What is Passive Income?
1
Characteristics of passive income
1b
What is a vending machine?
2
History of vending machines
3
What is vending machine business?
4
Types of vending machines
5
Who can start a vending machine business?
6
Examples of vending machines
7
Specialized vending machines
7b
Examples of successful vending machines users
8
Importance of vending machines
9
How to start making passive income with vending machines
10
Steps to starting your vending machine
10b
How to choose the right vending machine equipment?
11
Critical questions you should ask yourself before starting a vending
machine business
12
Where could people go to purchase their first vending machines?
13
Top vending machine companies- How to get vending machine
13b
The best locations for vending machines
14
What does a typical day look like when you own a vending business?
15
How often will I need to service my vending machine?
16
Do I need a truck or large vehicle to service my machine?
6b
What type of licensing, paperwork and insurance will I need
16c
Factors that make vending machine business a lucrative investment
17
Security measures of a vending machine
18
Conclusion
19
Vending machine
income is passive income, which
means that it is income a
business owner earns without
actively managing the asset
generating it. Passive income is
earnings derived from a rental
property, limited partnership, or
other enterprises in which a
person is not actively involved.
The real pull of a vending
machine business is its ability to
generate passive income. Those
machines don’t care that you are
sleeping, walking your dog, or
sunbathing, they will keep
cranking out sales day after day
and week after week.
Characteristics of passive income
•
•
•
•
•
•
•
No active involvement
Maximizing returns
Short term trade-offs
Early retirement
Long term decision
Effort goes down
Profits goes up
Although the word “passive” makes
it sound like you have to do nothing
to bring in the income this just isn’t
true. Passive income streams
require an upfront investment and a
lot of nurturing in the beginning.
After some time and hard work
these income streams start to build
and are able to maintain
themselves, bringing you consistent
revenue without much effort on
your part.
A vending machine is a machine from
which products are sold. The customer
puts money in a slot, selects a product
from the menu and the product is
dispensed from the machine.
It is an automated machine which is intended to provide
the users with a diverse range of products: snacks,
beverages, pizzas, cupcakes, newspapers, and tickets. A
vending machine dispenses a product to the users based on
the amount of money inserted and selection of the product.
Retail vending machines are placed outside the store,
allowing customers to purchase items from its collection
without having to go into the store and most vending
machines handle only cash transactions.
During the early 1880s, the first commercial coin-operated vending
machines were introduced in London, England. The machines were
commonly found at railway stations and post offices because they
were convenient for purchasing envelopes, postcards, and notepaper.
In 1883, Percival Everett was the first man to introduce a modernised
vending machine, which dispensed postcards. His vending machine
became very popular and was soon after installed at railway stations
and post offices.
In 1887, the first vending machine servicer, the Sweetmeat
Automatic Delivery Co., was founded. The next year, the Thomas
Adams Gum Co. introduced the first vending machines to the United
States. They were installed on the elevated subway platforms in New
York, New York, and sold Tutti-Fruiti gum. In 1897, the Pulver
Manufacturing Co. added illustrated figures to its gum machines as
an extra attraction. The round, candy-coated gumball and gumball
vending machines were introduced in 1907.
Machines dispensing drinks go as far back as 1890. The first beverage
vending machine was in Paris, France, and allowed people to buy
beer, wine, and liquor. In the early 1920s, vending machines started
dispensing sodas into cups. Today, beverages are among the most
popular items sold through vending machines.
In 1926, American inventor William Rowe invented the cigarette
vending machine. Over time, however, they became less common in
the United States due to concerns over underage buyers. In other
countries, vendors required that some sort of age verification, such as
a driver's license, bank card, or ID, be inserted before a purchase
could be made. Cigarette dispensing machines are still common in
Germany, Austria, Italy, the Czech Republic, and Japan.
Simply put, a vending machine business is where you
own or rent a vending machine and place them in ideal
locations. Customers, who are in the area, have the
option to purchase a variety of goods from your
vending machine without you, the proprietor, ever
being present.
When researching the profitability of a vending
machine business, some may be surprised to learn that
the vending machine industry in the US produces over
23 billion dollars in annual sales. Because of the
profitability, low start-up costs, versatility, and handsoff nature of the business, vending has become an
enticing business model for entrepreneurs looking for
their next business investment.
If you are looking to invest in a vending machine business
there are 3 main types of business models to choose from:
1.
Buy an Existing Vending Machine Business
The first option is to buy an existing vending machine
business. This is an easy way to walk into a business that has
the potential to be profitable from day one.
That said, it is extremely important to do your due diligence.
Prior to buying, you want to understand why the owner is
selling. Make sure to get some hard numbers on the costs
and profitability of the current business. Find out what the
status is on location and supplier contracts, which may or
may not be expiring. Lastly, take some time to make sure the
machines are in good working order and are functioning well.
