two ladies smiling, operating vending machines

How to Start a Lucrative Vending Machine Business (2024)

Are you looking for a profitable side hustle that you can start with little capital?

Whether you’re in the wintry snows of Europe, or the hot afternoons in the tropics of Africa, a vending machine business is one of such side hustles that can make you passive income.

In this article, I’ll show you how to start a profitable vending machine business from scratch.

Key Insights

1. Vending Machine Business is a profitable venture that can give you passive income.

2. It is not a get-rich-quick scheme, and patience is needed to make profits. But it pays handsomely if you keep at it for up to a year.

3. Getting a good location for your machine is one of the most important factors that determines success in this business.

4. You should think about how long you can sustain your machines without profits before deciding to start your own vending business.

The Vending Machine Business Model

Vending machines are designed to automatically dispense consumer goods like snacks, candy, soda, water, and the like. Therefore, you can place them in a bubbling location where those goods are in demand, and have a system that automatically sells for you, even in your absence.

There are a handful of parties involved in this business model – the maker of vending machines, distributors, machine owners, location owners, and consumer goods suppliers.

But today, we’re focusing solely on the person who wants to get a vending machine to sell fast moving consumer goods in a favourable location.

Is Vending Machine Business Profitable

You may be wondering if starting a vending machine business is worth it. Well according to vending locator, the success rate of vending machines is above 80%

On the average, a single vending machine can make $50 per day.  The industry as a whole was valued at USD 51.91 billion in 2021, and has been growing at a rate of 2.4% every year.

Clearly, vending machines are a good business.

Benefits of vending machine business

Starting a vending machine business has many advantages that cannot be found in some other business models.

Some of its benefits are:

1. Saves Time

You don’t have to spend long hours everyday attending to your business. All you need to do is set it up, and dedicate a few hours to ensure it runs smoothly.

This offers you time to do other things that are important to you.

2. Little Work is Required

Just as it requires less time, there’s also less work to do. You only need to stock up your machine before it runs out of consumer items, collect coins/cash (depending on the type of vending machine), record your daily sales, and ensure the machine is running smoothly.

As you grow, you could even decide to pay someone to do some of those tasks for you.

3. You Can be Your Own Boss

This is one benefit that comes with owning a business. You get to make the important decisions and move the business in whichever direction you wish.

3 Things to Consider Before Getting Started

1. What are the disadvantages of vending machines

No business is a bed of roses. Every type of business has its downsides and challenges that you must overcome if you want to make profits.

Some downsides of starting a vending machine business include.

a. Takes time to get profits.

Although it’s a good side hustle, which can even be turned into a full time business once it’s profitable, it is not a get rich quick scheme. Quite the contrary, it’s more like an investment.

After the initial startup cost and recurring monthly expenses needed to run the business, it can take up to a year or more before you start getting profits. You have to consider how much the vending machine costs, and how long it will take for it to pay for itself.

b. Risk of losses

Every business has risks attached to it, and vending machine business is no different. You have to accept the fact that you may incur losses from things like vandalism and theft. On a few occasions your machine may malfunction and would require repair.

c. Power supply and cellular connection

Most vending machines require electricity and internet connection to function. Though there are newer models that use solar power supply, that is not the norm.

Therefore, you should consider how you’ll power your vending machine and keep it connected for active hours, which could be 24/7 in an area with high demand.

2. How long can you run the business without profits

As stated earlier, it usually takes up to a year or more before you start seeing profits. Before deciding to go in, it’s good to forecast how long it will take you to regain your initial investments, and whether or not you can stay patient long enough.

You can do that by estimating how much profit your vending machine will make monthly in your chosen location. If it’s going to take too long, and if you can’t wait, then perhaps you shouldn’t go in, as you might end up losing thousands of dollars in the long run.

3. Running costs and maintenance

It’s not enough to buy a vending machine, get a favourable location, and start the business. You’ll need to stock it up, and maintain the machine regularly.

You’ll need a skilled person to initially install the vending machine, and it’s advisable to have contacts of people who can quickly fix it if you run into any troubles, so you don’t get caught off guard.

How to Start a Lucrative Vending Machine Business

Follow the steps below to start a lucrative vending machine business.

1. Market Research

This is crucial if you want to succeed in this industry. Some people go into it blindly, only dreaming about how much they’ll make and all the wonderful things they’ll buy, without thinking critically about the risks and challenges they have to overcome.

You must scout the area where you want to locate your business. Answer questions like

  • Are there enough people who will use a vending machine in this location?
  • What type of consumer goods are they interested in?
  • Is there a more convenient way for them to get what they need?
  • Are there other vendors in the area?
  • Is the location secure, or is it prone to theft and vandalism?

Market research lays a strong foundation for a successful vending machine business, and all the other steps depend on it. If you miss it here, it will be hard to get the profits that make this business worthwhile.

