Stop Trying to Sell Vending Machines to Your Customers - Modern Distribution Management

Log In

Stop Trying to Sell Vending Machines to Your Customers

Vending machines should be free to customers as a value-added service.

Industrial vending machines and the inventory control software that makes them so valuable to both distributors and end-users are becoming big business. And demand for them continues to grow, with a quarter of end-user companies in a recent Peerless Research Group survey already using vending for MRO consumables and another 38 percent saying they plan to explore the use of vending machines within the next two years. The market is expected to reach $1.4 billion by 2025, according to Grand View Research.

We’ve spoken with a growing number of distributors who are interested in buying vending machines and selling them at a markup to their customers. In most cases, we’ve found that this model doesn’t work. We believe distributors should be placing the vending machines for free as a value-added service. Here’s why:

The competition is giving the machines away for free

The challenge with trying to mark up and sell vending machines to customers is that there are plenty of distributors out there – including the largest, Fastenal – willing to place machines with customers for free. So, in most cases, customers won’t want to pay for them as a capital expense. Put yourself in their shoes: Your customers would rather spend that money on payroll and equipment that directly contribute to producing more, so that they can sell more.

Placing the machine for free makes it less about the machine, and more about the service

In our experience, distributors that approach vending as a service instead of a product see greater success. When you place a vending machine on a customer’s plant floor, and (this is key) ensure that your customer has access to mission-critical items onsite, 24/7, the customer has little reason to switch to another supplier. The service you are providing them is invaluable. In fact, you may be surprised at how much additional spend customers are willing to give you in exchange for the vending machine and VMI capabilities. One of our distributor customers, for example, was surprised to see a sales increase of more than 40 percent with one customer after placing a vending machine. As long as your product price is competitive, the benefits of vending to the end-user will outweigh price as the driving factor in your relationship with them. 

Selling the machine could result in less profit, not more

When you sell a vending machine, you reap a one-time profit. It’s time to think differently about the machines. Stop viewing them as a product to be sold and start viewing them as sales tools. Yes, even for lower-cost items like safety gloves (a popular vending machine product), vending can be profitable for distributors. In fact, it’s no longer true that industrial vending machines only make sense for large facilities with high volume and high-margin products. The cost of vending machines and inventory management technology is falling, giving distributors an opportunity to streamline and optimize inventory management for customers of all sizes for both high- and low-margin product categories. (Also, because of the Tax Cuts and Jobs Act passed earlier this year, distributors can write off up to 100 percent of the cost of the vending machines, reducing their taxable income and offsetting some of the cost.)

End-users can see inventory reductions of up to 30 percent, and distributors can save on the labor that was previously required for in-person inventory counts and quote generation. That time can now be better spent actually selling, which we would argue is a better use of your valuable field sales reps’ time anyway.

With the recent news that Amazon Business will hit $10 billion this year in sales, 10 times its sales of just two years ago, distributors need to take a proactive stance to maintain their competitive advantage. You will continue to see growing pricing transparency and product commoditization, resulting in a price-obsessed customer base that puts you in the unfortunate position of having to choose between revenue leakage and price-driven margin pressure. Rather than engage in the ongoing race to the bottom, offer customers something else that they truly value. Inventory control (not the machines) can be that thing. Resist the temptation to sell machines outright; the value of vending machines goes far beyond the equipment itself.

Mark Hill has 40 years' experience in industrial distribution and vending. He is the president of IMC Supply in Memphis, TN, and the founder of vending machine supply company 1sourcevend. Learn more at Contact him at


Share this article

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

Get the MDM Update Newsletter

Wholesale distribution news and trends delivered right to your inbox.

Sign-up for our free newsletter and get:

  • Up-to-date news in a quick-to-read format
  • Free access to webcasts, podcasts and live events
  • Exclusive whitepapers, research and reports
  • And more!


articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events



You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.

Register for full access

By providing your email, you agree to receive announcements from us and our partners for our newsletter, events, surveys, and partner resources per MDM Terms & Conditions. You can withdraw consent at any time.

Learn More about Custom Reports

Request a Market Prospector Demo

  • This field is for validation purposes and should be left unchanged.