Getting Rich from Vending Machines? (10 Steps To Wealth)
Today I am going to explore the answer to the question ‘can you get rich by installing vending machines? So, how much can you actually make by vending machines?
|Period||Average Revenue (USD)|
|Daily Earnings||$10 — $12|
|Weekly Earnings||$70 — $80|
|Monthly Earnings||$300 — $400|
|Yearly Earnings||$3500 — $5000|
This table shows the average revenue of a vending machine for a day, week, month, and year.
Vending machines aren’t really a unique business concept—after all, they’re almost everywhere and have been around for ages.
This industry, on the other hand, has a lot to offer people considering establishing their own business. For instance, there are millions of vending machines in the United States alone, with annual revenue of over $23 billion.
Well-stocked vending machines can make anywhere between $200 to $400 per month.
Now ‘that’ is solid motivation; enough for those asking ‘can you get rich from Vending Machines’. In fact, for both novice and seasoned businessmen, the vending machine industry is an appealing opportunity.
Apart from its spontaneous success, managing a vending machine company supports plenty of flexibility. It may be a fun weekend side job, a low-cost company, or an exciting new approach to diversifying your business portfolio.
So, are you ready to make a fortune selling grab-and-go food and drinks? Everything you need to know about starting a vending machine business is right here. Read on!
What Costs Are Involved With Vending Machines Business?
Now that you have decided, let’s get to the costing aspect of it. The vending machines and stock items account for the majority of the costs associated with starting a vending machine business.
A basic vending machine business can usually be started with as little as a $2,000 investment. Many operators advise purchasing old or refurbished machines, which range in price from $1,200 to $3,000.
Depending on the size and functionality, a new vending machine might cost anywhere from $3,000 to $10,000.
Aside from the machine itself, you’ll want to factor in the cost of inventory to keep your machines stocked.
This might go anywhere from a few hundred dollars to thousands of dollars, depending on how many machines you plan to own and what kind of product you’ll stock.
Ahead I highlight a few steps that should help you in deciding and establishing a vending machine business from scratch. Or aid you in your existing one.
#1 Weigh Out Your Options & Build a Business Plan
While most people believe vending machines only sell snacks and drinks, if you’ve considered how to start a vending machine business, you’re probably aware that there are more alternatives available.
Vending machines are divided into four categories. When choosing the machine whose products would be the most popular with your target market, consider all those types.
Begin with a single or two vending machines with a targeted market, irrespective of the type of machine you select.
As you get accustomed, you will be able to add more machines and items to your inventory.
To begin, chalk out a business strategy that lists your aims and objectives.
While writing a business plan may appear to be a time-consuming task, it is critical and should not be overlooked. Here are some easy steps to follow while writing a vending machine business plan:
Define Your Company
Identify the type of vending business you are aiming for. Make a list of your objectives and make them quantifiable and achievable.
Analyze the Market
Check out your local competitors. Discuss various areas of the company, such as marketing, strategy, and so on. Don’t get overwhelmed (by the terms used) here. Start low and slow if needed.
Keep in mind that you’ll be tracking your progress, profits, and losses while you create your company’s plan. Make use of good budgeting techniques.
These should be documented in a profit and loss statement: a financial document that emphasizes your business’s income and costs and allows you to calculate a profit or loss at the end of each month and year. Easy enough?
Consider your long-term goals, including measures to boost your bottom line, when you write your company strategy.
Also consider reinvesting your income to expand your vending machine business and buy new machines, allowing you to forage into other markets.
#2 Choose a Location
Next, decide where you’ll put your vending machine or machines.
Consider potential locations, surroundings, local stores, traffic on that street, and any other criteria that can help you assess whether or not you’ve chosen a good location.
Vending machines work best in settings where people have to wait, where there is a lot of foot traffic, and where there is residential and/or commercial property, such as apartment complexes or doctor’s clinics.
You can either use a geolocation service or discover a good site on your own.
The type of vending machine you choose is significant, but the location in which you place it is the most important component in making money from your vending machine business.
In a mall full of restaurants, for example, an expensive food-and-beverage vending machine might fail, but in an office park, it might thrive.
The Areas to Consider
Consider the areas where you have personally purchased anything from a vending machine, as well as the times when customers are most likely to purchase a beverage, snack, or another item when beginning a vending machine business.
It’s likely that your restaurant options were limited, you were in a hurry, or you were waiting somewhere like at the airport or at a clinic.
Possibilities for your vending machine’s location include schools, colleges, universities, airports, medical centers, or hospitals. Supermarkets and shopping malls are two examples of places where you can go shopping.
They can even include laundromats, railway stations, apartment buildings, and factories or manufacturing plants.
The next step is to secure your chosen location. A good businessman may feel at ease calling or approaching a property or business owner in person.
This strategy can work for smaller businesses, especially if you’re a regular customer or know the owner.
You might also consider visiting the local Chamber of Commerce. They can provide you with information on important firms in your neighborhood, that may, in turn, guide you with some site ideas.
Ideally, your vending machine should be located at a company with at least 100 employees or a high volume of foot traffic, such as a multi-business office park.
If you already have a place in mind, contact the owner or work on obtaining the contact information for the appropriate management.
Speaking with potential partners about geographical requirements will help you gain a better grasp of local demand and help you choose the right vending machine and products.
#3 Select the Vending Machine That Works For You
No machine-no business! Fortunately, selecting your vending machine is as simple as conducting an online search.
Search comprehensively on local and national levels, to grasp the various vending machine offers and pricing options available. The cost of inventory must be considered when comparing vending machine prices.
