Having a vending machine business isn’t new. You can find them everywhere, like stadiums, bars, pubs, schools, and gyms.
However, what are the actual requirements for entering this industry, and how profitable might it be in the long run for you? After all, I’m sure you’re not trying to get into this business just to make a quick buck.
So let’s get started with the juicy facts and break down what it will take for you to join this $23 billion market.
Alright, so How To Start A Vending Machine doesn’t exactly fit into a nice category.
At the end of the day, starting a vending machine is a… unique way to think about making money.
It’s certainly possible to make money with off-the-wall businesses like this, but unless you’re interested in taking years out of your life to experiment with an unproven business model, I would look elsewhere.
My #1 personal recommendation if we’re talking about starting a fully-online business has got to be the Lead Generation & Ad Agency business models.
There are a handful of programs that teach you the ropes, but my #1 choice that combines both of those business models into one is the Digital Landlords program
But, if you’re hard pressed to jump head-first into an off-the-wall business model, let’s continue to my full breakdown of How To Start A Vending Machine business.
How To Start A Vending Machine Business In 5 Easy Steps
- Consider all of your vending machine options: As vending machine business owners, you have lots of options (bulk vending machines, snack machines, soda machines, specialty vending machines)
- Find the right location for your vending machines: This is where you’ll need to get clear on your target audience and who you want to sell to. You’ll also need to be able to work out deals with the property owners.
- Find your vending machine: You’ll need to contact sellers, wholesalers, and manufacturers, to decide which one is right for you. Some of these electronic vending machines can be quite expensive!
- Stock your vending machine with inventory: When you own your own vending machine company, it’s important to know that it won’t make you money if it’s empty. Each machine needs to be fully stocked.
- Profit margins and startup costs: When starting your own vending machine company, it’s important to know what you’re going to need in capital and what your prices will need to be so you can profit.
Vending Machine Costs
This business opportunity’s relatively low initial costs are the primary factor in its popularity. In general, $5,000 will be enough to get you started.
Vending machines utilized range in price from $1,200 to $3,000. Therefore, a brand-new vending machine costs between $3,000 and $10,000.
Depending on your target market, you may need to invest some money after getting your vending machine to stock up on snacks or hygiene products.
The price of all your stock depends on the products you have chosen and how many machines you have.
This could range from a couple of hundred dollars to thousands of dollars.
Even though that doesn’t sound like much, given the money you have to start at your disposal, there’s a lot more that goes into this business so you can get the cash flow you want.
For example, business partners can be serious headaches and even start to demand more money from you. Worse yet, it’s not uncommon for people to go around at night, tip the machine, break it open, and steal everything inside (including the money).
If you like the idea of having a protected solid cash flow each month through multiple assets that are IMPOSSIBLE to break into, check this business model instead!
In-Depth Breakdown Of My 5 Steps To Start A Successful Vending Machine Business
Getting specific with your approach is one of the best methods to ensure success. Such as calculating the population and traffic of the area you’re considering.
When you believe you have located the ideal location, you must contact other property owners to determine whether they would be interested in forming a partnership.
Even if you lack connections, you can still join the list of other successful vending machine business owners.
Here’s how you can start with 5 easy steps!
1. Consider Your Vending Machine Options
Despite the widespread misconception that you may only operate this business in the conventional snack and beverage way, many possibilities exist in the vending machine market.
To keep things straightforward, I’ll only concentrate on the four most common types of vending machines.
You should consider all four factors when selecting products for your target market.
I recommend that whatever vending machine you choose to go with, you at least choose two with a specific target market.
What this does is allow you to gather data about things like your most popular products or certain patterns regarding sales; you might even find out about micro markets!
Food And Beverage Vending
A 2019 annual analysis by Vending Market Watch revealed that most of the US vending machine market share was made up of food and beverage machines containing plenty of soda and sweets.
Nearly a third of ALL sales came from beverage vending machines! Having said that, if you’re set on purchasing a vending machine, a machine that sells beverages might be your best option.
Now that being said, you can change it up a little. For example, you could buy a snack machine that offers both snacks and drinks to offer more options for anyone making a vending machine purchase.
Some vending machine entrepreneurs find that they get their best results when they pick one type of machine and just stick it in a bunch of different areas.
Whatever you want to target, it’s a good idea for new vending machine operators like yourself to choose one type until you get more familiar with the vending industry.
What is bulk vending? Bulk vending is a vending machine business that sells things like gumballs, stickers, and rubber balls. A bulk vending machine needs very little capital and maintenance.
This might be your best bet for an introduction to the vending machine business. A machine like this, refurbished, might only cost you $50.
The overhead is extremely minimal on these products, and the best is that they can bring you in an extra $30 a month or so in the right market.
Talk about ROI!
