A mainstay of shops and businesses where kids gather in droves, toy vending machines have traditionally been used to sell small, encapsulated toys at inexpensive prices. However, improvements in the lightweight alloys and plastics used to manufacture vending machines, as well as advancements in the technology that powers vending machine payment systems, have allowed both manufacturers and vendors to get more creative. Today, toy vending machines are more versatile, with the ability to offer branded toys, must-have action figures, plush stuffed animals and much more.

Traditional toy vending machines are coin-operated, but nowadays they can also be configured to accept bills of varying denominations and, in cases where the machine’s application makes it feasible, credit or debit cards. While card payments are usually reserved for toy vending machines selling more expensive items, units with bill verification sensors that make change for customers have become the industry standard. Though the old-school machines which require exact change and vend out of a single coin-activated chamber are still around, they’re rapidly being replaced by newer models driven by more advanced technology.

How to Profit from Toy Vending Machines

The first, most basic and most important principle in choosing a location for your toy vending machine is to put it in a location where large numbers of children converge. Recreation centers, game parlors, bowling alleys, malls and child-themed eateries (like Chuck E. Cheese, for example) are all tried-and-true venues. However, creative thinking can also lead to untapped markets. Lobbies of popular family restaurants, where customers face wait times for tables during peak hours, can be a good spot to locate simpler toy vending machines. Anywhere parents might be stuck waiting with impatient children is a good place to consider; parents who want to keep their kids entertained, quiet and happy are more than willing to buy toys from vending machines to do it.

Another method vendors use to increase revenues at toy vending machines is to install token-operated models. Toy vending machine tokens can be purchased from machine manufacturers, and sold at a rate that adds up to be higher than a coin-operated vending machine would charge for the same toy. For example, a toy that would cost a quarter in a traditional vending machine could be sold for a token in a token-operated model, significantly increasing revenues if tokens are sold for, say, two for a dollar.

What to Sell in Toy Vending Machines

Generic toys specifically manufactured for sale in vending machines are readily available, and they are usually very inexpensive when purchased in bulk quantities. Costs per unit for capsule vending machine toys are normally only a few cents, and can sell for anywhere from a quarter to a dollar. However, the future of the toy vending machine industry lies in selling brand-name, popular toys through high-tech machines.

Children want items on impulse, and parents indulge them; to serve the changing needs of toy vending machine operators better, manufacturers have developed models that dispense packaged toys. Now, items that were once only available in toy departments can be sold virtually anywhere kids go, in vending machines that accept bills of varying denominations as well as electronic payments. The bottom line for vending machine operators is opportunity: with creative thinking and wise machine placement, excellent profits can be achieved and sustained.

Having taken the European and Japanese DVD rental markets by storm, DVD vending machines that both sell and rent fast-moving motion picture releases are being touted as the wave of the future. Given that 90 percent of DVD sales and rentals are generated from new releases, DVD vending machines present entrepreneurs with an opportunity to cash in on the $8 billion a year DVD rental industry without worrying about the overhead costs associated with opening a video store. You don’t have to rent space, pay employees or meet expensive operating costs; all the owners of a DVD vending machine needs to do is ensure that the products their customers want are readily available.

How DVD Vending Machines Work

Typically, DVD rental vending machines are linked to the Internet, and customers register for an account by accessing your website. After entering and verifying customer information, including name, date of birth, address and a credit card number, customers can browse a selection of DVDs and reserve titles for pickup at the nearest vending machine location. A customer’s order is then processed and verified using the client’s credit card, which is entered into the machine to complete payment. Normally, customers agree to a set of terms and conditions that permits the vendor to charge the customer’s credit card the full value of the DVD should the customer fail to return it.

While they are just beginning to catch on in the United States, DVD rental vending machines offer a significant market advantage over traditional video rental stores simply because they can offer rentals at much lower rates. Since the overhead and maintenance costs associated with managing a DVD vending machine are very small, proprietors can pass the savings on to their customers. In Europe and some parts of Asia, DVD rental machines have become so popular that finding a traditional video rental store has now become all but impossible.

Vending machines can also offer DVDs for outright sale to customers. Often these are used discs, sold at reduced prices. These single-sale machines typically require a little more upkeep, since merchandise that’s sold needs to be replaced, unlike a DVD rental kiosk which constantly recycles the same merchandise. Customers have the choice to pay with cash or credit cards, and enjoy the convenience and low prices a vending machine can offer.

Get the Most Out of a DVD Vending Machine

Regardless of whether your machine rents or sells DVDs, it’s essential to stay current by offering the latest and most popular new releases. While one or two slots might be given over to classic films and popular titles from yesteryear, the lion’s share of DVD vending machine income is earned from the movies of here and now.

While they’re currently limited to placement in fast food restaurants and convenience store chains, DVD rental machines are poised to make a big splash in supermarkets, strip malls and shopping centers around the country. With limitless profit potential, entrepreneurs seeking the hot-ticket vending machine items of tomorrow would be wise to investigate the DVD market further.

In response to customer demand for vending machines that don’t require the hassle of exact change, manufacturers are focusing their development efforts on creating units that accept credit and debit card payments. More and more, vending machine owners are preferring to purchase models that allow for credit card use. Statistics show that the average amount of money a customer spends in a cash-only vending machine is $1.06. However, when credit cards are accepted, people spend an average of $1.87. That represents a 63 percent spike in sales. Studies also show that customers are much more likely to purchase multiple items from a vending machine that allows credit card payment.

Why? The simple answer is convenience. One of the factors that led to a decline in the vending machine industry was the inconvenience of requiring exact change. Fishing for exact change is cumbersome and annoying for customers who find they don’t have the correct amount on hand. The introduction of bank-note-reading technology improved matters, but still left customers with their hands full of change after making purchases with a larger-denomination notes (such as $10 and $20 bills). Most vending machines that offer to make change for customers provide just that–mounds of coins. While such machines can drum up additional sales in customers who purchase more items to reduce the number of coins they receive for change, equal numbers simply choose to buy nothing at all.

Credit Card Vending Machines Offer Maximum Purchasing Convenience

Market research indicates that customers actually prefer to make vending machine purchases with credit cards. People are approximately 45 percent more likely to make a vending machine purchase if the machine accepts plastic payments. These machines not only encourage spending (because the customer doesn’t have to part with actual cash), but vendors can also charge premium rates for goods when credit card sales are offered. For example, a soft drink that would normally retail for $1.25 in a cash-only vending machine can fetch as much as $2 from a credit card vending machine. The electronic technology that powers credit card vending machines allows operators to customize pricing, which is usually adjusted upwards to reflect the slightly increased costs associated with accepting payments. These additional costs, levied by the financial institutions that issue credit and debit cards, are more than recovered by the premiums vendors can place on the items they sell.

Credit card vending machines also permit owners to track sales information in ways that were not possible prior to the advent of electronic technology. Because sales are processed using a centralized data system such as a local area network (LAN), information such as sale dates, times, items purchased and total expenditure are recorded. Proprietors can then review this information to learn which items are hot sellers, what times of day yield the most sales and how much the average customer is spending. Credit card vending machines provide proprietors with advanced business management tools, allowing them to tweak their operations to maximize profit potential and focus their efforts on providing the items their customers purchase most often.