The main advantage of buying an existing vending business is
you’d have a business that is already generating sales. Also,
keep in mind that much like real estate, location is incredibly
important in the vending machine business, so you may be
stepping into some prime areas
2.
Buy a Vending Machine Franchise
Another option is to buy a vending machine franchise. When
you purchase a vending machine franchise, you are also
buying the systems and procedures of a company that
already has experience in the business. This means that you
start with a clear framework from day one. Typically, you
would need to attend a training session(s) that teaches you
the procedures of every step of the process outlined by the
franchise owner.
Buying a franchise would require more commitment of
capital upfront. This would be similar to purchasing a fleet of
vending machines. The advantage of buying into a franchise
is that you inherit the operational procedures of an already
existing business, which help make the business turnkey.
However, there are often significant up-front costs associated
with buying a franchise and additionally, you may have to pay
the franchisee a monthly fee or a portion of your business
profits.
It's important to have the legal paperwork reviewed carefully
whenever you are buying a franchise opportunity. The
franchisee will typically have strict rules and standards of
procedures that would need to be followed exactly, which
might take away from the freedom that a vending machine
business could allow for. Some of these restrictions could
include where you get your machines and products.
3.
Start Your Own Vending Machine Business
The last option to consider is to start your own vending
machine business. This requires the most thought about
what kind of product you want to stock in your vending
machine and which locations you want to target.
But there is good upside potential if you can find a strong
match between a solid location and a vending product that
would have high demand in that location.
For example, if you discovered a popular health gym
without a vending machine nearby, you could fill the need
for healthy vending machine items like protein bars and
potentially have a winning business on your hands.
Anyone can start a vending machine business. You do need
some startup capital but one of the advantages of this type of
business is that startup costs can be low.
A good candidate for a vending machine business is
somebody who can work flexible hours because machines
need to be checked and re-stocked periodically. Since finding
the correct location is important, you should also feel
comfortable cold-contacting business owners and selling
them on the benefits of adding a vending machine to their
location.
Change machine
A change machine is a vending
machine that accepts large
denominations of currency and returns
an equal amount of currency in smaller
bills or coins. Typically, these machines
are used to provide coins in exchange
for paper currency, in which case they
are also often known as bill changers.
Cigarette vending
A cigarette vending machine is a
type of vending machine that
dispenses smoking products, like
cigarettes, and cigars. This
machine often dispenses cigarette
packs containing 16 to 18
cigarettes.
In the past, cigarettes were commonly sold in the United States
through these machines, but this is increasingly rare due to concerns
about underage buyers. Sometimes a pass has to be inserted in the
machine to prove one's age before a purchase can be made
.
Since 2007, however, age verification has been mandatory in
most countries and buyers must be 18 or over. The various
machines installed in pubs and cafés, other publicly accessible
buildings and on the street accept one or more of the
following as proof of age: the buyer's identity card, bank debit
card (smart card) or driver's license.
Safe sex and health products vending machine
The main goal of the machine is to
provide students with cheaper access to
birth control products, such as condoms
or emergency contraceptives. The
vending machine sells birth control
products, condoms, pregnancy tests and
school supplies such as note cards.
They are often placed in public toilets,
subway stations, airports or schools as a
public health measure to promote safe sex.
Many pharmacies also keep one outside,
for after-hours access. Rare examples exist
that dispense female condoms or the
morning after pill.
Food and snack vending machines
Food vending machines
provides shelf-stable foods
such as chips, cookies, cakes
and other such snacks are
common. Some food vending
machines are refrigerated or
frozen, such as for chilled soft
drinks and ice cream treats,
and some machines provide
hot food.
Various types of food and snack vending machines
exist in the world. Some unique food vending
machines exist that are specialized and less common,
such as the French fry vending machine and hot
pizza vending machines, such as Let's Pizza. The
Beverly Hills Caviar Automated Boutique dispenses
frozen caviar and other high-end foods.
Bulk candy and gumball vending
Bulk vending is the sale of unsorted
confections, nuts, gumballs, toys and
novelties (in capsules) selected at
random and dispensed generally
through non-electrically operated
vending machines.
Gumballs and candy have a relatively
long shelf life, enabling vending
machine operators to manage many
machines without too much time or
cost involved.
In addition, the machines are typically
inexpensive compared to soft drink or
snack machines, which often require
power and sometimes refrigeration to
work.
Bulk vending may be a more practical choice than soft
drink/snack vending for an individual who also works a full-time
job, since the restaurants, retail stores, and other locations
suitable for bulk vending may be more likely to be open during
the evening and on weekends than venues such as offices that
host soft drink and snack machines.
The bulk vending machines of today provide many different
vending choices with the use of adjustable gumball and candy
wheels.
Adjustable gumball wheels allow an operator to not only
offer the traditional 1-inch gumball, but they can also vend
larger gumballs, and non-edible items such as toy capsules
and bouncy balls. Adjustable candy wheels allow an
operator to offer a variety of pressed candies, jelly candy,
and even nuts.
