How to Start a Vending Machine Business [Updated 2021]

How to Start a Vending Machine Business

How to Start a Vending Machine Business

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It can be hard to find a career that’s both profitable and enjoyable. But thanks to the rise of vending machine technology, there is now a simpler way for an entrepreneur or a business owner to make money and build equity by starting their own vending machine business.

Vending machines are everywhere today – from gas stations, fast food restaurants, schools, and hospitals to grocery stores, malls, and even airports. The vending industry has grown tremendously over the last few decades, generating over $7 billion in revenue for their operators each year in the US with around 5 million in operation as of 2020. Vending machine operators generate $64 million in profits just from the snack niche.

If you’re considering this as a potential career opportunity but don’t know where to start, here is a thorough guide about how to start a vending machine business including everything from industry trends to startup costs and more.

How to Start a Vending Machine Business of Your Own

Starting a vending machine business is a great opportunity for entrepreneurs. There are many different types of vending machines, with options including beverage, snack, candy, and ice cream vending machines to make your own “mom and pop” store in the convenience of your home.

The first step to starting a vending machine business is deciding which type of vending machines you want your business plan to include. There are many options on the market, each catering to different types of products. Your decision should depend upon what type of products you would like to inventory and how much storage space you have available at your location.

RELATED ARTICLE: How to Write a Vending Machine Business Plan

For instance, food and beverage vending machines are great for stocking drinks and snacks but do not usually store non-food items. On the other hand, snack and candy vending machines can make your business very unique, however, they may be harder to find depending on what kind of location you plan on using for your business.

 

Types of Vending Machines

Let’s take a look at some different types of vending machine offerings.

Candy Vending Machines

Candy vending machines are a great option for any business looking to attract children, teens, or anyone that enjoys candy! Candy machines can offer single-serve options or larger, bulk candy containers. Packing your vending machine with an assortment of candies will make sure all of your customers are satisfied and will allow for a large variety of potential customers.

Snack Vending Machines

Snack vending machines are usually larger than candy machines and can be found in a wide variety of locations. Snack vending machines can offer a wide variety of non-food items such as toys, games, and even school supplies. A snack machine is great for special events or business locations since it can make your location stand out from the competition due to its unique product options. A significant portion of vending machine sales is covered by snack vending machines.

Ice Cream Vending Machines

While not always an option for every location, ice cream vending machines are a great choice if the area you plan on using your business in will allow for it. These types of vending machines can vary greatly depending upon how much storage space is available to offer an assortment of ice cream treats. Ice cream vending machines make a great choice due to their high profit margin, ease of use and they maintain temperature well.

Beverage Vending Machines

A beverage machine is great for stocking drinks, usually cold beverages like soda or juice. These soda machines often only provide single-serve options but there are many drink machines that can hold larger stock units for small or large business locations. They are a great choice because they allow customers to get their choice of beverage without having to buy an entire bottle. They also provide the customer with easy access to bottles that do not require refrigeration or can be stored at room temperature without needing ice.

Coffee Vending Machines

Coffee vending machines can be found in many office buildings and cafes, serving snacks along with coffee treats. Coffee vending machines come in several different types of coffee and other hot beverages including flavored varieties. These machines are great for offices or business locations that would like to offer their customers a chance to relax and enjoy themselves during break time.

Specialty Vending Machines

Specialty vending machines are a great way to offer your customers something outside the box. These machines can be stand-alone or integrate into other types of vending machines such as snacks, candy, or ice cream. Specialty vending machine models include instant photo booths, plush toys, and even gumball-style games. These types of vending machines are fun and attract a wide variety of customers.

Custom Vending Machines

Custom vending machines are usually made to fit the specifications of a business location. These types of vending machines can vary greatly in how they look, how they are loaded, their offerings, and even how many items they hold. A custom vending machine is great for any business looking to create an entirely unique experience for their customers to get the product or service they want exactly how they want it.