The dollar figure might be a bit modest, but if you pick an area popular with families with kids, you could see a solid passive income stream making its way to your bank account.
Most bulk vending machines are mechanical devices and don’t require electricity or battery power to operate, which means the cost of operation is low to nonexistent. That said, many candy and toy vending machines are older, so a used device might require minor repairs before it’s functional.
Worried about just being limited to a couple of bouncy balls and maybe some drinks to make you passive income every month?
Don’t you worry!
There are vending machines that allow you to sell things like expensive tech accessories, beauty products, and more. Great locations for these would be airports and malls.
Some specialty vending machine items include:
- Hot Drinks: Hot drinks like coffee are always a knockout in areas like the office, universities, and other conference centers. The vending business thrives in these areas.
- Retail: If you’ve got some deep pockets and want to make them deeper, then selling things like phone chargers and headphones might be something you should get into. If you can set the appropriate margins, there’s no reason your local airport or mall wouldn’t take you up on that offer!
- Tobacco / E-Cigs / Weed: Tobacco vending is actually legal in many states and can be quite the money maker. On top of that, JUUL vending machines are popping up as well. The Cannabis vending machine business is also exploding as it continues to be legalized.
If you want to start a vending machine business but just lack the knowledge to do it… Your greatest option might be to create a franchise. Working under a franchisor will allow you to access additional training and help regarding how to set up the business. Even how many machines you wish to purchase will be up to you. However, you’ll still have to give the franchisor a portion of your profits.
2. How Vending Machine Business Owners Find The Right Location
Yes, the type of vending machine you choose may matter. But the location of that vending machine is just as crucial—if not more crucial—than anything else.
You might have the best items in terms of business ideas, but your location choices might have been completely off the mark.
For example, a protein bar vending machine might be a total miss at a high school but a total hit at the gym in town!
When starting your own vending business, note locations you have visited in the past where you purchased something (food, drink, etc.) and why. The odds are many other people also purchased those vending machine products in that location!
Some other location ideas for your vending machine include:
- Schools (soda/candy)
- Hospitals or medical centers (hand soap)
- Grocery stores (little toys/gumballs)
- Airports and shopping malls (cellphone chargers/travel pillows)
- Laundromats (dryer sheets/fabric softener)
- Apartment complexes (candy/soda)
- Manufacturing plants (protein bars/sports drinks)
After you have chosen your location, it’s time to get out there and secure your spot. If you were a salesman in a past life, it’ll probably be easier for you to call them up and get it started.
But if sales aren’t really your style, then reaching out to the local Chamber of Commerce might just be your best shot. Going that route will also give you more ideas about locations and some recommendations of who to approach. They also might have information about the most popular areas in town.
But let’s be real, that’s a lot of footwork and a lot of research… not exactly something you can start overnight.
You can certainly make money with a vending machine, but if you’re gonna put in the amount of GRUELING work to become a vending machine entrepreneur (which, trust me, isn’t easy), you might as well bring in some REAL money.
The program that helped skyrocket my online business to $40,000+ per month teaches some of the same vending machine skills but shows you how to monetize them in a much more profitable way.
Understand State-Specific Vending Laws, Regulations, And Compliance
Did you really think setting a vending machine business up would be as easy as just plugging it in and leaving?
Unfortunately, there are actually a whole bunch of different rules in various states regarding vending machines that you have to abide by.
Before reaching out to businesses in the area you’d like to work with, make sure you can follow all the rules and guidelines from your state.
Know Commission Requirements And Prepare A Proprietor Contract
Before you run away all high and mighty with your profits defeating the 9-5 rat race, remember, you’ll need to pay a commission to your partner providing the location and electricity.
A fair commission in the vending machine industry is anywhere from 10-25% of your overall revenue from the machine (machines) under the property owner’s supervision.
When going into business with another party, make sure you draw up a contract with the other business owner that covers compensation, contract length, and terms.
Beyond that, also make sure to include provisions in case of a breach of said contract. Be sure also to include maintenance costs and restocking expectations in the contract.
And always have a lawyer look over it before signing.
3. Find Your Vending Machine
Purchasing a vending machine is likely the simplest step in starting a vending machine business. These items are available both new and used on various internet marketplaces.
The best thing you could do is to start looking into what your vending machine will give and what others are willing to pay for a unit like it.
When comparing the various machines, remember to take inventory expenses into account as well.
To find the vending machine that will be your golden goose, start by looking through these three types of sellers:
- Wholesale vending machine suppliers or Manufacturers: If you want all the options, this is where you go to look. Here you’ll find machines with the latest technology and vending equipment. However, some might require you to buy in bulk.
- Secondary Markets: This is where you go if you’re looking to read up on different brands and models. In other words, this is where you go shopping competitively.