2. Get a Location

Identifying a prime location for your vending machine is one thing, securing the location for yourself is another. Some of the best places to mount your vending machine are public squares, airports, waiting areas like bus and train stations, large hospitals and healthcare facilities, and schools.

You need to have an understanding with the owner of the property where you want to place your vending machine, and you might have to pay a fee.

3. Let Your Location Determine the Type of Vending Machine

When picking a vending machine, don’t look for the most popular type, or the fanciest. Think of what will best serve the kind of people in your chosen location.

Generally, snack and beverage vending machines tend to do better. Other types are coffee vending machines, frozen vending machines, and there even vending machines for gadgets like earphones.

One important thing to keep in mind is that the best vending machine for you is the one that best serves the people in your chosen location. The one that can stock up what is in demand, and accept the common type of payment in your area – whether coin, cash, or credit cards.

Further, if you’re to place your machine indoors, then the size is important. You need to know the dimensions of the room, so you don’t buy a machine that won’t fit in.

4. Create a Business Plan

Some people might consider this step to be unnecessary, but it’s good to do it if you want to create a lasting business. It’s especially important if you need support from people to invest in your business, or if you want to acquire a loan. Also, it helps you think long-term and keeps you accountable throughout the lifecycle of your business. You’ll easily notice when you’re falling short of your target revenue.

Your business plan is a document that shows you’ve done due diligence in your market research. It shows what your business will offer, where your vending machines will be, the people you’re expecting to attract, how much you expect to make each month and over the coming 2 to 5 years.

5. Get the Machine

This is what will cost you the most when you start your vending machine business. Based on your budget and choice of location, you can decide to get one or multiple vending machines.

There are combination machines that can sell both snacks and beverages, there are those dedicated to only snacks, and also the ones dedicated to only beverages.

The cost of vending machines range from $2,000 to over $10,000. It could take 15 to 20 business days to install a machine if you’re dealing with a supplier like Vending Group.

If your budget is on the low side, you can buy used vending machines from online platforms like eBay and Craigslist. Ensure you get a machine in good shape though, so you don’t spend more than you anticipated on maintenance.

Screenshot of machines for sale on ebay to help you start your vending machine business

 

Generally, it is better to get the best quality when you can, because the cost of maintaining a bad machine when added over time can be way more than that spent on buying and maintaining a good one.

Some of the best manufacturers are Dixie Narco, Royal Vendors, and Vendo.

6. Fill the Machine with In-Demand Products

Note that the best thing to sell via your vending machine is what the people in that area want the most. Despite good market research, you might still have to go through some weeks of trial and error before you figure out what people buy the most. For some, it could be snacks, for some it could be beverages like Coke, Pepsi, or even water.

You can start out with the items you discovered during your market research. If it sells, awesome. If not, try a few variations in your inventory, notice the patterns, and make changes until you hit what works in your location.

7. Get Customers

The most important thing in the success of a vending machine is its location.

Still, you can inform people in the area that there’s a new site where they can easily get snacks and beverages or whatever they need. You can put up a sign directing people to your location.

If you run a chain of vending machines, you can consider marketing your business online to the local community.

Important Things To Keep In Mind For A Profitable Vending Machine Business

I found this post, from someone with years of experience in the vending business, on Quora.

Some tips to keep in mind;

  • Learn basic maintenance, so you spend less on minor issues you could fix yourself.
  • Your business doesn’t have to be static. If you find a better location, move your vending machine.
  • Instead of refilling a machine multiple times in a day, you could get another one for a hot location.
  • There are loyalty programs from suppliers of consumer goods that could give you valuable discounts.

Frequently Asked Questions About Vending Machine Business

Is there a demand for vending machines?

Yes. But it’s highly dependent on your location. Data shows that more than 100 million Americans use vending machines every day.

Is it hard to maintain a vending machine? 

In case you’re wondering if vending machines are high maintenance equipment, the short answer is no. It doesn’t require much to maintain a vending machine, except it develops a major fault, or is destroyed by vandalizers.

Do vending machines use a lot of electricity?

Most vending machines require electricity to function. Typically they consume 4 – 6kWh/day. These machines are energy efficient and are fair on your electricity bill.

How many items do vending machines hold?

It’s a wide range, which depends on the type of machine, and the type of snack or beverage you sell. Vending machines can hold as little as 60 to 100 items, or as high as 600 to near 1000 items.

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Conclusion

Vending machine business is a good side hustle you can start while maintaining a job. It is lucrative, requires less time and energy to run, but it’s not a get-rich-quick scheme, and can take as long as a year before you see any profit.

One of the most important things for success in this business is the location. Therefore, it is crucial that you do market research diligently before going in, so you can choose the best location, the best vending machine, and the best items to sell.

 

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