Full-line vending
A full-line vending company may set up several types of
vending machines that sell a wide range of products.
Products may include candy, cookies, chips, fresh fruit,
milk, cold food, coffee and other hot drinks, bottles and
cans of soda and other drinks, and even frozen products
like ice cream. These products can be sold from
machines that include hot coffee, snack, and cold food.
In the United States, almost all machines accept bills
along payment from traditional debit and credit cards, or
a mobile payment system. This is an advantage to the
vendor because it virtually eliminates the need for a bill
changer. Larger corporations with cafeterias will often
request full line vending to supplement their food
service.
Photo booth
A photo booth is a vending machine or modern kiosk
that contains an automated, usually coin-operated,
camera and film processor. Today, the vast majority of
photo booths are digital. Photo booths contain a seat or
bench designed to seat the one or two patrons being
photographed.
The seat is typically surrounded by a curtain of some sort
to allow for some privacy and help avoid outside
interference during the photo session. Once the payment
is made, the photo booth will take a series of
photographs and the customer is then provided with
prints.
Stamp vending machine
A stamp vending machine is a
mechanical, electrical or electromechanical device which can be
used to automatically vend
postage stamps to users in
exchange for a pre-determined
amount of money, normally in
coin.
Ticket machines
A ticket machine is a
vending machine that
produces tickets. For
instance, ticket machines
dispense train tickets at
railway stations, transit
tickets at metro stations and
tram tickets at some tram
stops and in some trams.
The typical transaction consists of a user using the display
interface to select the type and quantity of tickets and
then choosing a payment method of either cash,
credit/debit card or smartcard. The ticket or tickets are
then printed and dispensed to the user.
Specialized vending
machines/ modern day
vending machine
From 2000 to 2010, the specialization of vending machines
became more common. Vending extended increasingly into
non-traditional areas like electronics, or even artwork or
short stories. Machines of this new category are generally
called Automated retail kiosks. When using an automated
retail machine, consumers select products, sometimes using
a touchscreen interface, pay for purchases using a credit or
debit card and then the product is dispensed, sometimes via
an internal robotic arm in the machine.
The trend of specialization and proliferation of vending
machines is perhaps most apparent in Japan where
vending machines sell products from toilet paper to hot
meals and pornography.
Automobile vending machine
In November 2013, online auto retailer Carvana opened the
first car vending machine in the U.S. located in Atlanta.
In late 2016, Autobahn Motors, a car dealership in Singapore,
opened a 15-story-tall luxury car vending machine containing
60 cars, dispensing Ferrari and Lamborghini vehicles.
Bait vending machine
A bait machine is a
vending machine that
dispenses live fishing
bait, such as worms and
crickets, for fishing.
Book vending machine
Book vending machines
dispense books, which may
be full-sized. Some libraries
use book vending machines.
Go Library is a book lending
vending machine used by
libraries in Sweden and the
U.S. state of California.
French fry vending machine
A French fry vending machine is a vending machine that
dispenses hot French fries, also known as chips. The first
known French fry vending machine was developed circa 1982
by the defunct Precision Fry Foods Pty Ltd. in Australia. A
few companies have developed and manufactured French fry
vending machines and prototypes. Furthermore, a prototype
machine was also developed at Wageningen University in
the Netherlands.
Pizza vending machine
Let's Pizza is the name of a
vending machine that makes
fresh pizza from scratch. The
machine combines water,
flour, tomato sauce, and
fresh ingredients to make a
pizza in approximately three
minutes.
It includes windows so customers can watch the pizza as it is
made. The pizza is cooked in an infrared oven. The device
was invented by Claudio Torghele, an entrepreneur in
Rovereto, Italy. The vending machine began in Italy and is
now spreading into the United Kingdom and becoming
popular there.
Orange juice vending machine
The fresh-squeezed orange juice
contains fresh oranges and a
mechanism to cut and squeeze
them on order to produce fresh
juice.
Marijuana vending machine
A marijuana vending machine originally found a niche
market as a vending machine for selling or dispensing
cannabis. Marijuana vending machines (also known as
cannabis vending machines) today are widely diffused, and
sell a wide range of cannabis, hemp and CBD-related
products that starts with the THC-based cannabis flowers in
countries where the legislation allows cannabis
consumption, Products includes, hemp and CBD oils,
tinctures and infusions, hemp-based food products, cannabis
edibles, CBD cosmetics, hemp beers, sodas and teas, smoke
paraphernalia and more.
The first experiments in distributing marijuana through
vending machines started in the early 2010s. The primary
challenge faced in selling restricted or controlled
merchandise like cannabis is to verify the identity of the user
in front of the vending machine making the purchase. This is
overcome by the application of biometrics and smart
vending software technology, the same technology used to
verify the buyer's age in the automatic sales of tobacco.
