You can sell almost anything in a vending machine — coffee, cupcakes, clothing, pizza, and so much more. Starting a vending machine business is straightforward. If you optimize your location and product for your chosen market, reinvest your profits wisely, and make use of the right financing opportunities when starting or expanding your business, you have an excellent chance of success.
Seven million — that’s how many vending machines experts estimate are operating in the United States right now. That’s enough to put about 355 vending machines in every city in America. If that’s not proof of concept, I don’t know what is. Yet there’s still room for more vending machines. As many locations phase out junk food vending machines, novelty and healthy vending machines are becoming more popular. Starting a vending machine business can be a great idea. In this article, you’ll learn everything you need to know to start a vending machine business. So keep reading.
Is vending right for you?
Owning a vending machine business isn’t for everyone, but it could be perfect for you. After investing a little time and money upfront, your vending machine business can provide time, freedom, and satisfaction that you can’t get from working for someone else.
Before starting any business, you should ask yourself “why?” What influence do you want to have on the world, what kind of lifestyle do you want, and how can starting a vending machine business help you achieve these goals?
Qualities of successful vending machine business owners
Many entrepreneurs get started in the vending machine business as a side gig in addition to their day jobs. If they get enough momentum, they can take it full time.
Depending on how many machines you own and what systems you have in place, a vending machine business may not require much time and energy from you. For that reason, it could be a great investment for busy entrepreneurs and people wanting passive income. Keep in mind that starting a vending machine company requires the hard work of learning the business at the beginning.
Do you have what it takes to succeed?
Here are some qualities that successful vending machine business owners share:
- They are excited about learning by doing.
- They love providing quality customer service.
- They are passionate about optimizing their business.
- They are always seeking new opportunities.
- They want to be their own boss.
- They want their money to work for them.
- They want to have a positive influence on their community.
- They want time freedom.
A day in the life of a vending machine business owner
Every day can look different for vending machine operators. It depends on the size of the business and what percentage of the business the owner operates without any help.
How you might spend your typical day
A typical day in the life of owning a vending machine business might look something like this:
- Check inventory reports and determine the products that need to be restocked. Load the correct quantity of products into your vehicle.
- Set out to visit each vending machine and restock where needed.
- Service the vending machines.
- Empty the cash box.
- Refill the coin mechanism with dimes, nickels, quarters, and dollar coins.
- Restock all products in the machine where needed.
- Wipe down the glass on the front of the machine.
- Interact and connect with some customers.
- Repeat for all locations.
- Head back to your home office and work on reordering products, accounting, location scouting, inventory management, and other administrative tasks.
You can hire someone else to do much of this if you want, but you should start out doing it all yourself to understand the ins and outs of the business. You’ll also have to build enough capital and income to be able to hire help.
How much does it cost to start a vending machine business?
Starting a vending machine business is surprisingly inexpensive relative to starting other types of businesses. For ease of illustration, let’s say you’re just getting started with a single machine.
The main costs include purchasing, stocking, restocking, and maintaining your vending machine. Buying the vending machine itself is typically the costliest part of starting a vending machine business. Once you get that up and running, you’ll just have to restock it and keep it in good condition.
Let’s look at what these costs might amount to. Costs depend greatly on what type of vending machine and product you choose.
Startup costs of a vending machine business
Here are typical ranges of the initial costs of getting one vending machine up and running:
|Vending machine:||$1,200 to $10,000|
|Product:||$100 to $800|
|Labor:||$0 to $1,000|
|Business expenses:||$100 to $1,000|
Recurring costs of a vending machine business
Here are typical ranges of monthly ongoing costs of running one vending machine:
|Restocking:||$100 to $500|
|Maintenance:||$100 to $2,000|
|Labor:||$0 to $1,000|
|Commissions:||15–30% of gross vending machine sales|
|Business expenses:||$250 to $750|
Keep in mind that these ranges are estimates. Every vending machine business requires a different amount of capital based on its location and operations. Speak with your accountant for financial planning help specific to your situation.
Financing a vending machine business
You’ll need to decide where you are going to source the money to start your vending machine business. Capital could come from such sources as your own savings, investors, or a business loan. SuperMoney’s guide to raising capital for a startup business can help you decide which funding sources will work best for you.
How much do vending machine business owners make?