Bulk Vending Machines

Bulk vending machines can offer a wide variety of products and are easy to load. These types of machines usually only require the customer to pour in loose change as payment and turn a handle, just like how bulk candy is dispensed at carnivals. They are great for providing customers with an assortment of options without requiring any extra effort on their end.

With all of these vending machine options available, how do you choose what’s right for your business? The best way to choose the right vending equipment is to try and imagine how they would fit into your location and how they will benefit those who might use them. Getting feedback from those around you (especially children) can help you decide how to stock your vending machine and how much space is needed.

 

How Big is the Vending Machine Industry?

In 2019, the vending machine market was valued at $18.28 billion, and by 2027 it is expected to reach $25.25 billion, growing at an annual rate of 6.7%. The vending industry is expected to increase by $6.97 billion from 2019 to 2027.

 

What are the Key Segments of the Vending Machine Market?

The vending machine industry is divided into three major segments: cold drink, snack, and other food, and non-food vending machines.

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What External Factors Affect the Vending Machine Market?

The external factors that most affect the vending machine market are similar to all other industries. The growth of the economy, population, and inflation can lead to a boom or a bust depending on how they affect supply and demand. Other factors such as taxes, government regulations, and wages also play a role in how well any business performs.

 

What Trends Affect the Vending Machine Market?

There are a number of trends affecting all aspects of the vending machine industry, including how they are used and how much revenue is made. Some of the current trends occurring in the vending machine market include:

  • convenience stores that offer consumers food options (instead of just small groceries)
  • fluctuations in how often people eat at restaurants or buy snacks or food on the go
  • the move towards healthy snacks and how it affects demand for vending machines
  • the trend of consumers wanting products at a lower price point, which leads to the use of vending machines as opposed to traditional brick and mortar stores
  • vending machines becoming more technologically advanced with touch screen interfaces, cashless features, and other options

vending machine infographic
 

Who are the Key Competitors in the Vending Machine Market?

Direct competitors of the vending machine market include other vending machine manufacturers, snack/food companies, and coffee companies. Indirect competitors of the vending machine market include supermarkets, convenience stores, etc.

 

What are the Key Customer Segments in the Vending Machine Market?

The vending machine industry is primarily made up of two key customer segments: businesses and consumers.

Based on the application, it is possible to segment fast-food restaurants, shopping malls, retail stores, airlines, hotels, rail stations, schools, and business centers.

 

What are the Typical Startup Costs for New Vending Machine Businesses?

The cost of starting a vending machine business is generally relatively low when compared to other types of businesses. An entry-level vending machine company can be started for as little as $2,000 in investment. Used machines can be purchased from vending machine operators for $1,200 to $3,000.

 

What are the Key Costs to Launching a Vending Machine Business?

While vending machines are relatively inexpensive to purchase, they still come with associated costs including rental or purchase of a location to house the machine(s), insurance for your vending machine company and employees, machine maintenance, and inventory to fill the machines.

 

How Much Does a Vending Machine Business Owner Make?

Vending operators and owners can make a handsome profit each month by merely locating their machines in prime locations. 

For example, an ice cream vending machine owner that puts his/her machines on college campuses will be able to sell hundreds of gallons of ice cream every year and earn tens of thousands of dollars. These figures vary according to how much product is sold and how often the machines are filled/refilled with supplies. 

So how much does a vending machine business owner make? The sky is truly the limit with this fun and lucrative business.

 

What are the Keys to Launching a New Vending Machine Business?

The key to starting your own vending machine company is to start small and eventually expand your fleet as you make more profits. It’s also important not to underestimate overhead costs like installation fees and electricity bills.

Make sure to research different products before deciding which ones will sell best in your area. You’ll want popular items like drinks and snacks so that people will be more likely to buy them.

Be sure to research available locations and install your vending machines in locations with high foot traffic so that people have multiple opportunities to buy throughout the day.

