How to Start a Vending Machine Business | A Step-by-Step Guide

How to Start a Vending Machine Business Featured Image

If you’re looking to learn how to start a vending machine business, it’s likely, you’ve either seen the machines and imagined how you can make money owning them, or you’ve been told about the opportunity, and you’re interested in learning more. You might be dissatisfied with the way you earn money now, or you want to earn more, and you see starting a vending machine business as an optional method for doing that.

Most people run into a gamut of questions and concerns when they’re exploring a business opportunity, and you might be the same way. It’s likely you want to know:

  • How much money you can make?
  • How much the business might cost to start?
  • What’s the process for getting started?
  • Is the vending machine business something you could enjoy?
  • Will you be able to check off all the things you want on your “bucket list” and still run this business?
  • And, many more questions may present themselves

It’s my goal in this article to explain how to start a vending machine business in a way that makes sense to you, and gives you actionable steps you can act on today (as soon as you finish reading). If that sounds good to you, let’s get started…To view this content in video format, check it out here:

What is a Vending Machine Business? An Overview

If you’ve ever been out, and you’ve seen the machines that dispense snacks or drinks, then you know how convenient it is to be able to get snacks and drinks at times. Places like schools, churches, recreations centers, or inside of other businesses where there’s lots of traffic, people may need something in between meal times (or even as meal replacements). In locations like these where people might appreciate a quick snack or drink, it’s convenient to have a vending machine.

What you might not have paid much attention to is how someone has to maintain the vending machines, and there’s room for small and medium sized businesses to serve their communities in this way. In a vending machine business, the vending machine owner will:

  • Identify locations where the market demand could support a profitable vending machine
  • Identify items that would sell well inside of the machine
  • Keep the machine stocked (or hire others who will)
  • And, make sure the machine is operable

Who is a Vending Machine business right for?

how to start a vending machine businessThe vending machine business is right for:

  • Someone who is hospitable and willing to identify snacks, drinks, and items other people would want
  • Someone who is responsible and will make sure the machines stay stocked
  • Someone who will be a wise financial manager and reinvest the money to grow the business and maintain a good quality experience for those who use the machines
  • Someone who is okay with performing routine maintenance on the machines to keep them operable

What’s a typical day in a Vending Machine business like?

A day in the vending machine business will vary based on the quality of your machines, the demand for your products by the consumers, the amount of inventory you stock, the distance between the machines you maintain, and how you get your products from your vendors–all of these factors could make a day vary quite a bit.
A typical day will likely consist of inspecting your machines to make sure they’re operable and well stocked, acquiring inventory for restocking, restocking machines, performing routine maintenance (when needed), and taking cash and coins to the bank. I recommend businesses of all types to divide their time between four tasks: acquiring work, doing the work, managing the work, and strategizing about the work. This is how it could break down with the vending machine business…

Acquiring the work: For acquiring the work, that’s when you’d be looking for more locations, looking for people who want to buy or lease machines (if that’s your business model), building brand awareness so more people use your machines, adding more signage, replacing old signage, or engaging with people in the area.

Doing the work: When you’re doing the work that’s when you’re buying inventory, restocking, fixing machines, inspecting machines, and fulfulling customer expectations.

Managing the work: When you’re managing the work, that’s when you’re doing inventory management, making sure you have enough product to cover your demand, checking the product quality and expiration, managing workers (when you decide to hire), or creating training to prepare for hiring workers.

Strategizing about the work: This is where you’d be brainstorming about new growth opportunities for your vending machine business, you might be mapping your area, deciding on areas where the demand could sustain a profitable machine, deciding on whether swapping out products could increase profit, analyzing your competition, and looking for strengths, weaknesses, and opportunities internally and in the market.

Who is the target market for a Vending Machine business?how to start a vending machine business

The target market is:

  • Commercial rental locations
  • The Government
  • Other businesses
  • And, Direct to Consumer

Commercial Rental Locations

Some locations can sustain a commercial rental location filled with vending machines. In places where there’s sufficient traffic, you could place multiple machines, cover rent fees and labor, and make a profit.

The Government

The US government has thousands of different agencies that range in what they do. There are some agencies that have enough traffic that they could benefit from having a vending machine, and the government mandates they spend a percentage of their income doing business with small business owners. If an agency needs a vending machine, you could bid on the contract, and potentially win!

Other Businesses

Businesses like salons, recreation centers, parks, activity centers, schools, and other places that have a resonable amount of recurring traffic may appreciate adding the convenience a vending machine could offer. In this case, you could negotiate a win-win deal where they’d have a machine (which tends to bring more customers back) and you’d add another revenue stream as a result.

Direct to Consumer

While your consumers are unlikely to need a vending machine for themselves, they will be the ones using the machine, so you’ll want them to feel as comfortable as possible using the machine, and you’ll also want to make sure you have a consensus of what types of things they’d like to see inside.

