Startup#3 Vending Machines at Indian Public Banks

1. Idea

Several leading public sector banks will soon be pressurized by RBI to improve their loan books regarding their Non-Performing Assets.   They will welcome trustworthy business partners who can leverage their distribution network for the sale of products and services to consumers in and around their retail locations (called local Branches in India), provided these offerings resonate well with their brand.  An entrepreneur can offer vending machines at these branches that make the bank branch look innovative and future-oriented.

2. Revenue Model

The bank would expect to be compensated for the use of its premises, electricity, desk-space and office for person etc.  The startup can also offer to pay a rent and a fee for utilities to cover the cost and keep the variable sales to itself.  The bank may insist for a Revenue share which is usually a percentage of selling price. The commission could be a fixed percentage or based on the volume of goods sold (Slab-wise commission, with higher commission for higher sales).    Startups can negotiate back asking for a Minimum Guarantee clause after initial testing period is complete.

3. Challenges

Products and Services (“Goods”) have to resonate well with the Bank’s brand and management who tend to be very conservative.   Banks – worldover – are conservative and very sensitive to their image, so this would limit what can be displayed in their premises.

4. State of Art – Let us look at a Vending machine

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