- Craigslist/eBay/Facebook: These are the platforms you go to when you’re in a hurry and looking to buy something and get it fast. In fact, this is probably the best route to go if you’re starting this vending business for the first time.
Something you’ll find out rather quickly, regardless of the location you choose to buy from, is that there are all sorts of vending machines with different options and features available in all price ranges.
Some of those advanced tech features include:
- Snack options/drink combination machines
- Credit cards and large bill functionality
- Touch or voice accessibility
- Remote monitoring software/inventory management system
- Interactive screens
Don’t get too caught up with all those special features, though; all those add-ons to your vending machine could become costly, and it’s hard to pass that on to the consumer.
Who needs features when you can offer results, though?
4. Stock Your Vending Machine With Inventory
Now that you’ve chosen what vending machine you want to go with, all you have to do now is stock that bad boy up with inventory.
But make sure you do research!
Product selection is one of the most important parts of this process. You could have a fancy pants machine, but if it’s not got stuff people want to buy, then you won’t turn a profit.
It’s definitely safer to go more expensive than to go cheap.
Remember that drinks will make up a large portion of your sales if you offer a food and beverage vending machine. It will be good to know that the market is shifting from soda to healthier drinks like coffee and flavored water. Be sure that your location will be able to provide these specialty foods and drinks to keep sales steady.
One last thing to consider when stocking your vending machine with products is that different types of vending machines can only support certain shaped products. Make sure your vending machine can fit the food and beverage products you wish to sell.
5. Profit Margins And Startup Cost
The great thing about a vending machine business is that you don’t have to front near the amount of capital that you would for other small businesses. Some small businesses can cost hundreds of thousands to start!
However, I’m still aware that even a few thousand dollars isn’t really pocket change, either. If you think you’ll need a loan to purchase a vending machine to start your business, consider the following.
If you’re a business owner and have the history to prove it, then picking up a short-term loan to finance your vending machines might be the best way to go.
All a short-term loan is, is simply a lump sum of cash that is directly deposited into your business bank account. After the money is deposited, you’ll repay the loan with interest over time. But remember, these are short-term loans. You will typically have to pay these back, plus interest, in 18 months or less. Although they’re easier to qualify for…the interest rates are much higher than you’d expect.
Even though this is a small business loan, the lenders will still need to run through your business’s history and financials before extending you said loan. To give yourself the best shot of acceptance, bring a long revenue history and a good credit score!
Vending Equipment Financing
You don’t need tons of money to start a profitable vending machine business…but if you do need some help, you can try for an equipment financing loan. This type of loan will depend on the value of your equipment since it will also act as the collateral in case you default on the loan payments.
As long as you take good care of your vending machine, it can last over 10 years! That might also reassure lenders. When exploring financing options like this, you must have a solid business plan in place with a course of action on how you choose to carry that business plan out, on top of quotes on the machines you plan to purchase.
But everyone knows financing can be one hell of a headache!
Pros And Cons Of Starting A Vending Machine Business
Think about it. It’s crazy, right? You can literally start a vending machine business that’s profitable for just a few thousand dollars. And although that sounds amazing, it’s not always sunshine and rainbows; like any new startup, it’s got its pros and cons.
Let’s check ’em out!
- Expandable: Once you have one going, it’s easy to add another and another one. Soon enough, you’ll have a booming vending machine business!
- Endless Options: There are all sorts of vending machines in the market today. Think of any kind of product, literally anything, and I’ll bet you there’s a vending market share for it.
- Virtually no overhead costs: Thankfully, there’s almost no overhead when running a vending machine business, especially when you own the business by yourself. On top of that, vending machine businesses don’t need a formal office space or employees. Talk about no extra hands in the pie! No more payroll, benefits, or thousands in rent.
- Time commitment: When running a vending business with several different machines, it will take some time to go around and stock, service, and collect money from said machines. If you don’t like constant travel, this isn’t for you.
- Theft and vandalism: As mentioned earlier, vending machines are an easy target late at night in areas that aren’t densely populated. To ensure its safety the best you can, try to pick an area that’s populated during all hours and well lit.
Frequently Asked Questions
Are Vending Machines Profitable?
Yes, vending machines are certainly profitable. The average vending machine earns $35 a week, but if you choose the right spot and stock items frequently, you could earn over $400 a month per machine.
Is that not enough for you, though?
Wanting a little more?
Do Vending Machine Owners Pay Rent?
Yep, but not in the traditional sense; they pay rent in the form of commission to whoever owns the building. The commission they pay out is typically 5-20% of their total revenue from the machines.
Are Vending Machines Taxed?
Yes, the amount of sales tax varies by state.
Where Can You Place Vending Machines?
You can place vending machines just about anywhere you can imagine. The most popular choices are offices, sports stadiums, malls, and schools. Before you set one up, you’ll need to sign a contract with the property owner.