How does a Vending Machine make money?how to start a vending machine business

A vending machine business can make money in 4 or more ways: thru products, services, and affiliate partnerships.

Products: It’s likely you know vending machines make money selling their inventory. Hahaha. The primary way most peole make money with vending machines is thru selling the products they place on the inside.

They can also make money thru lease to own of their machines, outright selling the machines, or teaching others how to run an ATM business thru online courses.

Services: Added to product rentals and sales, a vending machine business can also make money from services. You can offer services to other people’s machines or you can offer services to those you lease to own or sell your machines to. It’s possible to get paid to:

  • Do routine inspections
  • Do repairs you feel comfortable performing
  • Restock
  • Consulting
  • Or, other services

Affiliate partnerships: Some vending machine owners get paid thru ads. They may place ads on their machines and use them as billboards. When you charge for ads, you typically get paid for impressions for the duration of the contract you’ve set.

As an alternative, you could post ads to companies you’ve created an affiliate partnership with, and get paid per referral–this option could give you lots of income potential! Rather than having a 6-month ad contract, once you find an affiliate partner and an ad that converts well, you could expect revenue that’s nearly unending. There are so many affiliate programs you could choose from in various categories so you shouldn’t have problem finding affiliate partners to test out.

If you’d like to learn more about affiliate marketing, check out Wealthy Affiliate, my #1 recommended affiliate marketing training platform here.

What is the growth potential in a Vending Machine business?

Depending on your area and your willingness to scale into other areas, you could have a huge opportunity for growth! Some areas have a high demand for snack and drink products on-the-go, and as a vending machine business owner, you’d be able to tap into the opportunity there.

Vending machines are also evolving with the times, so there are machines that have credit card processors, and give consumers the choice to pay with cash or card. There are also vending machines that offer fresh food as well as non-perishable items, so there are lots of options for different markets.

What are the skills you’ll need to make a Vending Machine business work?

To make a vending machine business work, you’d need:

  • Empathy
  • Hospitality
  • Negotiating skills
  • Social and networking skills
  • Logistics
  • Organization
  • and, the ability to drive would also be a major advantage

What are the costs involved with a Vending Machine business?

I’d recommend starting small and “testing the waters” to prove your concept and make sure you like the vending machine business, then you can scale up once you have a little more insight. Here’s a good startup budget I’d recommend to get a feel for the business:

  • The vending machine – Vending machines cost on average between $3000 and $5000 when you buy them new, and between $1000 and $3000 when you buy them used.
  • 1-3 months of startup Inventory for your machine (this will be contingent on the demand in your market) – I’m estimating $300-$600 to fill the machine
  • A DIY website – $0-$400
  • Legal services – You’ll need legal services for your placement contracts and any questions or consultations you might need – $400/yr (via Rocket Lawyer)
  • Office supplies
  • A Logo – $5-$100 (via Fiverr)

After you’ve decided you want to commit to doing the vending machine business and it’s time to scale, then I’d recommend considering additional things like:

  • Incorporation – about $500 on average
  • Accounting software – $300/yr
  • And hiring when the time comes

What are the steps involved in starting a Vending Machine business?

how to start a vending machine business

I recommend you set up with the low cost plan first, then once you’ve got sales and confidence you can do this, then you add on. Here are the steps I’d recommend you take to get your vending machine business up and running:

1. Validate your Idea

Validating your idea isn’t just about identifying whether this business model can work. It’s subjective. It’s about making sure you’ll enjoy this business, deciding on a model, a process, and a strategy for making this business work for you.

2. Prioritize Your Business

Once you decide the vending machine business is a good fit for you, then it’s time to make it a priority. You will probably have to move things around in your schedule to make sure you have time to acquire work, manage work, do work, and strategize about work.

3. Build Your Brand

While you may have a reputation, your brand won’t have one starting out, so it’ll be important to build a reputation, or a brand, for your business. Networking, delivering high quality products and services, and being personable will help to grow a brand you can be proud of over time.

4. Start Getting Leads and Traffic

A growing business is tapping into the market demand. Ideally, at some point, you want your phone to ring, your email getting messages, your website getting inquiries, and people consistently going to your machines.

Get the training, support, and tools to your grow business here. Get started for free. No billing info required.

Recommended Reading:

5. Convert the Traffic into Customers

Once you have an influx of people aware of your products and services, you want to convert that awareness into cash.  You’ll need to learn how to negotiate, study the market, gain an understanding of your audience (or potential audience), and present offers that would be irresistable to them.

6. Form Your Business Legally

how to start a vending machine business

When you’re ready to “buckle down” and commit to growing the business, then it’s time to incorporate. With incorporation comes compliance, tax breaks, and legal liability protection. I’d recommend checking out Swyft Filings to help you decide on your business structure, choose which state to incorporate in, and to make sure your paperwork is filed quickly, easily, and the right way. Check out Swyft Filings here.