The vending business is a 42-billion-dollar industry. Those who know how to work it can make good money. Vending machine profits depend mostly on the competence of the owner.
Here are some figures, based on a survey conducted by The Hustle:
- The average vending machine business operates 13 vending machines.
- The average profit of a single vending machine is around $310 per month.
- Most vending machines can make anywhere from $75 to $650 per month.
The better the location and product, the more profit a machine makes.
Operating, let’s say, 10 average vending machines, a vending machine business owner could make $37,200 per year. A high-performing vending machine owner could profit $78,000 per year or more from 10 machines. As you can see, if you want to make your entire living from this business, you’ll need to operate many vending machines.
How to start a vending machine business
Starting a vending machine business can be fun and exciting. Follow these steps to make it happen.
Choose your business structure, insurance, and financing
Before anything else, you should set up your business. This means choosing a name and business structure, writing a business plan, registering your business, buying insurance, and setting up your financing.
How to start you vending machine business
There are a few ways you could go with your vending machine business:
- DIY: Do it yourself, start from scratch, and build your business from the ground up.
- Buy an existing business: Do you know someone looking to sell a vending machine company? You can buy it and avoid some of the growing pains of a DIY business.
- Buy a franchise or branch: Some larger vending machine businesses offer franchising or partnerships. This option can save you time and money and help you learn the business more quickly.
After you decide how you’ll start your business, you need to structure your business, set up a business bank account, and purchase business insurance. For the last of these, speak to your local insurance agent to find an insurance plan that suits your business model and needs.
The most common options for structuring your business include making it a limited liability company (LLC) and running it as a sole proprietorship company. An accountant, lawyer, or business consultant can help you decide which business structure is most beneficial for you and give recommendations for where to set up your business bank account — which doesn’t necessarily have to be at a traditional bank. You can also take some time to compare business checking accounts for yourself.
Now is the time when you will decide how to fund your business. A small business loan can be a great option. If you have bad credit, you may still be able to get a business loan. Some small business lenders include Fundbox and The Business Backer.
Choose the right product and vending equipment for your business
Start with this principle: you can sell (just about) anything in a vending machine. If you see a need or interest in your market for something different, go for it. Just keep in mind that customers expect vending machine products to be relatively affordable. Most of all, your vending machine products should be tasty or useful for your customers.
Healthy food in vending machines is gaining popularity. Snacks with higher nutritional value outsell junk food by 300%. In addition to healthy foods, novelty vending machines are on the rise. To enter the vending machine industry, you’ll have to decide on your type of vending machine. Here is a list of some of the most common types of vending machines:
- Bulk vending machines
- Beverage vending machines
- Specialty vending machines
- Snack vending machines
- Custom vending machines
Once you’ve decided on your product type, you’ll have to source your vending machine. You can buy a new one or a refurbished one. Either one can work great, but a used vending machine will be cheaper. Consider which of the following features you want for your vending machine when browsing your options:
- Combination machines
- Refrigeration and safe food storage
- Credit card and large bill functionality
- Touch or voice accessibility
- Remote monitoring software and low-stock alerts
- Branded “wraps” for the front of your machine
- Interactive screens
Find and secure the best vending machine market and locations
Location is the number one most important decision that will affect the success of your vending machine. It’s all about generating the most leads. Here are some lead-generating factors to consider when choosing a vending machine location:
- Foot traffic
Schools are one of the most common and successful places to put a vending machine. Some 30% of vending machines appear in schools. If you go with a school, keep in mind that you will have to comply with USDA requirements for school snacks.
Chances are you will place your vending machines on someone else’s property. Securing profitable vending machine locations will likely require persuasion and negotiation with the business or organization that owns the real estate.
Most property owners will request you to pay to “rent” a portion of their real estate. Depending on the foot traffic and location, a 15–30% commission rate is a typical rental compensation. For a higher commission rate, you may be able to negotiate exclusivity with a location to prevent other vending machines from taking your business.
You will have to sign a legal agreement with the property owner outlining the terms of your rental. Consider hiring a lawyer to help you through this process.
If you want to keep expanding your vending machine company, always be on the lookout for new profitable locations. The most popular locations for vending machines include the following:
- Hospitals or medical centers
- Grocery stores
- Airports and shopping malls
- Apartment complexes
- Manufacturing plants
Make sure that whatever location you choose is a good market for your type of vending machine. The location should match your target market. Check local ordinances to make sure there aren’t any regulations prohibiting vending machines in your desired location.