Also, consider an efficient vending machine design for increased vending sales and less need for repairs.
 

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How to Start a Vending Machine Business FAQs

In its most basic form, vending machine business consists of buying or renting a vending machine(s), putting it in an easily accessible area, and stocking it with a variety of products for sale. Once the machine is set up, all you have to do is inventory management and collect money from each location regularly.

There is no need for any prior experience or expensive equipment in order to start a vending machine business. If you already have a product, all you need to do is place an ad online and get your first customer.

It's also important not to jump the gun before you know whether this type of business will even work out for you. Don't invest too much money into buying machines until you've had the chance to test them out and make sure that vending machines are something you want to pursue.

Vending machines are actually very simple to get started with, you don't even need the experience to do so. So many people already own vending machines, yet never use them themselves, they will be excited to always have a mouthwatering treat available to them whenever they want it. If you decide that this business opportunity is something you would like to pursue, take a look below at some of the things involved in starting your own successful vending machine business venture.

First and foremost, vending machines are very easy to find; whether buying or renting one is best for your needs. If you choose to buy your own vending machine equipment to sell in, you can usually buy vending machines fairly easily and at a low price point. Used machines equally come in all types and sizes for whatever type of product or snacks you would like to be available, i.e., candy, healthy snacks, beverages, etc. If buying one is not an option for your current situation, another great way to get started is by renting one from the company that owns it such as Vending Solutions.

Once you have purchased or rented your vending machine(s), make sure they are level with the ground to ensure proper vending business function. Install any items required for the snack or drink to be dispensed (i.e., ice, cups, popcorn bags, etc.) and fill up all compartments with the snacks or drinks you purchased to stock your vending machine(s). Make sure you label each compartment of your vending machine(s) in order to make it easier for customers to find what they are looking for. Now that everything is in place, it's time to get started! 

To start selling your treats via vending machines, make sure you are placing vending machines where they are easily visible to potential customers. Put out flyers around town announcing the grand opening of your new business venture and advertise online on social media sites such as Facebook or Instagram.

As more people are moving away from traditional workplaces and towards self-employment, it is more important than ever to have an idea of what you'd like to do for work. Of course, some people still prefer the stability of a full-time job while others search long and hard for something more flexible that provides passive income. 

The average revenue generated by vending machines depends on various factors including product type, volume sold per item, and location. The average vending machine earns $35 a week; however, vending machines in high foot traffic areas and are well-stocked can generate over $400 a month.

The biggest mistake new vending machine owners make is underestimating how much it will cost to run their business. You need to set aside money for licensing fees, permits, and insurance in addition to payroll costs in order to ensure you're successful.

Another common mistake made by vending machine owners is failing to consider how much it will cost to fix equipment problems and how long they can go without making a sale if something goes wrong.

It's important to have a well-thought-out vending machine business plan, including how you'll generate revenue and how you will keep your vending machines running smoothly.

Vending machine owners who are new to the business often underestimate how much time goes into running it. You'll be responsible for stocking your vending machines, making repairs, and collecting money.

By far the most important part of starting a vending machine business is choosing your machine locations. 

When getting started, try to use common sense and avoid any location that you think doesn't have potential, such as locations that are dark or unsafe. 

You also need to be aware of how many people pass through the location each day on average. It's very important to choose locations where the vending machine will be highly visible. For example, a vending machine located outside on a college campus is an ideal choice.

Note how many people go in and out of the location on an hourly basis. This information will give you a good idea of how many people work there and how many people visit the location each day.


 

Helpful Videos

The Real “Secret” To Finding Vending Machine Locations


 

How To Start A Vending Machine Business In Under 10 Minutes | Passive Income Ideas


 

Which Vending Machine Is The Best To Buy

 

Additional Resources

The Foundation of the National Automatic Merchandising Association (NAMA Foundation)

Vending Solutions

Vending.com

 

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