Recommended Reading:

7. Organize Your Books

As a “real” business, it’s important to manage your finances well. You’ll want to budget and make sure your expenses are staying below your income. Over time, you’ll also want to make sure you’re generating a profit. Accounting software will help you to categorize your expenses so you’ll know how much goes out, what your spending on, how much is coming in, and make decisions about your business based on real-time data.

I’d recommend Quickbooks as the #1 accounting software for a vending machine business, although, I have included Freshbooks here so you can take a look at an alternative if you’d like. They both have free trials, so you can check them both out for free if you’d like.

Recommended Reading:

8. Get Your Office Supplies

Whether you decide to run your vending machine business from home or from an office, you’ll need office supplies. You’ll need to write, make phone calls, make faxes, write checks, and do other things from time to time. It’s best to have all the supplies you’ll need so you can efficiently get your work done.

Recommended Reading:

8. Systemize Your Process

How to Start a Vending Machine Business Pinterest PinOver time you’ll notice patterns. You’ll get a feel for how much inventory is needed at each location, the best way to store your inventory, how to communicate to your vendors best, and much more. Once you notice the patterns that cause the optimal performance of the business, take note, and make sure to do what’s working. Systemize your processes and teach others to do the process when it’s time for hiring.

9. Reinvest and Scale

Don’t give into the temptation to spend the money your making too frivolously. Make sure to set money aside for working capital and growth, marketing and advertising, maintenance, education, hiring and more.

Recommended Reading:

Ready to Start Your Vending Machine Business?

The goal of this article was to show you how to start a vending machine business. Hopefully, this article answered many of your questions and set you off on the right foot.

If you’d like, I explain all of these concepts in much more detail in my free Business Growth Blueprint E-course and my full video course on creating your full minimum viable business plan at Wealthy Affiliate.  You can get access to my e-course and all of my free bonuses by signing up here. You’ll also get 7 free days of coaching with me, 10 lessons of internet marketing training, and two free websites you can try out for free. Let’s get started building your Vending Machine business!

Share on facebook
Facebook
Share on google
Google+
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on pinterest
Pinterest

8 thoughts on “How to Start a Vending Machine Business | A Step-by-Step Guide”

  1. Hi Tiffany

    I have to admit that Vending Machines have been something that I have just walked past or used most of my life without really thinking about it being a great small business opportunity. How difficult is it starting out with just 1 or 2 vending machines to find locations an are there any big corporate entities that dominate the market?

    This looks like a really interesting niche to explore and any advice would be greatly appreciated.

    1. Tiffany Domena

      Vending machines are similar to other industries in that there are other large corporations in the space. Large companies like Coca Cola have machines in various places, but there’s still room for small and medium sized businesses to find areas they can service the demand.

      The difficulty would depend on your area, but there are lots of opportunities to place vending machines. It’s an opportunity for property owners to stabilize more traffic, so if you present the opportunity considering their point of view and how to make it palatable for them and their customers, then you’d have a high chance of getting a deal.

  2. I thought vending machine business is just about selling the product. I don’t have any idea that you can actually choose to give service, or even opt for affiliate partnership. Honestly, i can see that it’s a great idea to invest in this kind of business but there are developing countries that doesn’t go for this. It may be because owners are afraid to just leave it behind at night and find it totally damaged the next day. Or simply because the people got used to buy in small retail shops or variety store.

    But thanks for giving me an idea that it can be safely put up in places like salon or probably spa. To be sure, I migjt put it near the police station or any government office! Maybe you can take a research on how vending machines are perceived in other countries.

    1. Tiffany Domena

      There are areas in every country where crime rates are higher than others. You may have to put more protective measures in place in those areas, but it shouldn’t be a hindrance for doing the business as a whole. Vending machines businesses are quite widely spread out across the world.

  3. Wow, I never realized that there is so much to starting a vending machine company.  This article is very indepth.  It gives just about all of the information that you need to do it.  My sister and her husband started one when they were first married.  I had no idea how much work it was.  You have done a good job in informing people of all of this.  Your website is easy to read and kept my interest due to the short paragraphs and the way it is broken down.  Good work.

    1. Tiffany Domena

      Thank Sandy! Many people are interested in the vending machine business because of the passive components, but there are active components as well. I tried to show them both. Thanks for the compliments.

  4. Wow. This website is beautiful. Well laid out. The language is clear and understandable. So comprehensive you covered almost every aspect of the business. And the recommended reading and product reviews are a great help, too Sadly, though it seemed intriguing at first, your expert analysis has convinced me that the vending machine business is probably not for me. I’m not mechanically inclined and I’m no good at the kind of direct sales calls it requires. Not to mention I’m a binge eater of chip! 

    All kidding aside, though, it really is a great website.

    1. Tiffany Domena

      Thanks for your feedback on the website. Your objections to starting the vending machine business made me laugh! Hahaha. You have to choose what’s best for you, and if you feel you’ll be eating the chips instead of selling them, then that may not be the best decision. You’re so funny!

Leave a Comment

Your email address will not be published. Required fields are marked *