Want to start a profitable vending machine business in your spare time with no experience? Starting a vending machine business can be an ideal way to earn extra income.
It can be a part-time job or you can choose to invest the time and resources to make it a full-time job. On average, a vending machine would earn you a profit of $35 a week, but those placed in high-pitched locations can earn up to $400 a week.
For a vending machine to be profitable, you have to do strategic research. You have to identify the right customers, locations, and items to sell. While it sounds like a daunting task, don’t fret because, in this blog post, I’m going to cover the essential steps for starting a profitable vending machine business.
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Vending machine business FAQs
How much does it cost to start a vending machine business?
Vending machine prices vary depending on size and features, with a new one costing between $3000 and $10000. However, it will be cheaper to buy refurbished or used counterparts, anything between $1200 and $3000. Having the inventory cost in mind, you need as little as $2000 to start a vending machine business.
How much can I make with a vending machine?
Various variables affect the profits a vending machine can make. Location, demand for the item sold, and the products; are some of the parameters. However, a vending machine can earn as low as $5 per week to $400 a week.
What are the various types of vending machines?
Standard vending machines are snack and beverage vending machines selling soda, juice, pop, water, coffee, and snacks. However, with a move towards healthy eating, vending machines now sell healthy snacks. Also, there are vending machines for non-food items like laundry products, electronic accessories, tobacco, etc.
What is the size of a vending machine?
Vending machines come in different sizes and features; however, the standard size of a vending machine is 72 “H x 47 “W x 32 “D (source). If you’re installing a vending machine in an enclosed space, it’s recommended you make the space bigger, at least 80 “H x 53 “W x 40 “D. It not only allows room for opening and closing of the door but also gives space in the back for plug-in and air movement.
Where should I install my vending machine?
Installing your vending machine in high foot traffic will guarantee significant profits. Therefore, look for areas with increased waiting times like offices, airports, schools, medical centers, auto shops, retail stores, and manufacturing facilities.
However, you have to ensure the product you want to sell is in high demand in the location you choose.
How long does it take to install a vending machine?
Averagely, installing a vending machine takes 15 to 20 business days. Once you’ve notified the vending machine provider, they’ll come and verify the location. If it is ideal and secure, the installation process will proceed instantly.
6 steps to start a vending machine business
1. Research about the specific industry
It’s essential to venture into a business when you already know what you’ll do. Therefore, conduct thorough research about the items you’re going to sell. For instance, when you want to buy a snack, beverage, or snack and beverage vending machine, ensure you analyze the parameters related to the product.
Ensure you consider things like the source of your inventory. Choose cheaper suppliers to maximize your profits. Also, they should be located close so you don’t suffer costly shipping costs.
Research about the location where you would install the vending machine. Have different options and choose the ideal choice. Have an overview of the amount you would pay property owners as commission.
Conducting the research helps you actualize your business plan. You understand the amount you would need to start the business and realize strategies you need to invest in to prosper.
2. Choose your vending machine
Soda and snack vending machines are ordinary in the industry. However, there are many other types of vending machines you didn’t know about. You have to identify the specific demand you want to satisfy.
As a starter, you should invest in a vending machine with a specific market focus. For instance, you can start with a beverage vending machine and use business analytics to determine whether you would expand to other items or not. Also, start with a few inventories, reducing the chances of overstocking things not preferred by the target population.
One of the vending machines that won’t let you down is the food and beverage vending machine. In 2019, annual reports stated that beverages alone accounted for 33% of vending sales. Therefore, when you start a vending machine business, this old standard won’t let you down.
Also, you can decide to invest in multitasking vending machines. For example, rather than investing in one that offers soda, or snacks, you can opt for one that provides a combination of the two. You can also invest in the same kind of vending machine in different locations.
Vending machines aren’t limited to food items. You can invest in machines that offer things like electronic accessories, beauty products, laundry products, among many more. The choice of vending machine would depend on the demand you want to supply.
3. Decide your financing options
Unlike other small businesses, starting a vending machine business doesn’t need you to break a bank. A few thousand dollars is enough to start and run the business. However, that cash is nowhere near pocket change, and you have to ensure you get returns from it.
You can buy the vending machine using cash. These can be cash you have saved to start your side hustle, vending machine business. Therefore, after identifying the suitable machine, you can purchase it right away!
Sometimes, you may not have the cash needed to purchase the machine. You may lack a portion of the cash or the whole amount. This shouldn’t prevent you from investing in your business idea.
There are other options to finance the vending machine. For instance, you can opt for a short-term loan. With a financial history of your current business, you can secure a short-term loan to finance the vending machine. It is an ideal loaning option since vending machines aren’t that expensive.
Also, you can opt for an equipment financing loan. Here, the vending machine would act as the loan collateral. It is easy to get equipment financing since vending machines are durable and can last up to ten years.
4. Find a vending machine supplier
Now that you’ve found a suitable vending machine and secured the funds, it’s time to purchase the device. It is easy to find one online; however, you have to find the best deal. Be it new or refurbished, you have to ensure it’s worth what you paid.
Three types of sellers would guarantee the best vending machines: manufacturer, secondary market sellers, and consumer-to-consumer platforms. Even though expensive, manufacturers or wholesalers guarantee the newest technology, training, and delivery of their machines. Ensure you read the terms carefully, as some require a minimum order or additional servicing costs.
Secondary market sellers would provide you with a wide variety of vending machine brands and models. Also, they will equip you with relevant information about the machines.
As a first-time buyer, you don’t want to worry about things like costly shipping costs. Therefore, consumer-to-consumer platforms like eBay can be an ideal option for buying machines locally. It helps you filter options by location, prices, special features, and size. Check here for a list of vending machines for sale nearby.
5. Choose the right location
Returns on vending machines significantly depend on the locations they’re installed. Therefore, it should meet the needs of these areas. For instance, a coffee vending machine would flourish in an office park and not strip malls.
Ensure there’s a demand for the items you want to vend. It can be a location you’ve been to before and realized a market for the product. Or, there can be few vending machines, and there is a need to install more.
Vending machines are in demand in areas with high foot traffic. For instance, schools, hospitals, airports, grocery stores, laundromats, manufacturing plants, and apartment complexes are ideal places to install the machine.
After finding an ideal location, talk to the property owner. It would help if you convinced them to have your vending machine installed there. It would be best if you were clear with them about the contract terms, like commission.
An ideal office should have at least 100 employees to guarantee the success of a food vending machine. Also, ensure you abide by the laws for the specific state you want to install the machine.
6. Invest wisely
Once you’ve secured the right location, machine, and legal requirements, you’re ready to get started. Here are the must-have items you need to invest in.
First, you need to invest in the right vending machine system (VMS). It will help you control the machine remotely, streamlining your operations, and managing inventory and revenue.
Second, you need to invest your time. Take your time at least once a week to restock inventory, and collect revenue.
Lastly, ensure you invest in customer service to build brand loyalty.
A vending machine can be an ideal way to earn extra cash. You have to ensure you choose a suitable vending machine, new or used. Also, ensure you invest in the proper inventory and location to maximize your profits.