As a reference I suggest these 3 types of providers to start buying your machine from:
Manufacturers Or Wholesale Providers
These have the most vending machines for sale, the most up-to-date technology, and the most comprehensive delivery, repair, and training services.
These may need a minimum order of numerous machines or other fees that go toward machine servicing and business development programs, thus being among the most expensive choices.
Secondary Market Vendors Or Internet Retailers
They offer a wide range of vending machine brands and types, as well as useful tools for company owners. Thousands of vending machines are for sale on consumer-to-consumer marketplaces like Craigslist and eBay.
You can save time by filtering by merchant or owner location, which eliminates the need to worry about high delivery charges.
For first-time vending entrepreneurs who don’t want to spend thousands on a new or refurbished machine, this may be the best alternative.
#4 Get In Touch With Businesses and Negotiate
If you want to locate a vending machine on your own, you’ll need to make contact with local businesses to set up a partnership.
This requires approaching business owners and requesting permission to install your vending machine at their location, such as an auto repair shop.
Make an agreement with them that includes providing them a percentage of your sales proceeds, such as 5% every month, in exchange for the space your machine will occupy.
Request to talk with the owner or management via phone, social media platforms, or in person. Explain how the agreement would be a win-win situation for everyone when you make your request.
You will profit financially from having your vending machine installed in a business, and the proprietor will profit from a share of your sales.
#5 Stock Your Machine
Okay, so you got your vending machine. It’s now time to stock it with the inventory. (Duh!)
Choosing the right product to display can exponentially affect sales. Rather than stocking items based on prevalent food and beverage trends, pay attention to local, area-specific demands.
As a precautionary measure do not over-order initially. Adjust your stock based on consumer supply. The worst thing you can do is to stock items that ‘you like to vend-off’ the machines. Don’t do that!
As a heads-up, drinks will make up the majority of your revenue if you choose to provide integrated food and beverage services in your vending machine business.
The drink size and form will also influence your machine options. So, if you want to offer cartons or oddly shaped items, look for a machine that offers variable product sizes.
#6 Hire a Service Technician
Next, think about what you’ll do if your vending machines break down. This is where locating a competent repairman comes into play.
Here, I would recommend doing some research first. Find a maintenance person with a good reputation who would be available if your vending machine broke down.
Vending machines, unfortunately, can stop working at any time. If it can not be serviced right away, place an “out-of-order” sign on your machine until it is functional.
#7 Scope Out Your Funding Possibilities
Vending machine businesses do not require nearly as much initial capital as other small businesses. Some businesses can cost hundreds of thousands of dollars to launch.
Even yet, a few thousand bucks aren’t exactly pennies either. Consider these two possibilities if you need a loan to buy a vending machine:
Obtaining a short-term loan to support your vending machine may be the ideal option if you’re already a business owner with a good financial track record.
Short-term lenders, like traditional-term loans, deposit a large sum of cash directly into your business bank account. And you repay the loan, plus interest, over a certain period of time.
As the name implies, short-term loans have far shorter repayment terms than their long-term counterparts—usually fewer than one and a half-year. Furthermore, the interest rates on short-term loans tend to be higher than those on long-term loans.
Short-term loans, on the other hand, are often easier to qualify for than long-term loans for these reasons.
Short-term lenders must analyze and assess your business’s financials before agreeing to grant you a loan because this is a small business loan.
To demonstrate your candidature, you should provide an excellent track record of business revenue and personal creditworthiness, if possible.
Finance For Your Equipment
Do you feel short on cash in order to start a profitable vending machine business: don’t worry, that does not matter much. However, if you require assistance, you might apply for an equipment financing loan.
The terms of these loans are determined by the worth of your equipment, which serves as collateral in the event that you default on your payments.
Well-maintained vending machines can have a life of up to 10 years or more which can, in turn, reassure your investors.
If you opt to apply for an equipment loan, you will require equipment estimates for the machine(s) you plan to acquire in addition to your own financial details and business strategy.
Also, if you require funds to purchase merchandise, inventory financing may be an option.
#8 Placing Your Vending Machines
After establishing a proper contract with the owner of the location where you plan to place your machine, it’s time to get it there.
You can haul it yourself in an SUV or truck, or you can rent a delivery vehicle from U-Haul, or another private carry wagon provider.
If the above does not work out, you can also engage a delivery firm to carry the machine for you, which is an excellent choice if you are unable to do so yourself.
This might be especially helpful if you plan on placing multiple vending machines at different locations within a certain timeframe.
#9 Analyze Your Earnings
Remember that you should be making enough money from the machine to pay all of your expenses, which include rent, repairs, inventory, and transportation.
Continue to assess your costs and profits on a regular basis to verify that the vending machine location you selected is lucrative.
If not, it’s time to renegotiate your rent, relocate to a better location for your firm, or find other measures to boost your profit margins.
#10 Ensure Machine Operability and Keep It Stocked
Keeping your vending machines well-stocked and in good functioning, order is a crucial element for vending machine business.
Whether they be food items, toys, or other products you are selling, as well as the currency notes and change container, all are included in this.
Remember: it’s all about upkeep in this line of work. Check on your machines frequently, or employ someone to visit your locations to ensure that they are operational and re-stocked timely.
Concludingly, a vending machine business is just like any other business: you plan, locate, loan-invest, and then your service.
Phew! Now that you are familiar with the highs and lows, the in’s and out’s of the vending machine business, I hope you can proudly answer if ‘you can get rich from Vending Machines’ or not.