Earning $4,000 per month with minimal work sounds like a scam… it’s not.. and this source of business is seemingly everywhere. Vending Machines. Malls, grocery stores, and even car shops! They can be a lifesaver if you plan on being somewhere for a while as they can hold drinks or snacks. Imagine how many sales a vending machine filled with water at an amusement park receives on a hot day!
The income you can make from a vending machine varies widely from location to location and the kind of vending machine you have. Tastes continuously change, and you will have to do continuous research to keep your customers happy. Some vending machines make as little as $300 a month, while larger cities in high-traffic areas can make upwards of $4000 a month!
This isn’t something that you should quit your day job for. The amount you make can fluctuate widely and makes for a great side income. It’s a little bit more work than simply buying a vending machine and plopping it down somewhere. You want to research areas that will have a lot of foot traffic and make connections with businesses to work with you and your business.
Step one: Choose the type of vending machine you want to use. While you may think that your two options are snack and drink, there are actually four different types of vending machines. They are:
- Food and Beverage- This type of vending makes up the majority of vending machines. You can buy an exclusive drink or an exclusive food vending machine, or you can buy one that is two-in-one. Rule of thumb is when you are just starting out, pick one genre of vending machine and stick to it until you get used to the trade.
- Bulk- This kind of vending is a low-maintenance and capital option to average vending machines. These could be stickers, temporary tattoos, and gumballs. You can usually find these machines second-hand and $50 or less and can bring in potentially $30 a month. This might not sound a lot, but imagine having ten of these machines making $30 a month, that’s $3,600 a year with minimal work!
- Specialty- These machines exist for specific reasons. They can be laundry related items (detergent/softener at laundromats), retail items (phone chargers and headphones at airports), and even skincare items. There are even vending machines for hot beverages such as cocoa, coffee, and tea, and can be found in colleges, conference centers, and offices.
- Franchising- With this option, you will be a franchisee working under a proven business framework. This allows you to decide how many vending machines you want to invest in. The only thing to keep in mind with this option is that you will be required to pay a portion of your profits to a franchisor.
Step two: Find the perfect location for your vending machine and then draw up a contract. This will require plenty of research as you want somewhere that will have plenty of foot traffic to help bring in potential income. Depending on what vending machine you choose will determine what location you should put it in. If you decide to choose a specialty machine such as a laundry machine that dispenses detergent and softener, it would make no sense to place it in a business office!
At a loss of where you can put your vending machine? Here are some ideas:
- Schools
- Hospitals and medical centers
- Grocery stores
- Airport and shopping malls
- Laundromats
- Apartment complexes
- Manufacturing plants
Once you have an idea of where you plan to place your vending machine, you will need to secure your spot at the venue. You can either cold call, build a relationship with the owner, or visit your local Chamber of Commerce to find more large businesses.
When you have a place (or a few) in mind, you can then reach out to the manager about setting up a contract. If you talk to them more, you can even find out some of their specific needs. Having an idea of local demand will help you keep your machine supplied with items that people will want!
Each state will have different rules and regulations you will need to abide by. Again, you can contact the Chamber of Commerce again to find out what these are in your area.
You will also need to be aware of what percentage you need to pay the proprietor for housing your vending machine. Typically, this will be between 10% and 25% of the revenue you earn from your vending machine. Writing up a contract between you and the proprietor will keep both of you protected and should include the contract length, compensation rate, and any other terms.
Step three: Buy the machine. Now that you’ve determined what kind you want and where you can place it, it’s time to find the perfect one! There are a few different seller avenues you can look at when beginning your search.
- Manufacturers or wholesale vending suppliers- This avenue usually has the largest selection of machines and the most services for delivery, repair, and training. While it can be the most helpful in multiple ways, it is also the most expensive. You can expect a minimum order of multiple machines or other fees that will likely be used toward machine servicing.
- Secondary market sellers- These types of sellers usually allow you to look through various brands and models of vending machines and sometimes offer resources for business owners.
- Consumer-to-consumer platforms- Examples of this type of platform are sites such as Ebay and Craigslist. If you look for a vending machine, you can probably find thousands of different options. Even better, you can filter for something closer to your area to avoid expensive shopping costs. This can be a great option for first time buyers who can’t afford thousands of dollars for a vending machine.
If you are just starting out, it’s probably better to avoid any extra bells and whistles as this can add to the overall cost.
Step four: Fill your vending machine with goodies. This is the fun part! You should have decided on a general idea of what you want to fill your machine with, so now it’s time to pick specifics. Try to keep a small selection at first with items that are tailored to the area you place your vending machine and gauge how well the items do. You can keep inventory and see what items fly off the shelves and what doesn’t.
For this example, we are buying a 250 count bag of gum balls every three months for $7. Each month, we make $21 in profit. By the end of the year, we will have made $224 after deducting the cost of all the gumballs. Repeat this with nine more machines and you will have made $2240 in one year!
Step five: Seek financing if you need it. Let’s be real- not everyone has a few grand lying around to take the plunge in starting a business. If you don’t have the dough up front, you can seek various loan options.
Step six: Keep up on routine maintenance. You will have to be sure that the vending machines stay stocked and cleaned on a weekly or biweekly basis. It’s also a good idea to leave a number where you can be contacted if needed. Be sure to empty the machine regularly to get an idea of what profit you are making weekly.
Tips
Buying more vending machines is a great way to drive up more income. As a beginner, you can have one to see how it goes and as you become experienced, you can add more to your arsenal.
You want to be sure you are making a profit while still having reasonable prices. You can charge double for what you bought it for and still make money.