Social-networked vending machine
With the rise of the social networks, vending machine has
been integrated to social media in order to proliferate the
interaction of the vending machine with the users from the
physical machine to the social networks. The common
application of social-networked vending machine is that
the user can connect his/her social account to a specific
social media designated by the vending machine, the user
will be getting some rewards in return, normally in the form
of free gift dispensed from the vending machine.
Prize vending machine
This type of machine sells a
container that may contain a
prize. Some such machines
advertise the possible prizes that
may be won. Examples include
smart phones, holiday packages,
and toys.
The pandemic has boosted
interest in vending machine
ownership. But just how
lucrative is the business?
Most vendors we spoke with noted big differences in revenue
across their own machines.
Everett Brown
“I have one machine that
does $25 every 2 weeks, and
another that does $600,” says
Everett Brown, a 32-year-old
Lyft driver from Minneapolis
who vends part-time. “Every
location is different; some
places suck, and others are
gold mines.”
Jaime Ibanez got into vending in
2018. Fresh out of high school, he
dropped $2.5k — about half his
savings — on a refurbished snack
machine and found a home for it at
a local barbershop in Dallas.
Jaime Ibanez
Today, he owns 35 machines that
gross $10k in revenue every month.
His best location, a hotel, earns him
$2.8k; his worst sometimes only
sees $200.
The COVID-19 boom
Barry and Lori Strickland, a married
couple in San Diego, run The
Vending Mentor. Their journey into
vending began back in 1989, when
Barry then an old special education
teacher bought a few machines to
make extra income during the
summer.
Barry and Lori Strickland
Since the pandemic, (covid-19) the Stricklands say they’ve
seen a huge uptick in interest. According to the Stricklands,
200 vendors have signed up for their course this year and a
lot of blue-collar workers are realizing their jobs are not as
secure as they thought they were before. Tons of people
have lost their jobs, or had hours cut, and are turning to
vending to take things into their own hands.
He also said that vending machines are relatively safe
compared to food prep because there isn’t as much human
contact. It’s also a business that a lot of people consider to be
recession-proof. In particular, the Stricklands have noticed an
uptick in Black and Latino vending machine owners, a trend
they attribute to accessibility and relatively low startup costs.
Among them is Jalea Pippens, the phlebotomist from
Detroit.
“The pandemic made us into
entrepreneurs,” she says. Over the
past 3 months, Literally Lit has
grown to encompass 15 machines
all over Metro Detroit. Recently,
they landed their biggest deal yet:
5 machines at a steel
manufacturing warehouse.
After buying her first machine 3 months ago, she launched
Literally Lit Vending with her boyfriend (a nurse), and his best
friend.
Collectively the machines now bring in $4k in monthly
revenue. She further said that she used to see a vending
machine at the hospital and would spend at least $5, but now
she is on the other side, collecting the bills.
Vending machines are convenient and they allow your
employees and even clients and customers to get what they
need in a time and cost-saving manner. Vending machines
have good prices on them and they are always convenient
when they are in the right location. They are good because
they give consumers the ability to purchase food and other
products quickly, with no lines. There are a wide range of
items to choose from and have the advantage of being easy to
manage. It’s no wonder that many businesses find that
vending machines are an ideal solution to support workplace
satisfaction.
Most organizations want a vending machine that isn't just
convenient for their staff and consumers but is convenient for
their business too. One of the major advantages of supplying
vending machines rather than round the clock canteens, is they
are less of a burden on facilities budgets and site space. But
vending machines are helpful in other ways too.
1. Low overheads
Vending machines require no staff, which means no extra
wages to pay. It also means you don’t have to pay any other
of the other costs associated with employing staff. Based on
average UK salaries, businesses can save as much as £30k a
year by using a vending solution, rather than fully staffing a
canteen.
Then, you need to consider the cost of running a canteen.
Vending machines, despite being able to run 24 hours a
day, only use a small amount of electricity to run.
Altogether, this means lower overheads for your
organization.
2. Vending machines are easy to manage
Once installed, a vending machine needs little to no
maintenance. Particularly when you adopt an ‘operated’
vending model, ensuring your shelves are regularly refilled
with the best-sellers. Payment options are becoming more
streamlined with solutions including contactless payment
and Apple pay, making it even easier to grab a snack on the
go.
If you use a managed vending service, the task of filling and
looking after your machine is unburdened. You can rest
assured that it’s being taken care of by a professional team,
with insight into what people in your demographic really
want to eat and drink.
3. Keeps staff onsite
Options for onsite food and drink means your staff can stay in
the workplace. This helps you maintain your duty of care and
ensures optimum productivity. If your business is located far
from the shops, vending machines provide an essential service
to your workers.
Keeping your staff onsite also provides you with more
opportunities to engage them in lunchtime activities that can
help boost morale and employee engagement. When travelling
for food is reduced to zero, your staff have more time to relax,
socialize and recharge. And better employee engagement leads
to 26% better profitability.
