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Starting your own vending machine business is an excellent side hustle or full-time gig.
The global vending machine market was valued at around $56 billion in 2022, and this is expected to grow by as much as 150% to $129 billion in 2030.
This means that there’s plenty of room for new players to enter the market.
However, running a successful vending machine business isn’t necessarily simple. Buying a machine and putting it somewhere is the easy part.
But you also have to decide what to sell, set the appropriate profit margins, and put your machine in a viable location.
In this guide, we’ve outlined everything you need to know to learn how to start a vending machine business.
- The global vending machine industry is valued at around $56 billion, and it’s possible for anyone to start their own vending machine business.
- Vending machine businesses have low start-up costs and offer lots of flexibility.
- They’re also easy to run and have the potential to generate a decent amount of semi-passive income.
- It’s essential to match the products you’re selling to your location and market. Try to place your machines in high-traffic locations to maximize your sales and profits.
Why Start a Vending Machine Business?
Low startup costs
One of the most attractive things about starting a vending machine business is that you don’t need much money. It’s possible to start with a single machine, and you should be able to pick up a secondhand model for under $1,000 if you’re on a tight budget.
However, new machines can cost significantly more. Small, mechanical, or bulk machines start from a few thousand dollars, but high-end electronic machines can reach $10,000+.
For a general snack and/or drink machine, another $200-$300 should give you enough stock to get started with. You’ll have to spend a little every so often to replenish your stock, but you can pay for this with your income.
Machines selling specialty items such as electronics can cost significantly more to stock initially. We’d recommend staying away from them to begin with unless you have a significant budget.
You may have a few other costs associated with things like branding, registering your business, and legal advice. Most of these will be one-off fees, and they shouldn’t total more than $1,000 or so.
Most business owners or managers will be happy to let you place your machine on site for free. Some may ask for a small commission or recurring fee, but it’s best to avoid these unless you’re sure that it’s a high-traffic location where you’ll make a decent amount of sales.
Of course, you probably won’t make a huge income with a single machine, but you can always purchase more machines and grow your business in the future.
Not all vending machines are equal, so do your research and shop around to get one that’s right for your needs. Online forums are a great place to start, as they enable you to get advice from people who’ve been in the business for a long time.
Flexibility to set your own schedule
Running a vending machine business shouldn’t take up very much of your time. The only work involved during an average week is checking up on your machine(s) once or twice, restocking it, collecting money, and performing any maintenance/cleaning that’s required.
The best thing is that these tasks can all be completed at any time. This means you can set your own schedule that fits your personal and/or professional life—not the other way around.
If you decide to start scaling your business and reach tens or even hundreds of machines in different locations, you might want to employ someone to help you check and restock them.
Passive income generation
Who doesn’t like a bit of extra money on the side? Vending machines can gross anywhere from a couple of hundred to $1,000+ per month if they’re in a good location, and as much as 50% of this can be profits.
Plus, since they’re able to operate 24/7, you can make money while you sleep, work another job, or simply enjoy leisure time.
Vending machine businesses are also super scalable. You can start with as little as a single machine and add more when you can afford it.
If you’re able to funnel your profits straight back into your business, you’ll be able to expand rapidly to grow your business and increase your revenue over time.
Once your business grows large enough, you may even have to employ a few people to help you check and restock your machines. You might also like to hire one or more assistants for a few hours per week if you have machines in different cities or different parts of a large city.
🧠 Did You Know?
All-in-one business management software like Connecteam can make it significantly easier to run a successful, efficient vending machine business. It allows you to effortlessly manage, track and communicate with your staff while on the go.
Starting a vending machine business is an easy process. It’s not too difficult to learn how to stock and maintain your machines.
Plus, modern machines are becoming increasingly user-friendly. For example, most modern machines accept credit card payments, which means you won’t have as much physical cash to remove from the machine, count up, and deposit into your bank account.
📚 This Might Interest You:
Read our article on the small business trends to watch for in 2023.
