How To Start A Vending Machine Business

Starting a lucrative vending machine business may not be as complicated as you think; if you’re wondering how to start a vending machine business, you’ve come to the right place.

Each year, the vending machine industry brings in billions of dollars in revenue. Whether you have previous business experience or you’re new to the game, starting your own vending machine business takes a little know-how, a solid strategy, and the right financing.

Read on to learn more and take the first steps toward launching your successful vending business.

How To Get In The Vending Machine Business

Getting into the vending machine business requires a few things: an eye for detail, great people skills, commitment to success, and viable financing. Not only do you need the means to buy your first machines, but you’ll also need to negotiate contracts to place them in highly-trafficked spots and have enough business sense to tell what customers are likely to buy.

Things To Consider Before Getting Into Vending Machines

While owning a vending machine business certainly has its benefits, there are some drawbacks to note as well. Let’s explore the pros and cons of owning your own vending machine business to help you decide if it’s right for you.

Cons

What To Sell In A Vending Machine

What should you sell in your vending machines? In a sense, it’s really up to you and what your vending machines can reliably store.

You might want to stick to classic options to start out. Consider stocking popular foods such as:

• Bags of chips and similar snacks
• Cookies
• Chocolate snacks and candies
• Nuts and trail mix

Machines with refrigerators are able to store and facilitate sales for:

• Sodas and water
• Iced teas
• Lemonades
• Deli sandwiches
• Energy and protein drinks

There are even vending machines that distribute pizza, hot soups, and pasta dishes. (And one in Japan that delivers live crab!) As technology advances, so do your options.

Food and drinks account for the majority of sales in the vending machine industry, but you aren’t necessarily limited to those. It’s possible to get your hands on vending machines that can efficiently stock products such as:

• Travel accessories
• Electronics
• Clothing
• Bottles of wine
• Books
• Gifts (trinkets)
• Adult products

Also, keep customer demographics in mind as you strategize and purchase inventory. Airports and train stations are great spots to sell charging cables and headphones since passers-by are more likely to need those items on the go and make a purchase. Bars might be a great place to do a vending machine with goofy impulse buys.

Similarly, as healthy snacks and drinks continue to be popular, don’t overlook health-forward brands and food options as you brainstorm what to stock. Instead of stocking a machine with sodas and unhealthy, sugary snacks inside a gym, you’ll want to invest in protein bars, energy drinks, and bottled water.

How Does A Vending Machine Business Work?

There are three different paths you can take to start your own vending machine business. You can:

• Buy pre-established routes with their own machines
• Set up your own with machines you’ve purchased or leased
• Buy into a franchise

In each case, you must schedule a time to gather the money in the machines, restock them, and clean them to keep them pristine and functional.

“Routes” are just as they sound — routes along which you’ve set up machines that you travel between. Your route may consist of just one machine to start out. Over time, as you purchase more machines and enter into more contracts to do business at the locations you desire, your route will expand.

Money made from the machines is used to purchase additional inventory, cover maintenance costs, expand the business, and pay business owners per the agreed-upon rate in the contract. After all those expenses are covered, the remaining funds are profits for the vending machine owner.

If you plan to expand your business, you face additional costs. This includes hiring an employee or two to keep your machines stocked in addition to upgrading or adding new machines. You may also want to look into taking out a business auto loan to get a business van or truck to help with restocking.

Let’s go into more detail with each option to help you decide which is right for you.

Where Will You Put Your Vending Machines?

Location is the single greatest factor that will determine the success of your vending machine business. Without access to foot traffic or to spaces where you know people will congregate for long amounts of time, you won’t make any sales.

What does the process look like for researching and securing great locations? Here’s what you should do.

1. Have A List Of Locations In Mind

Vending machines can be used almost anywhere, including but not limited to:

• Hospitals
• Shopping centers & malls
• Apartment complexes
• Laundromats
• Hotels & inns
• Schools
• Airports
• Warehouses
• Industrial complexes
• Car dealerships
• Barber shops
• Bus & train stations
• Government buildings & post offices
• Restaurants, bars, bakeries

All of these types of businesses have plenty of people coming and going all the time — some even having 24/7 foot traffic, such as airports and hotels.

Basically, as you’re thinking through where you should put your vending machines, aim to make it as convenient as possible for people to find your machines when and where they’ll most likely need them.

