Running a Vending Machine Business

I’m guessing you’ve never even thought about starting a vending machine business before.  And I don’t blame you. It hardly seems like it would be profitable.  After all, how much money can you make selling nickel gumballs and 50-cent bags of chips?

But what if I told you that those innocuous machines you see wherever you go are not just profitable…they may be an absolute gold mine sitting right under your nose.  The vending machine business is a multi-billion dollar industry and it’s only getting bigger.

Just think about it.  People are always on the go and strapped for time.  You may be out running errands and you get hungry or thirsty and need a little something to hold you over until dinner.  In the corner of your eye you spot a snack machine with your favorite corn chips.  Your stomach growls.  In a heartbeat you’re firing quarters into the machine as you lick your lips in anticipation.

This exact same scene plays itself out over and over again all around the world.  And all that loose change adds up for the vending machine’s owner who quietly laughs himself to the bank.

photo credit: David Gallagher

If you’re considering starting your own vending machine business the first thing you need to do is sit down and plan everything carefully.  You don’t want to jump in and start buying up machines before you even have a business plan.

Scout out at least 20-30 potential locations within a reasonable driving distance.  That may seem like a lot but keep in mind that not all of them will work out.  It’s better to keep your options open.  And remember you’ll have to make frequent trips to restock and cash out the machines.  You don’t want to waste all of your profits on gas driving from one location to another.

You’ll want to find high-traffic areas for your vending machines.  There’s no point installing a machine down a dead end or deserted alley that no one walks down.  Per unit profit margins are low in the vending machine business so you need high volume if you really want to make money.

Also keep an eye on the competition.  A location that already has one soda machine probably doesn’t need another one.  But a snack or gumball machine might be a perfect fit.

Buying a Vending Machine

Before you can start making money with a vending machine business you have to actually acquire a machine or two. Prices on new machines can vary from a couple hundred dollars for a small candy or gumball machine to several thousand for larger soda, snack, or coffee dispensing models.  But rather than pay full price for a brand new model you should consider purchasing an older one for a fraction of the cost.  Check out the classified section of your local newspaper to find a deal on a used vending machine.

photo credit: dolescum

Or even better, try Craigslist.  I ran a quick search for “vending machines” and there were dozens of used machines in my local area alone.  Prices were very reasonable and if you don’t mind haggling a bit you can really get a good deal.

The next step is to start contacting businesses in the locations you’ve scouted out.  This can be a bit challenging and you’ll need some people skills to work out a deal.  Most businesses will expect to receive a commission on the sales your vending machines generate so you’ll need to factor that in when calculating the prices you will charge.

For example, you may be planning to sell a bag of chips for only 50 cents.  But if you have to give up a commission of 10 percent you’ll need to increase your price to at least 55 cents to cover it.

Once you reach an agreement you’ll want to get your machine set up pronto.  The sooner it’s installed the sooner it will start making you money.  Visit each of your vending machines at least once every two weeks to refill it and collect money.

Tips for a Successful Vending Machine Business

Start small with just one or two machines.  Once you’re up and running you can use your profits to buy new machines and expand.  The last thing you need is a bunch of expensive vending machines sitting in your garage with nowhere to put them.

Expect vandalism and work it into your financial projections.  You can limit vandalism a bit by choosing high traffic locations in well lit areas but you can never truly eliminate it.

To learn more about running a successful vending machine business  download My Vending Secrets by Chris Robertson.  I haven’t read it myself, but Chris has been making money with vending machines for 11 years so he obviously knows what he talking about.

This post is part of an ongoing series of posts about making money.  To check out the rest of the series go to ways to make money.

And don’t forget to subscribe to my free RSS feed so you won’t miss future installments.

Tagged as: Making Money, starting a business, vending machine business