Alternatives To Starting A Vending Machine Business?
Yes, there are plenty of other online business models to choose from if you want to pursue making money online. Here are just a few:
Is Starting A Vending Machine Business Legit?
Time for the $1,000,000 question: is Starting A Vending Machine actually legit?
I wouldn’t technically call it a scam, though others might.
It’s technically possible to make money with this program, so in that sense, it isn’t a scam.
What I’m saying is that after buying, someone will send you a login to a website where you can view their material. No one is riding off into the sunset with your money, leaving you empty-handed… technically speaking.
But the second, more important question is: is Starting A Vending Machine actually worth the investment?
My honest answer is that for most people out there, probably not.
There are countless other business models that are proven & easily scalable, so why risk it for… not an incredibly huge payoff?
I’d rather have a program with thousands of successful students & plenty of room for others to join.
If you’ve followed my blog for long, you know I recommend a few different programs depending on your skills & goals.
My current top choice is becoming a Digital Landlord because you have a proven, systematic path to 6-figures, and you can do it from anywhere you want.
I’ve got friends in there posting deals from the middle of the woods in a camper-van with their pet pig… which is kind of cool.
What Is My Top Recommendation For Making Money In 2022?
Alright, time for me to get real with my lovely readers for a moment:
I’ve personally tried all of the major online business models:
- I’ve sold fidget spinners through Amazon FBA
- I’ve dropshipped a toilet bowl putting green on Shopify
- I’ve sold women’s health supplements via Clickbank affiliate marketing
And I made money with all of them, so trust me when I say: there is no “perfect” business model.
THAT BEING SAID: I would at least recommend you implement something that is tried and true, because I’ve seen TOO MANY people (including friends and family) get burned by stuff like How To Start A Vending Machine.
They come out of left field with some random idea, make it seem attractive, and then make themselves a quick buck by luring in unsuspecting people.
I’m not saying that starting a vending machine business isn’t legit, I’m just saying you need to be very careful.
This is a big reason why I only recommend proven, tried, and true business models, like Lead Generation & Ad Agencies.
There are a bunch of programs out there that teach you those skills, but my top choice is the Digital Landlords program.
Why? It has proven leaders with their own 7-figure businesses implementing exactly what they teach you.
I’ve also got over a dozen personal friends in there, so I feel comfortable telling you it works.
Whether you’re a complete newbie or you’ve been around the block before but have never had that “big win” to propel you forward, their program works.
1)Time: If you’ve got a spare hour or two each day, you can do this. If you want to drop everything and go all-in, you can do this. More time obviously means faster results, but even putting in a few hours per day is enough to see real success.
And because of that flexibility, you don’t need to trade your time for money. Once the income starts, it’s recurring (for the most part).
That means you can take a month off, travel the country, pursue a passion project, chill on the beach, or charter a boat across the world.
But you can only do that once you’ve created an income stream that doesn’t require YOU to be there all day, every day.
2)Big Margins: With most businesses, you’re often going to have really slim margins. That means you need to hit a serious scale to make serious money.
Being a Digital Landlord, your profit margin is nearly 100%. Watch here to learn how.
Just a reminder: these Digital Rental Properties are worth (at a minimum) $500/mo in semi-passive income. And each time you create another one, your income increases, and the effort put into creating the next property decreases.
Best-case scenario, you have properties bringing in over $3,000+/mo on “auto-pilot.”
3)It’s Effectively Copy-Paste: Here’s my favorite part: once you have your first Digital Rental Property up, you can literally copy-paste another version of it and find another willing “renter” in a few days. DOUBLING your income doesn’t get much easier than that…
If you wanted to double your income by starting a vending machine business, you would need to find the right location and determine your target market. And I can guarantee you that’s a lot harder than a few clicks & a phone call.
4)You’re Helping REAL People: My biggest gripe with starting a vending machine business is that you’re basically only helping yourself.
But when you’re a Digital Landlord, you’re helping solve REAL problems that people are ASKING for help with:
Small local businesses around the world need one thing: customers. Without them, their business would fall apart. If we can provide those customers, they’re going to be really happy – and they’re going to pay you for it.
You’re helping a struggling mother or father put food on the table for their families, put their kids through college, or simply live life a little bit more comfortably.
Having this type of impact on the world is what will help you sleep soundly at night.
So, the rest is up to you. You could keep looking at other off-the-wall business models like Starting A Vending Machine business and maybe hit it big one day.
You could keep researching and researching for the next few months (or few years), never making a concrete decision.
OR, you can look deep inside, think about those dreams, hopes, & desires, and make the decision to ACTUALLY make it happen, just like it has for thousands of other students before you.
Making a fortune while actually helping real people that need it.
If this sounds like you, click here to see how it all works.