2. Check Out The Locations In Person

Try to visit each location that sticks out to get a real sense of the potential sales you can make and the most opportune spots to place your vending machines. Besides foot traffic, you should inspect the quality of the space overall. Ideally, it will be clean and well-maintained. You don’t want the location’s problems potentially becoming your own.

It’s also important to note here that it’s crucial to put your machines somewhere safe — not just from vandals and thieves, but also places where the machines won’t undergo accelerated wear and tear.

Vending machines exposed to the elements, for example, will need more checkups and maintenance than those put inside buildings.

3. Keep An Eye On Competition During Your Research

Any pristine spot is going to have competition — in fact, someone else may have already had the same idea and beat you to the punch.

While this doesn’t necessarily entail the end of your business, having too much competition in the same space won’t do you any good, especially if the products you sell are similar.

4. Speak With The Business Owner To See If A Deal Can Be Made

If you aren’t given permission to set up your vending machine in a location, then it’s off the list.

Refining your negotiation and salesmanship skills to arrange contracts with business owners is just as important as finding the right locations for your vending machines. How you approach and handle the conversation sets the stage for the deal.

Getting A Vending Machine

Getting your first vending machine is a super straightforward process.

All you need to do is hop online, find a machine that stands out, and…boom. You can purchase machines directly online or pick them up in person at a local vendor.

Not all vending machines are created equal, though. As the use of cash and loose change continues to decline, you should prioritize vending machines that can do transactions via credit card and electronic payments, such as Apple Pay.

Regardless of what you want to sell with your vending machines, if yours can’t take electronic transactions, you’re missing out on a huge chunk of profits. Some experts state that it could be upwards of 70% of potential sales. Your machines should also have access to the best credit card processing companies.

Also, advanced machines come equipped with remote monitoring systems that allow you to keep track of sales, check your inventory, and monitor maintenance needs. Remote monitoring technology saves you the hassle of having to frequently visit each location in person and helps you ensure your machines are fully stocked and in working order from the comfort of your home or office.

How To Get A Vending Machine Contract

Simply plugging in your machine anywhere you’d like and letting the money flow your way is a tempting idea, to be sure. But you’re going to have to work out contractual agreements with business owners before placing your machine.

Contracts allow you to place your vending machines in their place of business, but as part of the deal, you’ll have to negotiate what you owe them in exchange. Usually, it comes out to anywhere between 10% to 25% of your gross sales.

Important details you’ll also want to cover include what you will stock, how long the contract is good for, and how often you or an employee will come in to service the machine. Vending machine owners typically assume liability for damages to their machines.

You’ll also want to go over pricing and discuss scenarios in which you may need to charge more for what you sell, such as when certain items you stock become more expensive to purchase.

You and the business owner share a customer base, so it’s best to agree on prices and terms that are advantageous for you both.

Financing A Vending Machine

While it is possible to start slowly using out-of-pocket funds, most new business owners will need a financial helping hand. This is where loans and other financial products come into play.

Can You Really Make Money With Vending Machines?

When you’re starting out in this business, it’s essential to cut through the noise and get to facts.

Let’s face it — vending machine distributors make money off of you regardless of whether you’re successful or not. Who’s to say how much of the potential success you’re told you could enjoy really boils down to marketing tactics and warming you up for sales?

The truth is that you definitely can make a killing in the vending machine industry, but you need to have tempered expectations and be ready to put in the work.

On average, the profit of a single vending machine can range between $35 and $75 a week. Based on those averages, you could see annual profits anywhere between $1,800 and $4,000 a year. Realistically, some of your vending machines are going to outperform others. Some may make as little as $10 a week. Others could rake in $120. Some pros in the vending machine business make $700 a month off of their machines.

Placing your machines in great locations and being aware of what foot traffic is most likely to buy will be the greatest assets in your pursuit of sales. And to scale up your income potential, you need to invest in more and more machines over time.

You won’t get rich quick. It’s a business that will take time to build, and you must have solid people skills to work out advantageous contracts.

You could pay out of pocket for a cheaper machine to start out, or you can try your hand at a financial product to help ease the burden. We’ve researched the best business credit cards with no personal guarantee, for example. We’ve also looked into the best banks for small business loans and best business lines of credit with bad credit.

And as always, before starting your venture, you need to invest time into drafting an effective business plan. We recommend a one-page business plan to start.

Vending Machine Business FAQs