Vending machines are practically everywhere.
And while you might walk on by them without much thought or even throw in a couple of
bucks to get an ice-cold soda or bag of chips, chances are you probably haven't considered
getting in on the vending machine game yourself.
Maybe you assume that all of the good spots are already taken or that the initial investment
cost might be too high for you to cover, but for those that are looking at starting their
own business or are simply wanting to pick up a lucrative side hustle, there is a whole
lot to love about vending machines.
If starting a vending machine side hustle sounds appealing to you, we’re going to
tell you everything you need to know in this video.
We’ll start with why you may want to consider starting this side hustle in the first place,
particularly in 2022.
Then, we’ll dive deeper and cover the types of vending machines to consider and how to
obtain inventory to keep them stocked.
We’ll also take a look at the logistics of getting the vending machine, obtaining
a license and finding the best location to operate it.
Finally, we’ll break down the profits you could make by getting in on the vending machine
side hustle.
Let’s take a look.
Why Start a Vending Machine Businesses
In the United States alone, there are more than a million vending machines, generating
over $23 billion in yearly revenue.
Getting yourself a slice of this profit requires no special training or skills, and it can
be done part-time, which means it could be a great side hustle to consider.
It’s particularly profitable in 2022 because of the variety of vending machines available
these days.
While they used to purely offer soda and snacks, vending machines have advanced to offer technology
products, ice cream, coffee beverages and even cars.
You can now customize your vending machine offerings more than ever, improving your chances
of standing out and reaching potential customers.
Furthermore, the startup costs of this venture are incredibly low.
Once you've either purchased or rented a vending machine, your overhead costs are going to
be pretty inexpensive.
You don't need to rent out costly retail space or an office to manage your business.
You can easily work out of your garage, basement, or a spare room in your house or apartment.
Besides having a vehicle to restock and service the machines on your route, you're not going
to need any fancy equipment or machinery to get this side hustle up and going.
Then, after you've got yourself a vending machine or two, you can expand your vending
machine business as much as your time and financial situation permits.
And once you've got your machines in place, the only duties that you'll need to keep up
with are restocking and maintaining your machines as needed.
If you can manage that, then the only other thing you'll have to do is collect your money.
When it comes time, collecting your profits couldn’t be simpler.
You just collect cash directly from your machines or receive your payments from the card companies
that handle your machine’s card transactions.
All of these points mean that operating a vending machine business is not only simple
but it also allows for a great deal of flexibility.
Families can even handle the operational duties together.
You can easily train your kids or partner to help you with purchasing your products,
stocking your machines, making bank deposits and keeping track of all of your accounting
data.
Besides having a little bit of startup capital or securing some financing to get your business
going, really, the only other thing that you'll need is a moderate level of physical fitness.
Servicing your machines is going to require you to do a reasonable amount of walking and
heavy lifting – depending on the type of product your machines will be selling.
But the point is, there are few other side hustles out there that you can start with
such low effort.
Types Of Vending Machines
Before jumping in, it’s important to understand the types of vending machines out there and
what you can do with them.
The first to be familiar with is the bulk vending machine, which commonly attracts children
for cheap toys, stickers, gumballs or other loose candy.
These sorts of machines are unlikely to bring in the big bucks overnight, considering how
inexpensive the products are for the consumer, but they generally require very little maintenance
and operate without electricity.
This means they will be an incredibly low cost vending machine for you to start with,
but you’ll need to find a great location for them to make any meaningful income.
Next are Custom Vending Machines, which allow consumers to purchase non-food items.
Think iPhones, laundry products, beauty products, headphones, and sunglasses.
In recent years there have even been machines that sell things like guitar strings, Legos,
books, and clothing items.
This is when knowing your market is critical to your success, because you’ll have to
adapt your product offerings to the local market.
If you live in a city you might have more success selling pricier items than if you
choose to set up shop somewhere more rural.
As long as you can identify your niche, however, the sky is virtually the limit when it comes
to what kinds of products you can sell in your machines.
It's worth noting though that if you're interested in going this route, vending machines for
non-food items can be a bit pricier, so it's best to factor that in when drawing up your
business model.
Next are Food and Beverage Vending Machines, which are the ones that you are probably most
used to seeing.
These machines dispense items such as soda, water, coffee and tea as well as snack foods
like chips, pretzels and candy bars.
In some markets, healthier snacks like nuts and dried fruit are also in demand, so if
you plan on placing your machines in wealthier areas, you might consider offering these and
more gourmet items.
In LA, for example, machines have even been spotted that offer items like caviar, gourmet
cheeses, and escargot.
There are also specialized food and beverage machines that offer products like ice cream,
milk shakes or even full meals.
The more specialized the machine, the pricier your start-up costs will be, so again, you’ll
really need to understand your market to get the most out of your investment.
Securing Your Inventory
You'll need to stock your machine with products that you can purchase at a discounted rate,
which ensures you can resell to customers at a price they’re willing to pay while
still securing profit for yourself..
If your products are too expensive, they're not going to sell easily.
The best way to save on overhead and increase your profit margins is by purchasing products
in bulk directly from the manufacturer.
