Vending machine

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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".

1 Introduction
2 Japanese vending machines
3 Automatiek
4 History
5 A vending machine business
6 Safety
7 Malfunctions
8 Innovations
9 Manufacturers and Distributors
10 See also
11 External links
12 References

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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.

Oddly, during the 1950s, life insurance policies were sold through vending machines at airports, but this practice disappeared due to the tendency of American courts to strictly construe such policies against their sellers [1].

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.

Image:TokyoCigaretteVendingMachine.jpg

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Japanese vending machines

In Japan, with a high population density, limited space, a preference for shopping on foot or by bicycle, 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 liquor, cans of beer, and potted plants. Japan has the highest number of vending machines per capita, with about one machine for every 23 people.

The first vending machine in Japan was made of wood and sold postage stamps and post cards. In 1967, the 100-yen note was distributed for the first time, and vending machine sales skyrocketed overnight, selling a vast variety of items everywhere.

In Japan, vending machines are known as jidohanbaiki (from jido, or “automatic”; hanbai, or “vending,”; and ki, or “machine.” The type of article sold from the machine is used as an adjective to further define or describe a particular vending machine, a cigarette vending machine being identified as a “tabaco no jido-hanbaiki.”

In 1999, the estimated 5.6 million coin- and card-operated operated Japanese vending machines generated $53.28 billion in sales. Besides the items mentioned previously, Japanese vending machines sell or have sold in the past:

Live lobsters
Refrigerated food storage lockers
Farm-fresh eggs
Rice
Rice cleaning service
Photograph printing service (accepts data from smart media, memory sticks, compact flashes, zip drives, compact discs, floppy discs, and other input media)
Mobile telephone recharging service (the user locks his or her plugged telephone in place to charge while he or she shops)
Mobile telephone photograph printing service
Fishing line, hooks, and bait
Toilet paper
Pachinko (gambling) balls redeemable for prizes or money
Metered parking
Mechanized parking
Frequent flier miles tabulation and credit
Recycling service
Blood type-based condoms
Used panties
Farm-fresh vegetables
Pay-per-view television cards
Rhinoceros beetles (sold as children’s pets)
Kerosene
Dry ice
Beef
Blood pressure measurement service
Pearl jewelry
Water from hot springs

In Japan, vending machine goods and services cost as little as 80 and as much as 3,000 yen.

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Automatiek

Image:Febo.jpg A common type of snack bar in the Netherlands is called automatiek and is similar to an automat. It has a wall lined with coin-operated machines. Each has a vertical row of little windows, with a (usually hot) snack behind each, e.g. a croquette, a frikadel or a hamburger. After inserting a coin in a slot, you can open one of the windows and take your snack. The machine is heated so that the snacks stay hot. Behind the machine is the kitchen where the snacks are prepared, the little windows being re-supplied from the back.

In addition there is a counter for snacks less suitable for vending in this way, in particular French fries.

Automatieks may or may not provide chairs for customers. Sometimes the vending machines are in an outside wall, and no shelter is provided.

Automatieks are often located at railway stations, or in busy shopping streets. One large chain of these automatieks is FEBO (see the picture on the right).

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History

There is a legend that the first vending machine dates to 215 B.C. in Alexandria, where the ancient Greek mathematician Hero devised a machine to dispense holy water to worshippers for ritual cleansing when they deposited a coin. When a coin was deposited, it fell upon a pan attached to a lever. The lever opened up a valve which let some water flow out. The pan continued to tilt with the weight of the coin until it fell off, at which point a counter-weight would snap the lever back up and turn off the valve.

Despite this early precedent, vending machines had to wait for the Industrial Age before they came to prominence. The first modern coin-operating devices were vending machines that dispensed post cards introduced into London, England in the early 1880s. The idea was exported to the U.S. and by 1888 the Thomas Adams Gum Company introduced the first gumball vending machine. The idea of adding simple games to these machines as a further incentive to entice people to buy came in 1897 when the Pulver Manufacturing Company added small figures which would move around whenever somebody bought some gum from their machines. This simple idea spawned a whole new type of mechanical device known as the "trade stimulators", and the birth of pinball is ultimately rooted in these early devices.

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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 soft drink/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 – . . . 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).

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Bulk candy and gumball vending

Main article: Bulk vending

Bulk candy machines are entirely 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 coins. The gross margins in the bulk candy business can be quite high — 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 soft drink 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 soft drink/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 soft drink and snack machines.

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Full line vending

Main article: Full line vending

Full line vending machines are soft drink and snack machines that sell cans or bottles of soft drinks and/or small packages of snacks. For operators, soft drink/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.

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Specialized Vending

One of the more controversial types of vending machines 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 most commonly used for the sale of condoms, though in some locations they may be found dispensing cologne or even medicine. These are often found at toilets used by transient persons in high traffic locations, such as bus stations, malls, airports and truck stops.

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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 soft drinks 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 soft drink machine can weigh in excess of 1000 pounds.

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Malfunctions

Many machines fail because they are not supplied the proper power or are on the same circuit with other machines. Many of the problems found by service people are found to be vandalism and not fault of the machine at all. Many problems come from operators not taking the time to load the machines properly and being in a hurry to collect their money and run, not taking the time to do service to the machine. The actual causes of vending machine malfunction are usually many-fold. Coin acceptors often jam up, especially if a bill or other foreign object is inserted 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 users can call to report malfunctions or request assistance.

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.

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Innovations

Vending has gone through significant changes over the decades. Many machines are still evolving to take credit cards and monitor machines from afar. Many vending machines can be found that are made overseas and now parts are hard to get as they were imported and did not last.

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 patron’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[2].

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 ‘use exact change only’ 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[3].

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