4. Vending machines can make money
Vending machine activity is very dependable. Partner this with
their low overheads and you may find that your vending
machine is a useful revenue stream. You must also consider
the savings you make on not having to run a canteen or
provide snacks and drinks yourself.
5. Fed employees = happy employees
We all love food. It’s one of life’s great pleasures, as
well as being essential fuel for hard workers.
Having easy access to food and drink makes your
employees feel happy and engaged. They feel like
they are well looked after.
And they work their best when they know that you care
about their wellbeing. With access to a vending machine,
they’re able to re-energize and recharge which means
happier and more productive workers.
6. Help support their lifestyle goals
Your vending machine should be stocked with the foods your
staff want. This includes chocolate, crisps and sweet drinks for
those deserving a treat. But it can also include a range of
healthy options for those who are focused on maintaining a
responsible and balanced diet.
More millennials in the workplace results in an increase in the
number of health-conscious employees. You can support their
needs by offering healthy snacks conveniently. This means
they’re less likely to stress over snacking, because snacks are
available that are appealing to them.
Promoting a healthy workplace is a vital element of
company culture. Many prospective employees
consider a healthy workplace as a positive thing.
People enjoy working in environments that feel
personal to them.
7. Vending machines help people optimize
their lives
It can take up to 6 minutes to get a coffee at the coffee shop.
This doesn’t include the time it takes to leave your desk and get
over there. The result is a loss of precious hours that your staff
could be spending getting work done. Grabbing a latte from
your coffee vending machine can take as little as 20 seconds!
Vending machines can help you optimize your life and make
your working day much more productive. They also serve as
gathering points, so you can socialize and relax while you
stretch your legs. Micro-breaks like this can improve your
staff’s productivity more than you might think.
8. Work smarter, not harder
Vending machines give you the flexibility to work in a way that
suits you best. Canteens with strict serving times can restrict
productivity. They can disrupt meetings, break the creative flow
and waste valuable lunch break time journeying to and from.
With food and drink available at a
moment’s notice, 24 hours a day,
your staff can build their day
around their personal needs.
When you’re just starting out in the vending machine business,
you can’t go wrong with food and beverages. According to
Vending Market Watch’s 2019 annual report, food and beverage
vending make up the majority of vending market share in the US.
Because there are so many options for food and beverage
vending, it’s often wise to start out with a single specialty and
learn as much as you can about the business that way. Focusing
on a single niche like healthy snacks ensures you are targeting
your efforts and not taking on too much, too quickly. Choosing
the right products for your vending machine business is crucial
for your success.
With low overhead costs and high profit margins, the vending
machine business provides exciting opportunities for new and
experienced entrepreneurs. Starting a vending machine
company takes research, planning and maintenance like any
new business, and getting started is relatively simple. Below
are steps to guide you on how to finance and operate your
own vending machine company.
If you’re looking for a versatile business model, you might
consider starting a vending machine business. Starting a
vending machine business can be a profitable enterprise, and
you don’t need any special skills or training to get started.
From finding the right location and equipment to perfecting
your customer service skills, there are several key steps to
take when starting your vending machine business
1. Do your research
Before starting a vending machine business, you need to
spend some time researching the industry. The research
covers the cost of machines and stocks, what you want to sell,
who is your target market, how much can you charge your
customers, the startup and ongoing costs of the business,
and the name of your business. Its a good idea to come up
with a business plan before moving forward in order to verify
the feasibility of your business.
Perhaps you’ve done a little homework and you think the
vending industry might be the right fit for you. Maybe
vending sparked your interest because you heard it has less
overhead, no rent or electricity bills, and more flexibility than
businesses in other industries. Perhaps you like the idea of a
permanent escape from the office where you can interact
with your neighbors and make an impact on your community.
However, before you continue down the wrong path, it’s
important to know why you want to get into this business.
The last thing you would want to do is invest a lot of time
and money, and then suddenly realize that you made the
wrong decision because it doesn’t actually align with your
long-term goals.
2. Decide what you want to sell
When you are satisfied with your research and business plan,
it is now time to determine the types of products you want
to sell in your vending machine business. Hopefully, you got
some ideas for this while doing your market research.
Beverages like water, juice, and soda will usually sell well in
any market. However, there is a growing demand for vending
machines that offer healthy and organic snacking options.
You can consider selling hot drinks, like coffee and tea, CBD
products, Dog treats, Toiletries and personal hygiene
products in your vending machine
3. Pick the location
Choosing the right location is crucial. If you choose a market
that’s already oversaturated with vending machines, this will
impact your ability to earn a profit. When choosing location,
Look for areas with a lot of foot traffic, like shopping malls,
hotels, or bus stations. And make sure the location you
choose is a good fit for the type of products you’re selling.
For instance, you probably wouldn’t want to set up a vending
machine selling soft drinks in a health food store.