It's also important to offer your customers recognizable brands that they are already
familiar with.
A vending machine really isn't the place to try and sell items that no one has ever heard
of before.
If you're selling food and beverages, try and get brand-name products to draw in people
as best as possible.
As you stock and re-stock your inventory over a few months, you’ll begin to see which
products sell and which products don’t.
Over time, you can tweak your inventory so that your products move as quickly as possible.
Furthermore, as you become a more frequent buyer or expand to more vending machines,
you may be able to get discounts from your supplier to further boost your profit margins.
Purchasing A Vending Machine
If you are not planning on purchasing a pre existing franchise or vending machine business
– which we'll discuss in just a moment – you will need to acquire one or more machines
so you can get started.
If you're building your business from scratch, it's best to start small.
Used machines are a great way to get started.
You can check platforms like Craigslist, Facebook Marketplace, eBay, or UsedVending.com to find
affordable pre-owned vending machines.
A quick Google search will also put you in touch with local vending machine dealers in
your area.
Basic food and beverage vending machines can be purchased in the range of $1,000 to $3,000
when you buy used or refurbished.
Once you've had success with your used machines, you can always work your way up to flashier
new machines.
But it's good to keep in mind that some newer machines can be quite expensive especially
if they have features like robotic arms, mechanical parts, or touchscreens.
If you're selling non-traditional vending items like electronics, expect to shell out
a bit more for the machines that are best suited for these kinds of products.
New and specialized vending machines can range from $5,000 to $10,000 or more depending on
how unique the machine is.
If you do want to go for one of these nicer machines, there are several financing options
for starting your vending business.
You can either apply for an unsecured or secured loan, short-term business loan if you have
decent credit, SBA loan, or tap into your 401k by looking into a specialized IRS-approved
401k rollover program.
Granted, if you already have a bit of savings, it's always best to fully own your machines
without borrowing money from someone else if you can afford it.
As we touched on earlier, you can also look into purchasing or buying into a preexisting
vending machine franchise or company.
This option will give you instant cash flow.
However, it's important to determine why the previous owner wishes to sell their business.
If you choose to go this route, research extensively the area that the machines are located.
You'll want to also inspect the machines in question in person, examine existing contracts,
and get an idea of just how much business they actually receive.
You wouldn't want to buy someone's vending machine business if it's already tanking.
Obtaining A Vending Machine License
Vending machines normally require their owners to have a license to operate in their municipality
or state.
Before starting a vending machine business, it's crucial that you read up on and understand
these requirements.
If you are required to collect and pay sales tax in your area, you'll also need to acquire
a seller's permit.
And if you’re selling perishable items, like food, you might also have to obtain health
and food permits.
The price of these licenses and permits can vary greatly depending on your location, so
you may want to estimate a few hundred dollars here to collect everything you need.
If you want this business to work long-term, complying with all the legal requirements
is an absolute must.
You can get a good start here by consulting with other vending machine businesses or even
a business lawyer to make sure you’re checking all the boxes.
Finding The Right Location
The last thing to determine is the location for your vending machine.
The best areas will have a lot of foot traffic, such as malls, residential complexes, and
entertainment districts.
Office buildings, colleges, and manufacturing plants are also ideal locations to set up
shop.
Places that have few other food options are great if you're selling snacks and beverages.
Great locations that fit this bill include parks, gas stations without convenience stores,
rest stops, hotels and motels, and even jails.
If these places don’t have a vending machine yet, you’ll be even better off to capitalize
on the profit potentials.
If a place does already have vending machines installed, don't get discouraged.
A little competition can actually be great for business, especially if you're filling
a niche that's not currently covered.
By placing a well-stocked, attractive machine next to an older, dated machine with an entirely
different product line, you can stand out against the competition and attract more business
to your machine.
It's also a good idea when scouting for potential locations to take a peek at crime statistics
to avoid areas with a lot of theft and vandalism.
Damage to your machines can quickly eat away at your profits.
The best locations are highly visible, regularly patrolled, and in view of security cameras.
Potential Profits
So once you do all this, what kind of profit can you expect?
Well, given the low start up and maintenance costs, vending machines can be pretty profitable.
The average machine earns it's owner about $35 a week, but machines that are well stocked
and placed in high-traffic locations can earn substantially more than that.
Some machines make as much as $400 to $500 a month – and if you're able to secure fancier
machines and more profitable products to sell, that number can balloon up into the thousands.
And keep in mind, this is for just setting up a machine and restocking it occasionally.
If you’re able to scale this to multiple machines, you can be earning substantial income
for doing little to no work.
If you want to automate it even further, you can hire someone else to check on your machines
for you, so you can turn this into a completely passive income source.
Of course, if you’re not ready to spend a few thousand dollars on a machine and worry
about the licensing required, this may not be the best side hustle for you.
There’s tons of other side hustles from freelance writing to garage sale arbitrage
that can make you a full-time income with no start-up costs.
Check out some of our recent videos here or by visiting our channel page, leave us a comment
if you have any questions and I’ll see you in the next video.