Purchase and stock your vending machine
Once you’ve set up your business structure, decided on a type of vending machine, and signed a contract with the property owners at a great location, you’re ready to purchase your vending machine and purchase product to fill it. Start by filling up the machine and purchasing some buffer for restocking. You may also want to buy some extra products to hand out for free once you install the machine. This can be a great way to introduce customers to your new vending machine.
Provide great customer service and maintenance
If a vending machine is empty, dirty, or doesn’t work, you’ll see your sales suffer greatly. Most vending machines require about 15 minutes of service once per week. This includes cleaning, restocking, and making sure its mechanical functions are working optimally. You can usually use your own car to service your machines. If your business grows, a truck could be helpful to transport large quantities of products.
Software such as eManage can help you monitor the inventory and performance of your vending machines. Monitor and invest back into your business. Track what products are selling well and not selling well. Swap out the low performers for better products.
Consider hiring a vending machine professional for any maintenance needs. Most vending machine manufacturers have maintenance services you can call on.
Risks and rewards of starting a vending machine business
Like with any business, there are advantages and disadvantages associated with vending machines. Here are a few risks and rewards associated with vending machines businesses.
- Scalable: Once you get started, it’s easy to scale up by funneling profits back into the growth and automation of the business.
- Low overhead costs: You don’t need office space or even employees to run a vending machine company, resulting in little to no overhead costs.
- Creativity: Vending machines allow for creativity, customization, and optimization of products. There are so many options.
- Time commitment: Especially when at the beginning, managing vending machines can take a lot of time and energy. Hiring others to help you will mitigate the time commitment.
- Vandalism and theft: Vending machines are notorious targets for crime. Choosing safe and well-lit locations will help protect your vending machines from vandalism and theft.
How profitable is owning a vending machine?
Average vending machine operators have 13 vending machines and make $309 per month per vending machine.
Is it hard to start a vending machine business?
How difficult you find it to start a business depends on how well prepared you are beforehand and under what conditions you get started. Compared to some other businesses, starting a vending machine business is not very hard. You just need some capital, time, business knowledge, and a place to put the machine.
How do I start a vending machine business?
To start a vending machines business, you need to follow the guidelines laid out in this article. Set up your business, choose a vending machine, find a great location, purchase and stock your machine, then provide excellent service. Scale up to more machines over time.
Can you buy a vending machine and put it anywhere?
You can buy a vending machine and rent real estate on almost any type of property from a property owner. Check local ordinances to make sure there aren’t any regulations prohibiting vending machines in your desired location.
Do vending machines make good money?
Vending machines aren’t the most profitable business in the game, but they can make good money. Profit depends on location, foot traffic, products, and quality.
How much does one vending machine make a year?
One vending machine makes anywhere from $900 to $7,800 per year.
- To start a vending machine business, follow the framework laid out in this article. Set up your business, choose a vending machine, find a great location, sign an agreement with a property owner, purchase and stock your machine, then provide great service. Add more machines over time.
- The profitability of vending machines depends on the product, location, and quality of service. One vending machine can make an average of $309 per month.
- Starting a vending machine business can be fun and rewarding. You can sell almost anything in a vending machine and get the satisfaction of running your own business.
View Article Sources
- Cost of Operating a Vending Machine — Franchise Direct
- National School Lunch Program and School Breakfast Program: Nutrition Standards… — Federal Register
- Useful background articles from CC Vending, Forbes, Healthy YOU Vending, and money management sites — Various
- We interviewed 20+ vending machine owners. Here’s how much they make. — The Hustle
- Best Small Business Loans for Good, Bad and Fair Credit — SuperMoney
- Best Startup Business Loans (Even If You Have Bad Credit) — SuperMoney
- Complete Guide to Small Business Loans — SuperMoney
- Fundbox Small Business Loans Review — SuperMoney
- How to Find the Right Investor for Your Startup Business — SuperMoney
- How to Start a Franchise Business — SuperMoney
- How to Start a Sole Proprietorship Company: 7 Steps — SuperMoney
- Starting a Business in California? Here’s Everything You Need to Know! — SuperMoney
- The Business Backer Small Business Loans Review — SuperMoney
- What Is the Best Method for Raising Capital for a Startup Business? — SuperMoney