How to Start a Vending Machine Business: Step by Step
Starting your own vending machine business is a pretty straightforward process. Here’s a step-by-step guide outlining exactly what’s involved.
Step 1: Name and register your business
First up, you’ll need to take care of the red tape associated with starting a new business.
Begin by choosing a business name. This should be catchy, unique, and memorable. Remember, your business name is one of your most important brand assets, and it will enable people to recognize your machines.
You’ll also need to decide on a business structure, get a business license, and register your business. There are a few options here, including registering as a sole trader, corporation, or limited liability company (LLC).
💡 Pro Tip:
Requirements vary from state to state. Seek professional guidance from a lawyer or industry professional, who can ensure you’re choosing the right structure and fulfilling all registration requirements.
Step 2: Decide what to sell
After deciding to start a vending machine business, you need to decide what you’re going to sell. Depending on what you want to sell, you might also need a different kind of vending machine.
There are numerous options here, including various non-food options that are rapidly increasing in popularity.
A few of the most popular items sold in vending machines include:
Snack foods such as chips, candy, and gum have long been a staple of vending machines across the world. You might like to make yourself stand out by offering something different from the mainstream, such as health-focused snacks or vegan options.
Hot, cold, and frozen food
Vending machines can also sell hot, cold, or frozen food that’s ready to eat. Machines selling hot food, such as warm sandwiches or burgers, require specialty equipment to heat the items. For cold goods like salads and frozen foods like ice cream, machines must be refrigerated to the correct temperature.
Both hot and cold drinks are popularly sold through vending machines.
Cold beverage vending machines selling drinks such as soda and juice are often found near or in the same machine as snacks.
Hot drink machines selling tea, coffee, and other beverages require specialty machines to heat and make them. They’re popular in offices, break rooms, and anywhere else people are looking for a quick hit of caffeine.
Phone chargers, headphones, and other electronics are becoming increasingly popular items in vending machines.
Machine placement becomes extremely important if you’re selling non-consumables. These items are often more expensive and targeted to a specific market, so they need to be seen by the people who are most likely to buy them.
You can basically sell anything through a vending machine. If there’s a market for it, there’s an option to set up a machine.
For example, you could place a machine at your local laundromat that sells laundry detergent and other cleaning products. Similarly, a machine selling stationary could perform well on a high school or college campus.
💡 Pro Tip:
It’s crucial to match your product choice to your target customers and machine location. Areas with a lot of traffic like malls, bus stations, and office buildings can be excellent location choices.
Step 2: Find the optimal location for your vending machines
Finding the right place to put your vending machines is one of the most important parts of running a vending machine business. In simple terms, the more people see your machine, the more people are likely to buy something.
First, you’ll want to look for locations that aren’t too far away from your home or workplace. This is because you’ll have to check up on and/or refill your machine at least once or twice a week.
If you have multiple machines, you’ll probably want to put them relatively close together to begin with to reduce the amount of time spent traveling between them. As your business grows and you’re able to hire employees, this might change, and you’ll be able to spread to multiple locations.
Next up, think about the type of location that will be best suited to the products you’re selling.
For example, machines selling snacks and drinks work well in offices, schools, and other places where people are likely to be looking for quick nourishment. Machines selling electronics are best in places like shopping malls and airports where people are willing to spend some money.
Once you’ve identified a few potential locations, it’s time to start speaking with business owners and managers. Ask them whether they have space on site for a machine, and if so, whether they have any conditions. For example, some may ask you to stock certain products.
Although it’s not standard practice, you may be asked to pay a commission or fee to place your machine. This isn’t usually worth it unless you’ve found an excellent location that enables you to make regular, consistent sales.
Step 3: Identify the right type of vending machine for your business
There are essentially 3 different types of vending machines on the market.
Bulk vending machines are designed to dispense a single product and are the cheapest option. The classic gumball or candy machine is a great example of this.
