Vending Offers Good Income for Part-time Operator

How does a startup with limited capital win a "plum" account in a major metropolitan area from a big regional operator?

In the case of "Scott" Spector, it was research, due diligence, creating a strong support network, learning from his equipment supplier, and working diligently to service the account.

Spector, 47, who operates Horizon Distributing in Carlsbad, Calif., has managed to develop a solid supplemental income with five accounts that he is able to service single handedly. The business helps provide a comfortable living for him, his wife and 6-year-old son.

Spector became acquainted with automatic merchandising in his previous business, a pizza restaurant that he operated with his wife in the San Francisco area. The restaurant seated 200 patrons and offered delivery service, catering, take out, pool tables, juke boxes, video games, sports programs, a photo booth and an espresso cart.

"It was a very intense business," said Spector, who managed 17 employees in this restaurant, which was open seven days a week. He found it very difficult to find good employees to keep the business staffed properly.

Search for opportunity leads to vending
Spector sold the business when he decided to relocate to San Diego 10 years ago to care for his father. He purchased some rental property and began investigating other business opportunities, including vending, for supplemental income.

He wanted a business that offered flexibility. He also wanted a turnkey business; one that he could sell quickly if he wanted to.

From his restaurant experience, Spector saw advantages in operating vending machines. "It was something I always wanted to do," he said.

"Machines always seemed a lot better than employees."

Investigating classified ads, he realized the 800 phone number ads were not promising. "A vending ad with an 800 number is probably an unreliable company," he said.

Perfect Break Systems offers an opportunity
There was one ad that offered locations with equipment by the local Perfect Break Systems distributor. Perfect Break Systems is affiliated with the Wittern Group, the Des Moines, Ia., vending equipment manufacturer. "He was local and I could look at the locations before I bought them," Spector said. He researched the Wittern Group. "I was comfortable with them," he said.

The first location the rep showed him was a landscaping company that wanted a coffee machine. Spector didn't feel comfortable starting out with such a one-dimensional machine, so he passed on the location.

The next location was a loan processing center with 300 employees that wanted a soda and snack machine. Both machines accept 5-dollar bills.

The location, with the equipment installed and some training, required $11,000. "I figured it was worth the risk and the investment," Spector said.

Support from a fellow operator
The installation and training were provided by another vending operator, James Meidinger. Spector has developed a good relationship with Meidinger, the certified Perfect Break Systems installer for the area.

Meidinger had gotten into the business himself several years earlier after working for a crane vending machine manufacturer.

Meidinger operates 93 machines in the San Diego area under the name Millennium Vending. "I try to give him (Spector) as much information as I can," Meidinger said.

Meidinger said he is glad to share his experience with other operators since the system has been helpful to him.

Spector has been able to learn how to troubleshoot the machines fairly easily.

"If you know how to change a memory board in a computer, it's pretty simple," said Spector, who was already familiar with amusement machines from his restaurant business. "You don't really need much experience," Spector said.

"Their (Perfect Break Systems) support program is above average," he added. "They can walk you through most (mechanical issues) over the phone."

Equipment distributor helps
Meidinger told Spector where to buy product and what products to buy. He directed him to Sam's Club initially.