4. Getting a Hold of the Place
Irrespective of where you intend to place the machine, mutual
understanding with the owner of that place is a must. If you
are lucky enough, you may get a place for your machine for
free, or for a nominal share of the profit. Whatever deal you
strike, it is always better to have an understanding between
you and the other party on paper as doing so will rule out
legal issues, which may crop up if differences occur at any
point in the future.
Target Customers
Location will also depend on who your target customers are. A
little research will always work in your favor. Today, almost
anything can be sold through a vending machine — soft-drink
cans, gum, hot coffee, cold coffee, cigarettes, even hot dogs
and pizzas.
5. Find the equipment
Now that you know what you’re selling and where it’s time to
find the equipment for your new venture. The first thing
you’ll need to decide is whether you want to buy or lease the
vending machines. If you choose to lease the vending
machines, this could make the upfront investment more
affordable. And the vendor will restock the machines and
make any necessary repairs for you. However, you’ll have to
share any profits you make with the vendor.
If you want more control over your business, you can purchase
the machines yourself. When you own the equipment, you can
set your own prices, earn a greater percentage of the profits,
and have more control over the service you’re providing to
customers.
Research Before Purchasing the Machine
You need to trust only reputed vending machine
manufacturers/dealers, and keep away from those, who make
tall claims. You can visit a few established operators in your
area, and find out where and how they purchased their
machines, and if they were experiencing any problems with
them, how did they go about solving the issue. This way you
will be sure of buying it from a good source
You will need the upfront payment to buy the machines. You
can purchase the machines directly from wholesalers or
manufacturers. And you can even look at purchasing the
equipment used off of Craig’s List or Amazon.
6. Deliver excellent customer service
Providing good customer service is the most critical part of
any successful business. When you’re running a vending
machine business, this looks like keeping the equipment wellmaintained and keeping the machines well-stocked. Come up
with a schedule to visit all of your locations regularly. Check to
ensure that the machines are clean and look nice since dirty
equipment will be off-putting to potential customers. And
make sure the equipment is operating well and that there
aren’t any problems.
It’s also a good idea to have your contact information clearly
visible on all of the machines. That way, customers have a way
to contact you if there’s a problem. Be sure to also track which
items are selling well at each location. You can talk to the
business owners at each location to determine the types of
items customers prefer.
What do you want your healthy
vending business to accomplish,
that is personally, professionally,
and societally? Understanding
what you want to achieve is
crucial to your ability to choose
the best business strategy for
you.
Examples of purpose factors include:
More flexibility in your schedule
More control over financial future
Better ability to provide for your family
Desire to help people/make a difference
More time with your family
Retirement Income
Having a clear end goal will make your decisions down the
road easier and keep you focused.
Determine how much time you have to invest in your
business. Most people will start one of two ways:
They’ll quit their job and jump into the business full-time.
Usually people in this scenario have built up enough savings
that they can manage without the income from their job for
6-12 months.
They need the income from their current job, so they start a
vending business by working on nights, weekends, and
during lunch breaks.
Realistically, do you have the available time to do all of that
work yourself? Does that time-investment align with your
motivation for starting this business? Do you need a partner?
Would you prefer some business support?
Consider this example: you choose to buy and self-operate a
50-machine vending route because the numbers make sense
and it’s a smart business decision. However, the main reason
you wanted to start a business was so that you could spend
more time with your family. Now you are the owner of a
lucrative vending business that keeps you away from home
80 hours a week. Have you accomplished what you wanted? If
the answer is “no”, then you need to hire a route driver to
handle the day to day of your route.
Make sure to understand your time-investment level before you
start evaluating business opportunities.
Everyone who gets into this business (or any business) will have
a level of financial investment that they’re willing to put into it.
So you’ll need to determine how much you’re willing to invest
in this new business of yours.
Note that this answer will depend on a couple of other factors.
Generally speaking, the more support offered by a business
opportunity, the more expensive. And vice versa. But, that
investment might be more beneficial for you, depending on your
why, and your time-investment level.
In other words, don’t make the mistake of choosing a business
option solely based on your initial expenses without considering
the other important factors. Understand the difference between
what you want to invest and what you can invest. Write down
both numbers and keep them in mind as you continue to read
through this guide.
It’s important to understand your answers to these questions
before analyzing business opportunities and franchises. There
are a lot of factors to consider, but the process will be a lot
easier if you know what you want and what you need to start
this business. Knowing the why factors will help you make the
right decisions for your business.
Many operators buy their wares in bulk at Sam’s Club and
Costco and sell them for roughly 2x the price they paid. Here’s
a look at how a typical vending machine’s margins might look
by item.
Location is the most important factor when it comes to
vending machines. You should, ideally place your vending
machine where human traffic — foot traffic in particular, is
constant. A vending machine will get customers only when it
is visible to them, and they will see it only when it is placed
strategically. If your vending machine is easily accessible, it is
bound to attract customers and help you make a decent
profit from your venture.
