When I first heard about the vending machine industry, I refused to believe that anyone could make money selling snacks and soda from a coin-operated “automated retail” machine. I never even thought of them as a business opportunity, let alone a profitable one. I would soon learn that the vending industry revenues 20 billion dollars and generates more than 13 billion snacks/beverages/purchases annually.
Once I heard those numbers, I wanted to know how to get involved.
The question is “how can you start your own vending machine business from home?” While it can be overwhelming at times, with the right advice and some guidance, you will be on your way in no time.
The first step in starting a vending machine business is deciding if it is the right business for you. This is not one of those “become a freelancer from home” jobs that you can start in a few minutes and if it doesn’t work out, so be it. Starting a vending machine business takes time and dedication, but when done right, can allow you to be your own boss, and reap the benefits of your hard work.
Deciding if the vending business is for you comes down to see if it aligns with your “3 why factors”. These factors are purpose, time, and money.
- Purpose – The first question is, what is your purpose for getting into the vending business? Do you want more control over your financial future? To spend more time with your kids and family? Maybe you just want to be able to make your own schedule? Whatever it may be, it is important to decide what your purpose is before you start because it will help keep you focused down the road.
- Time – The next question is how much time do you have to commit to starting your business? This is important because it will affect the strategy of how you delegate your tasks of running the business.
- Money – The last question is what is your money factor? This answer will typically depend on a few other factors. Generally, the more support you get from a business opportunity the more expensive it becomes. However, in many situations that investment might be the best option for you. This all depends on your why, and your time-investment level.
Once you figure out the “why factors” and decide that this is the right business for you, then you can take the next steps to launch your business.
Step 1: Find Locations for Your Vending Machines
The key to making sure that you can operate your business from home is to find locations for your vending machines before buying them. This is important for two reasons. One, you won’t end up having to store a bunch of vending machines in your garage. Also, business owners often miss out on large potential profits by doing this. The problem is that each location has a “best possible” machine to fill the spot. Let me explain this with an example.
Let’s say you buy a cash-only vending machine (if you follow our guide you won’t because we explain that credit capabilities are a necessity in today’s world) because it was on sale. Then you get offered an awesome location by an office building that has mainly middle-aged working adults. This demographic prefers using credit cards. Rarely do they carry cash on them. You are going to be missing out on a huge potential customer opportunity because you bought your machine before knowing where it was going to be placed.
So to make sure that you have space to move into your house, and are maximizing your profits, do not buy your machines before you have secured locations for them.
We’ve been talking about locations for your vending machines a lot. It is for good reason. It is often said that the vending machine business is actually a location generation business. This is because finding locations for your vending machines is absolutely crucial to your success. The reason is, you can have the nicest vending machine in the world, but if you don’t have a densely populated place to put it, there is no way it is going to make any money. So how do you find you find these locations and convince the building owners to let you put your machines there? You do it by generating, qualifying, and closing.
Generating leads is the first step to finding great locations to place your machines. This is an ongoing process that is the main determinant of your success in the vending machine industry. It’s also something you can do from home! Proper lead generation is a combination of prospecting, researching for leads, and marketing to allow leads to find you. When done properly, you will soon have a large list of leads ready to be qualified. Qualifying the best leads is important because your time is crucial. That’s why it’s called working from home, right? Only take meetings with the highest quality leads to make sure you are not wasting your time. Once you are in the meetings, it’s time to close the deal! Our full guide goes more in-depth on how to close the deal and decide which startup option is right for you.
Step 2: Determine Your Start-Up Costs
When starting a vending business, your start-up expenses will primarily come from two main sources: buying the machines and stocking them.
Prepackaged snack and soda vending machines can range in price from $1,200 to $5,000 (greatly depending on the mechanics; if it takes only cash or offers credit card readers and the type of products the machine offers.)
Vending machines can be like tiny convenience stores. The items you offer matter. And you are not necessarily limited to food and beverage. There are many different types of machines out there that include beauty products, hygiene items, bulk machines (think gumballs), and even PPE items. These are examples of specialty vending. For the sake of this post, if you are only considering candy, food, and drinks, consider the expense of purchasing each of those items in enough bulk to fill up all of your machines. That can be one very expensive trip to the big box chain stores or large invoices from your suppliers.
Vending machines can be purchased in a variety of ways. You can purchase them outright through your own investment or through short-term loans, you can lease through a vending machine company, or you can buy used equipment. Your startup cost will vary depending on the path you take. Determine your profit margin from each path and consider your financing to find the best option.
Let us also not forget there are expenses to starting up a business, dependent upon the type of business entity you are starting + the state/county/city/area you live in. You may have a fee if you start as a limited liability company (LLC,) your state or local government may require business licenses, or you may even have a specific vending machine license. You can learn more by visiting the Secretary of State for your specific state, visiting your state licensing regulation department, or checking with your county/city.
And don’t forget – create a name for your business! You want to be recognizable and unique. This will be an important consideration when filing for your assumed name certificate, LLC, etc.
3. Make a plan and get an account
Entrepreneurs plan for the best and the worst situations when starting their small businesses. Writing a business plan will help you to collect your thoughts, determine your goals, and create a path to success. Your plan should include financial projections, even if no one will see this plan other than you. Determine your projected inventory and expenses, estimate your profit based on when you collect and restock, and create your bottom line for success.
Another consideration you will want to make in creating your plan will be repair work. Who fixes the machine if it breaks? Will you need to hire an outside repair service or will you be repairing the equipment? If you are leasing the equipment, what are the charges for repair calls?
Once you have established your business entity, you will need a business bank account. And, if you are looking to apply for a loan, that business plan will be very important to your application process.
Will you have a lot of machines? Do you need to hire employees?
4. Determine where you will park your machines.
Location. Location. Location.
You will want visibility, but you will also want to consider your target market and what they will want to buy from you. You may not want to put a bulk vending machine selling gumballs in a dentist’s office. Or you may consider healthier options if you are placing machines near gyms or spas.
Apartment complexes, hotels, medical clinics, airports, malls, grocery stores or markets, public transportation hubs, shopping centers, and religious centers… where people gather or high-traffic locations are great places to consider. Just remember that you may need a contract in place before you drop your machine.
And remember to include a description of where you will be placing your machines in your business plan.
The location of your machines will also help you determine permits and licensing for your business.
As you can see the vending machine business is not for those looking for a couple of easy dollars. It is, however, a great opportunity to take control of your financial future and become your own boss, all from the comfort of your home. Grab a bag of chips and a beverage and get to work creating your vending machine business endeavor.
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August Quinn Noble is a marketing coordinator at SnackNation and H.U.M.A.N. His goal is to make healthy food more convenient than junk food. He also loves making offices more awesome. Feel free to contact him at AugustN[@]HealthyVending.com.
Joel says
Vending machines seem like a somewhat profitable enterprise. A friend of mine loads vending machines for a living. I’ll have to share a copy of this post with him. Thanks again!
Young Earner says
A vending machine business… funny how most of us have all interacted with one of these machines before, but I haven’t really thought of it as a business like that. What would the starting capital be?