MEGA Holding

The vending business, just like any other kind of business, is an entrepreneurial activity aiming for a continuous flow of income. The essence of the vending business is the modern small retail trade.
The experience and the history of the development of the vending business abroad demonstrates that the founders of this business, targeting the vending market, not only gain great income, but also create enormous networks that engage in the sale of a variety of products.

The executive director of the AzVen Company, Joshqun Jabrayilov, talks about the vending business, its advantages and its prospects in Azerbaijan.

-How long has the AzVen Company been functioning and what is its main activity?
-The AzVen Company was established in 2006 and actually founded the vending business in Azerbaijan. Our company is the official distributor in Azerbaijan for the Spanish company Azkoyen, which is the leading producer of vending machines in the world market. We offer our customers hot and cold drinks, different products packed in portions and various kinds of cigarette vending machines, as well as coffee machines.
The main activities of the AzVen Company are in the sale of vending machines, the free installation and service of coffee equipment and vending machines, direct delivery of ingredients for the machines, the provision of training for customers in the basics of the vending business, technical servicing of vending machines (vendors), in short the development of the vending business in Azerbaijan.

-Could you tell us more about the vending business, its benefits, its principles and general rules?
-Vending is a type of trade using vending machines. Even our great ancestors were inspired by the idea of automated sales in ancient times. There were even primitive vending machines in Ancient Egypt. The Alexandrian mathematician Heron sketched a vending machine in 215BC and noted that it was used to deliver holy water to the devout in temples and the sales-purchase process was completed by inserting money into the machine.

Vending is a very profitable business because it requires minimum expense and the machines can easily be delivered to any location. They are very popular in the developed countries of Europe, Asia and North America. This modern form of business has finally reached our country, which has moved onto another stage of development.
Vending has many advantages. In the first place, this business is very easy to set up. All you have to do is purchase a vending machine, find an appropriate place to install it, fill it with the necessary ingredients and collect the income. And there it is, you have your own business! In the second place, anyone can start a vending business, even with minimal capital. If the vendor is in a good location, then you can gain a net income of up to 300%! Thirdly, vending can also be a supplementary business - you can easily service it yourself without extra help. Moreover, you can do it any time you want (for example, after your main job).
One machine can bring in income from 500 to 1000 Euro. Further, you should not forget that the machines can be networked. It is an easy calculation. Look how profitable it will be if you have 10, 50, or 100 machines! There are companies in Europe for example, which exploit about 50,000 machines.
Vending is also a stable business. The machine works 24 hours a day, so it brings in a stable daily income. The more machines you have, the more profitable the business becomes. Another advantage is that you can collect the income immediately, without delay.
The vending business involves minimum risk. Even if you have placed the machine in a bad spot, you can always change the location to a better one.
Another advantage is that there is a rich variety of vending products and they take up minimum space. These are perfect conditions for food products. They work night and day and are very durable and reliable in use. You can install such a machine in any space of just 1 square metre. Above all, the attractive modern appearance and design of the machines attract people's attention and the space surrounding them is also very attractive to potential customers who might want to place their advertisement there. This could turn into another source of income.
We should note that vending is a new business for Azerbaijan. That is why people who have recently started in this business still have plenty of time and opportunity.

-What are the main trends in the vending business?
-As a rule, this business starts with coffee machines, because they are the most profitable of all the machines. This business involves not only selling, but also making the coffee. The income from these machines is maximal. The mark up can be as much as 100-200%. This is why hot drinks machines are especially popular.
Private companies usually start with the most profitable products; often, these are sales of snacks and hot drinks. Once the most profitable spots are taken, it will be difficult to develop the business through new spots - the best ones will be already taken. Thus companies will develop, becoming "deeper", rather than "wider". A snacks machine will be placed near the coffee machine. We should note that if the new machine is placed near an active coffee machine, no extra expense will be incurred. You could use the same spare parts; the calculations will be identical etc. Then you could place a third machine near those two, for example a machine for cold drinks or telephone cards. Eventually you will have created a chain of machines.
This is the most practical development strategy for a vending business.
In terms of their construction, these machines can be divided into automated models (table and self-standing) and mechanical models. The most popular models are the self-standing ones. These are also divided into machines just for ready products (cold drinks in bottles and cans, products in small packs - chocolate, chips, cigarettes, gum etc.) and those which make and sell hot drinks (espresso, tea, cappuccino, hot chocolate, coffee with milk etc.).

We should mention especially the Veneto model of hot drinks machine offered by the AzVen Company. This machine is for those who appreciate real coffee. The process of making espresso in the machine is identical to that of classical technology. The machine is supplied with a coffee-grinder and the coffee beans are ground by a special method while preparing the drink. A model for cold drinks was made in 2006. So, now, we don't just offer aromatic coffee and other hot drinks, but also cold milk shakes, ice tea etc. The Veneto model has a number of advantages - a self-diagnostic and self-cleaning function (programmed with a timer), an on/off timer, a programmed list of alternative prices, changeable front panels, programming free bonuses etc.
At the same time, this machine allows us to transfer complete statistical information, including the name and number of portions sold, the banknotes received and money returned, to laptops, portable printers, or electronic keys.

-Where are the machines usually placed?
- These machines can be placed anywhere. Their small size allows us to do so. One should think of the vendor as a mini-shop and take into account the rules of effective business. You need to be very careful when choosing a location, because the income you receive depends directly on location. The careful choice of location plays an important role in determining the range of sales.

A perfect place for vendors would be a large hall or offices with a constant stream of customers. Consumption will always increase in such places. It is not impossible that some might pass by the machine ten times and not buy anything, but they will see how others drink their coffee with great pleasure. After a certain time, they will also want to taste the drink. And after a little more time they will swell the numbers of "regular consumers".
Another suitable place for these machines is an airport. Bus stations, railway stations, generally all the places where people wait, as well as elite hospitals, trade and tourist centres, are very suitable for machines. We should also not forget universities and schools.

-What conditions do you offer potential purchasers?
-We offer very reasonable prices for those who place large orders. We have special terms for our regular costumers. We are planning to start leasing very soon. Then, anyone will be able to purchase a machine by prepaying just 30% percent of the price. In addition, any equipment issued by AzVen is given a year's guarantee. The AzVen Company will solve any technical problem free of charge during this period.
The qualifications of our technical personnel, who have been trained in the production plant in Spain, are confirmed by the official certificates of the manufacturer. We also have all the facilities necessary to service the machines once the guarantee period is over.

-What is your prognosis for the development of the vending business in Azerbaijan?
-The turnover of the global vending business is currently counted in billions. The machine networks between countries can involve hundreds of thousands of machines. For example there is one machine per 20-40 people in Japan, South Korea and a number of European countries. Japan is the world leader in the vending business. There are 7.5 million machines for a population of over 125 million. For comparison I would say that there are 4.1 million machines in Europe. But this market is just establishing itself in Azerbaijan. Considering the specific character of the local market, as well as looking at global experience and that of Russia, which is closer to us, we can estimate that the potential number of vending machines in Baku alone is 15 thousand.
Considering the rate of economic development in the country, we can be sure that the vending business will become massively popular. The business has already proved itself globally, so the potential for development is undeniable.

You can find a vending machine on every step in even the smallest cities and villages in Japan -on railway platforms, near shops, on streets. And those machines are not protected at all. The most frenzied period of production and proliferation of the machines was during the Olympic Games in Tokyo in 1964. They had the problem of providing throngs of people with the widest range of products and services in a limited area and using minimum personnel. The problem was solved. As a result there are more than 7 million vending machines in Japan.

Kamala Rahimova
"Azerbaijan Business"