Yet another advantage of keeping your machine where
there is consistent human flow is security as doing so will
rule out the chances of your machine being vandalized — a
problem which is quite common when it comes to vending
machines. If you place your machine in an area which is
hardly frequented, it will not make much profit, and chances
of it being vandalized will only increase.
Below are examples of good places to put your vending
machines which every vending operator should consider.
Manufacturing / Distribution Facilities
Manufacturing facilities, industrial parks and distribution
centers are all great locations for vending machines. These
businesses generally employ hundreds of people over multiple
shifts (typically 24 hours a day). Many facilities offer short
breaks and staff doesn’t generally have time to go off-site to a
restaurant. Placing vending machines in the break room gives
them options – and provides the vending business with a great
source of steady income.
Offices
Businesses with 50 or more employees are great locations for
vending machines. Employees get hungry and thirsty
throughout the day and vending machines provide options
for people who don’t pack drinks, snacks or lunches
for themselves, which in today’s busy
world, includes most people.
Apartment Complexes
Apartment complexes are a flurry of activity with people
constantly coming and going 24 hours a day, seven days a week.
Many complexes also have laundry rooms, common areas,
playgrounds and parks, party rooms, or gyms. These are great
locations for vending machines since all members of the
community have access to those spaces and many residents
utilize those areas on a regular basis. One or more locations on
the property can be ideal spots to place vending machines with
a wide selection of food and beverage products.
Hospitals
Hospitals never close. They are
open 24/7, 365 days a year.
They also offer three very
distinct types of buyers. For
patients, vending can offer a
nice treat and break from
traditional food.
Finally, guests that are visiting and caring for loved ones often
turn to vending machines for a quick snack so they can spend
more time with loved ones. Being open 24/7 with multiple shifts,
and multiple buyers is the ideal combination for vending
machine profits.
Nursing Homes / Care Facilities
Like hospitals, nursing homes and care facilities are open
24/7, 365 days a year. Residents love the variety of snacks
offered and visitors turn to vending as a quick meal or snack
option to spend more time with their loved ones. Finally,
most nursing home care staff work longer shifts and have
short breaks. This makes vending a perfect option to keep
them energized throughout their entire shift. All of these
factors lead to a very profitable and high-vend location.
Car Dealerships
The average consumer will
spend nearly 3 hours at a car
lot/dealership when looking
at vehicles. These locations
also have very high foot
traffic and long hours.
On top of car sales, most dealerships offer complete service
centers too with average wait times ranging from 1.5 to 3
hours. Not to mention the sales, technicians and service staff
all turn to vending machines for convenient food and drink
options. All of these factors combined make car dealerships
one of the top-grossing locations for vending machines.
Another benefit is that most car dealerships are part of a
larger family of dealerships, giving you the perfect chance to
expand your business into new locations.
Hotels and Motels
Hotel and motel guests are
captive audiences. Even if a
hotel has a restaurant, not
every guest wants a full
meal or wants to pay for a
full meal.
Some hotels have micro-markets, but those are typically in the
lobby and not every guest wants to make the trip for a quick
snack – especially if they can grab one on their floor. Placing
vending machines in the lobby, side entrances and ice machine
areas can be a great way to generate continuous revenue.
Gyms
People who go to gyms work up
an appetite and post-workout
they don’t necessarily want to
stop at the drive-through next
door, they want something
healthy.
Gyms and fitness centers are ideal locations for vending
machines that offer healthy snacks and drinks that can help
people refuel after working up a sweat. The employees who
work there also appreciate a vending machine with healthy
options, since they are typically hourly workers who only
receive short breaks.
Schools, Community Colleges and Universities
Students are busy and they have healthy appetites. Schools,
community colleges and universities are a flurry of activity
every single day. Vending machines in the right locations on a
school property can be an excellent source of revenue as
hundreds of people pass by every day who are in a hurry, who
are likely hungry and who want a quick snack while they do
work between classes or are in a hurry to get to class. Schools
are particularly ideal for vending machines that sell healthy
products because parents and administrators want to ensure
students have access to better options than chips, cupcakes
and sodas during the day.
College dorms are also excellent spots for vending
machines. Students stay up late and they don’t always
want to run out for a snack while they are up working or
hanging out with their friends. It’s easy to go to a vending
machine – especially if the machine can be programmed
to take bank cards, credit cards or even school meal plan
cards.
Retail Stores
In a retail store, there are two specific audiences for vending
machines. First, the customers coming in and out of the store.
People often get hungry and thirsty while they are running
errands and a vending machine placed near an entrance can
be a great way to capture foot traffic and leverage impulse
buys. The second audience is the employee base.
Retail employees usually get one or two ten-minute breaks a
shift and a short meal break. They usually don’t have time to
run to a restaurant to grab a meal or snack, and vending
machines provide an affordable opportunity to fuel up before
going back out on the floor.
Need Help Finding Profitable Vending
Machine Locations?
Profitable vending machine locations are plentiful but
identifying them and securing them can take some legwork.
