Inventory Management Best Practices for Vending Operators

Poor inventory management is a silent profit killer. Products expire on the shelf. Popular items sell out while slow movers collect dust. You show up to service a machine with the wrong products in your truck.

Good inventory management isn't complicated, but it requires discipline and the right systems. Here's how to get it right.

The FIFO Rule: First In, First Out

This is inventory management 101, but I'm amazed how many operators ignore it. When you restock a machine, don't just throw new products in front. Move older products to the front and put fresh stock behind them.

Why it matters: A bag of chips that expires next week should sell before the one that expires in three months. FIFO prevents spoilage and keeps your products fresh.

Make it a habit. Every single time you restock, rotate. It takes an extra 30 seconds per machine and saves you money every month.

Track Expiration Dates

Know what's in your machines and when it expires. This seems obvious, but most operators don't actually track this—they just hope for the best.

• Check dates when you buy. Don't accept short-dated products from suppliers.
• Note expiration dates when stocking. Log them in your tracking system.
• Pull products before they expire. A stale product damages your reputation more than the cost of pulling it.

Par Levels: Know Your Numbers

A "par level" is the minimum quantity you want of each product before restocking. Setting par levels prevents both stockouts and overstocking.

How to set par levels:

1. Track sales for 2-4 weeks per machine
2. Calculate average weekly sales per product
3. Set par level at 1.5x weekly sales (gives you buffer)
4. Adjust based on service frequency

Example: If a machine sells 10 Snickers bars per week and you service weekly, set your par level at 15. When you see 5 or fewer, you know to bring more.

The 80/20 Rule of Product Mix

In most machines, 20% of your products generate 80% of your sales. Identify your top performers and make sure they never run out.

• Track sales by product. Know your top 5 sellers in each machine.
• Allocate more space to winners. Give popular items 2-3 slots instead of 1.
• Cut the losers. If something hasn't sold in 3 weeks, replace it.
• Test new products in small quantities. Don't fill a whole row with something unproven.

Location-Specific Stocking

Different locations have different preferences. A gym wants protein bars and water. An office wants chips and candy. A factory wants energy drinks and hearty snacks.

Don't use a one-size-fits-all approach. Customize your product mix for each location based on:

• Demographics (age, gender, occupation)
• Time of day (morning vs. afternoon traffic)
• Season (cold drinks in summer, hot options in winter if available)
• Feedback from location contacts

Warehouse Organization

Your garage or warehouse is part of your inventory system. If it's a mess, you'll waste time finding products and make mistakes loading your truck.

• Organize by category. Drinks in one area, snacks in another, candy separate.
• Use shelving. Products on the floor get damaged and are hard to access.
• Label everything. Know what's where at a glance.
• FIFO in storage too. New deliveries go behind existing stock.
• Keep it clean. Pests love snack storage. Don't give them a home.

Buying Smart

Where and how you buy inventory affects your margins significantly.

• Buy in bulk when possible. Costco, Sam's Club, or wholesale distributors offer better prices.
• Compare suppliers. Prices vary. Shop around quarterly.
• Watch for sales. Stock up on non-perishables when prices drop.
• Don't overbuy perishables. A "deal" isn't a deal if half of it expires.
• Track your cost per unit. Know exactly what you're paying for each product.

Handling Spoilage

Some spoilage is inevitable. The goal is to minimize it and learn from it.

1. Track every expired product. Log what expired, which machine, and why.
2. Identify patterns. Is the same product always expiring? Is one machine consistently problematic?
3. Adjust accordingly. Reduce quantities of slow movers. Service slow machines less frequently but check dates more carefully.
4. Set a spoilage budget. Aim for under 2% of inventory cost. If you're higher, something's wrong.

Technology Makes It Easier

Spreadsheets work, but they're tedious and error-prone. Modern inventory tracking tools let you:

• See inventory levels across all machines at a glance
• Get alerts when products are running low
• Track sales velocity to optimize par levels
• Generate shopping lists based on what you need
• Analyze which products perform best where

The time saved pays for itself quickly—and the insights help you make better decisions.

Quick Checklist

• ☐ Practice FIFO at every restock
• ☐ Check and log expiration dates
• ☐ Set par levels for each product
• ☐ Identify and prioritize top sellers
• ☐ Customize product mix by location
• ☐ Keep warehouse organized
• ☐ Track spoilage and adjust
• ☐ Use technology to automate tracking

Final Thoughts

Good inventory management isn't glamorous, but it directly impacts your bottom line. Every expired product is lost profit. Every stockout is a missed sale. Every wrong product in your truck is wasted time.

Build the habits, use the right tools, and watch your margins improve.