coke and keep it cheap”. 

Being an older, machine I had a number of problems to overcome. Firstly I could not change the selling price of one dollar per can; also the machine was rusty and looked terrible. The first solution was to keep drinks at the one dollar price, as per the previous owner's advice (I didn't want to get rich quick running the machine as a joke). I found that could still remain in the green if I bought Coke on special from the supermarket for 70 cents per can. The second problem took a trip to the hardware store and some printable sticker paper. I painted the machine earth green and gave it fresh new decals to catch the eye of potential customers. The next question was how I was to put the machine in the place I had chosen (a unit building nearby – where I knew the owner but did not let him know initially) without looking suspicious. This time around I made a trip to the mall and came home with a Fluoro T-shirt and Coke baseball cap, which with some khaki shorts and work boots were the perfect disguise.

With everything ready, I loaded the machine and first supply of coke into the back of my car and drove to my friend’s unit complex at 9:30am. I chose this time because I figured that most office workers would have left at this stage, and most of the students in the building would still be sleeping. I picked correctly and easily pushed the machine into place without being disturbed. It wasn't long before the machine was loaded and humming away ready to deliver refreshingly tasty Coke. During the initial configuration I thought at a combination of traditional Coke, Coke Zero and Diet Coke would be an appropriate mix and so that's how the machine was loaded. I left shortly after and returned home.

One of the most difficult things to do when you're placing a vending machine is estimating both stock and turn around without testing the site. This was doubly difficult as the supermarkets usually only lower the price of coke to 70 cents per can once every month. The estimate that I made for the stock was actually pretty good, and I found that I purchased enough to last for the first two months making my restocking wait much easier than if I had understocked. To manage the restocking process I actually visited the site every morning in my Fluoro shirt and work disguise. I found through this process of trial and error, that on average I could restock weekly and keep the machine full. Though, it wasn't a complete restock. Very soon I discovered the fact that I believe most vending machine owners find. That is, regular Coke outsells everything else in the machine that you stock at a rate of approximately 10 to 1 (well that was in this particular case, the figure given to me by the machine's previous owner was nearly 5 to 1 when there is a wider choice). I also found that when given the option of Coke Zero, that Diet Coke does not sell. With this piece of knowledge, I changed my selling strategy and lined up two rows of traditional Coke and one row of Coke Zero. I found this not only better balanced the machine sales, but it also meant I only needed to refill fortnightly.

And so I continued to refill and fill the machine every two weeks, and as predicted no-one seemed to ask questions. It was only about 3 months in that I finally found a note left by my friend on the machine asking for the machine owner to call him. The following day I made the phone call and explained what had happened and thankfully caught his good spirits, though afterwards he explained he had considered drilling the locks to clear and then and sell the machine because I had left it on his property. He gave me permission to continue to run the machine where it was as it made his tenants happy and he considered it a funny story that he could impart to his own friends. I did continue to keep the machine operational for a period, even though it was not particularly profitable when time and effort was factored in, and eventually sold it and the story on to another student.

Before I end this entry, I would like to return to the disclaimer at the top of the blog. I would encourage any students to think about engaging in business opportunities like this; however, I would also encourage you to ask permission before engaging in business on other people’s property. I was extremely fortunate to have a friend who was good humoured enough to see the funny side of my activities; I do not believe that all individuals and or businesses would appreciate this type of activity conducted on their property or place of business.


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