Next up are mechanical machines, which use a mechanical payment and product dispensing mechanism. These are popular for simple snack and drink machines, and they can be refrigerated or non-refrigerated.
At the top of the range are electronic machines, which can usually accept credit card payments and have electronic payment and product dispensing mechanisms. These often have a touch screen to make it easier for customers to make a purchase.
Once you’ve settled on the type of machine you’re going to use, you’ll need to find one that’s designed for the products you’re planning to sell.
Some machines are quite general and can be used to dispense a variety of snacks and drinks. But others are more specialized—for example, coffee machines, those dispensing hot meals, or machines that need to keep drinks or frozen goods cold.
Specialty machines can be very hit-or-miss, so they aren’t usually a great option for people entering the market. It’s often best to start with a simple snack and/or drink vending machine.
Step 4: Determine the best place to buy or lease your vending machine
There are a few different options when it comes to sourcing your first vending machine. If you have a decent budget to work with, you can simply buy a new model from a manufacturer or wholesaler. However, these are usually quite expensive, and you could be looking at anything from $3,000 to $10,000 or more for a single machine.
Another option is to buy secondhand. Used machines are much more affordable, but you do run the risk of them needing repairs and more maintenance than a new unit.
Some good places to source used machines include eBay, Amazon, and Craigslist. You should be able to find a decent machine for under $1,000. Machines sometimes pop up for as little as a few hundred dollars if you’re willing to spend some time waiting for a good deal.
Other options include leasing a machine or entering into a partnership with a supplier or other third party. Some suppliers, for example, will provide and maintain your machine for free if you commit to only purchasing stock from them.
Seek legal advice before committing to any contracts with third parties. A set of professional eyes will ensure you aren’t being treated unfairly or even illegally.
Step 5: Ensure you stock the right products
The difference between a successful vending machine business and one that isn’t very profitable can be as simple as product selection. The most important thing to do is match your products to your target customers.
To start we’d suggest buying small amounts of a number of different products. Go for known brands, even if it costs you a little more. Generally, it’s best to stick to well-known flavors as well if, for example, you’re going to be selling snacks.
Once you start selling products, you’ll immediately get a feel for what is and isn’t selling. If you have items that nobody seems to be buying, consider lowering the price or replacing them with something else.
Just because you love a particular snack or drink doesn’t mean that it’s popular with everyone else, so don’t let your personal preferences dictate your decisions.
Bonus: Repairs and maintenance
Although vending machines offer an excellent way to make extra money, they aren’t completely hands-off. Since they’re normally in public places, theft and vandalism can be an issue. Your machines will also need service and repair from time to time.
Ensure you regularly check your machines to make sure they’re running correctly. Any downtime is time that you aren’t making money, so keeping this to a minimum is important. Don’t neglect maintenance, and make sure you work it into your business plan.
Starting a vending machine business won’t make you rich overnight, but it’s a good way to begin generating some semi-passive income. You don’t need any special skills to enter the industry, and the entry costs are very low compared to most businesses.
To get started, you’ll need to decide what to sell, source a machine, and find somewhere to put it. This doesn’t have to be a difficult process, and by following the steps outlined in this article, you can have your own business up and running in no time.
Is it hard to start a vending machine business?
Starting a vending machine business is an easy process. All you need to begin is a machine, something to stock it with, and somewhere to put it. Managing your business involves restocking your machine and removing any cash once or twice a week as necessary, so there’s little time investment required.
How much does it cost to start a vending machine business?
The main costs associated with starting a vending machine business are purchasing your machines and stocking them. You can expect to pay anywhere from a few hundred dollars to $10,000+ for your machine, depending on its condition, age, and model. Most machines can be stocked initially for a couple of hundred dollars. Overall, you should be able to start your business with as little as $1,000.
Are vending machines a good investment?
Yes, vending machines are excellent investments. It’s fairly safe to assume that, when run well, an average machine can pay for itself within about 12-24 months. This essentially means that you may get a 100% return on your investment within a year or two.