The vending business can generate significant income once
you put in the upfront work to secure great locations. Make
sure you’re continually scouting new locations and building
connections in your community to open new possibilities for
revenue and profits.
If you’re new to the vending business and you want help
finding profitable vending machine locations, consider the
above-mentioned potential locations.
This is a question that a lot people ask before they get into
the nitty-gritty of what it takes to run a successful vending
machine business.
Here’s a quick overview:
Your day will typically start by hopping onto your computer to
view the backend remote monitoring system. This technology
gives you an up-to-date report to see which locations are low on
product and need to be restocked.
After taking a look at your machine inventory report, the
next task is to print out reports that tell you how many
of each product you need called “Pick Lists”, load your
products and pack them up into your vehicle. Then
you’ll hit the road where you get to interact with your
customers.
Empty the cash box
Refill the coin mechanism with dimes, nickels, quarters, and
dollar coins
Restock all products in the machine
Wipe down the glass on the front of the machine
Once you’ve completed your onsite tasks, it’s time to get back
on the road and visit your next location!
After servicing your route for the day, other daily activities
might include reordering products, accounting activities, and
inventory management.
How often will I need to service my
machines?
If you are in high-traffic, high-producing locations, you will
typically service your machines once per week. Servicing a
machine does not require a lot of time (typically 15 minutes or
less), but maintaining a well-stocked and clean machine is an
absolute must. Otherwise, your sales will suffer due to the
machine not functioning properly.
What type of licensing, paperwork and insurance
will I need?
While our program includes a fire,
theft and vandalism plan we
highly recommended you
purchase an umbrella insurance
policy for your business. More
times than not, the best options
you can find is to go through local
insurance agents.
While the decision is ultimately yours, the majority of vending
operators establish their business as an LLC. You can use your
personal lawyer or accountant to get this setup, or (if you’re
more savvy) go through a service such as LegalZoom.
Additionally, please be aware that there are benefits of
registering your business under one of the following categories.
A basic internet search will yield all of the possible benefits of
registering your LLC as:
A small business (through the SBA)
A business owned by someone with a disability.
A veteran-owned business
A women-owned business
A minority-owned business
Do I need a truck or large vehicle to service my
machines?
Starting out, a dedicated service vehicle will not be necessary.
You can use your personal vehicle. You can do this because
you will only put in your vehicle the products you need to
stock each machine. Using eManage, your vending
management software, you will be able to print a report of
exactly what is needed to fill any machine at any time. One
you have a very large business; you may eventually need a
larger vehicle to transport larger quantities of products.
The fact is, vending machines can be highly profitable, if a
business is structured in the right way. There is a lot of money
to be made in vending, and it shows in the current state of the
industry. As long as people eat and drink on the go, there will
be a need for well-placed, well-stocked vending machines.
There are a number of factors that make the vending machine
business a lucrative investment. These include: Low startup
costs. Involvement of family in business.
These include:
Franchise brand provides you with expert location
acquisition services.
Ready-to-go startup model.
Strong marketing support.
There are plenty of smart strategies that vending operators
can put into place, to protect their assets and prevent the
costly implications of these threats.
Reduce Trouble by Building Relationships.
Install an Alarm System.
Warning Stickers and Signs.
Install a Vending Machine Cage.
Security Camera Installation.
Business Insurance Can Help.
Business Insurance Can Help.
Get New Vending Machine Locks
and Keys.
A vending machine business is a business where you have one
or more vending machines in various locations and earn
money from sales generated by those vending machines.
A large part of the business involves running periodic routes to
these locations. During these routes, you stock up your
machines with inventory and any coins needed for change.
You also collect money from your vending machines.
The typical vending machines offer drinks or snacks. But there
are a wide variety of machines available including something
as simple as a gumball machine that can cost under $200 to
much more expensive vending machines that can run between
$3,000-$5,000. Vending machines stocking healthy food
options are gaining popularity as well.
Vending machines can offer a variety of payment options,
from simple coin-operated payments to credit card readers
(with some newer models offering mobile payment options as
well).
Vending machine routes can provide passive income when
structured correctly. To make your vending machine business
as passive as possible you should do the following:
Buy high-quality machines that won't need constant repair
Install inventory tracking software that will optimize
your routes
Hire reliable route runners
Have a machine repair service in place to repair your
machines
Once you have these key processes in place you will be well on
your way to enjoying passive income provided by your vending
machines.
To make your business as streamlined as possible, you will need
to install software in each of your machines that will tell you
when inventory is getting low. This is essential to run a smooth
and hassle-free operation.
This software can keep track of sales (including cash, credit
card, and mobile payments) and other key metrics (including
which items are selling well). This will help you maximize the
profitability of each machine.
The sales tracking software also helps discourages your route
runner from pocketing any cash from the machines because
you can track everything to the penny. It can also alert you
when there are errors on your machine that you may want to
service
VENDING MACHINES THE BEST WAY TO
MAKING PASSIVE INCOME