From Idea to Reality: How to Start a Vending Machine Business

by Major League Mommy
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The vending machine industry has experienced exponential growth over the past decade, with the United States vending machine revenue at 15.21 billion in 2022, and through 2030, the industry is expected to have a compound annual growth rate of 3.1% .

As consumer preferences shift away from traditional brick-and-mortar shopping options and towards more convenient and time-saving alternatives, the vending machine business presents endless opportunities for entrepreneurs.

The vending machine business is a viable and profitable venture for entrepreneurs of all experience levels. With its relatively low startup and maintenance costs, it’s an attractive option for individuals looking to generate passive income or expand their portfolio of income streams.

pressing button on vending machine photo credit: Syda Productions via Canva.com
Photo credit: Syda Productions via Canva.com

*Post may contain affiliate links. Full disclosure can be viewed here.

Editor’s Note: If you are planning to start a business and want to create an LLC or other business structure, we recommend checking out Bizee to get started.

Why is the Vending Machine Business Attractive?

There are many reasons why people decide to invest in the vending machine business, but the most common ones are:

Low startup costs

While starting a business can be expensive, the startup costs for a vending machine business are relatively low compared to other businesses. The cost of acquiring a new vending machine typically ranges from $3,000 to $10,000. More advanced smart machines can cost even more.

However, entrepreneurs on a tight budget can opt for used machines, which are available at cheaper prices. Leasing or renting vending machines is another option that is favorable for new entrepreneurs, as it allows them to start the business without much initial capital.

Scalability

Entering the vending machine business is not only accessible but offers opportunities for expansion by adding more machines or venturing into diverse niches. Over the past few decades, this industry has experienced remarkable growth, with projections indicating the US market could exceed $19 billion by 2030. This upward trajectory is fueled by demand for convenient shopping options, healthy vending options, and the continuous development of new technologies.

Flexibility

Entrepreneurship offers the flexibility to set your own hours. Once your vending machines are set up and running, you can choose to run the operation as a full-time or part-time gig. Regardless of your decision, you can generate a monthly gross profit of $140 to $500 for each machine, depending on several factors such as the products sold and the location of the machine.

How to Start a Vending Machine Business

Decide What You Want to Sell

Before getting started with a vending machine business, it is important to conduct market and industry research to identify viable opportunities. This includes considering the location of the vending machines and the target demographic. Some products are versatile and can be successful in a variety of locations, while others may be more appealing to specific groups of people.

For example, if you place your machine on a college campus, stocking snacks and quick meals would be more suitable than stocking over-the-counter medication.

On the other hand, an office building might be more favorable for a vending machine that dispenses beverages such as coffee, as workers would appreciate the convenience of getting an energy boost without having to leave the building.

Pro Tip: Join a Facebook group or other forum with vending machine owners to help you get an idea of what is (and is not) working for them currently.

Determine the Ideal Location

Just like any other business, the location of a vending machine can have a significant impact on its sales. Ideally, vending machines should be placed in areas with high foot traffic, such as office buildings, educational institutions, and shopping centers. These are places where people are constantly moving and are more likely to make impulse purchases, especially when they need a quick snack or beverage.

The target demographic and products you intend to sell should be considered when placing your vending machines. For example, if you are selling over-the-counter medication, you may want to place your machine near a public restroom. Additionally, you should consider security when placing your vending machines. You want to place your machine in an area where it is less likely to be stolen or vandalized.

Acquiring the Vending Machines

Vending machines come in a diverse range of sizes, shapes, and features. The ideal machine for you will depend on your budget, the products you want to sell, and the space you have available. If you are on a tight budget, a compact, single-product vending machine may be a better option. However, if you have a significant investment budget, you can choose more technologically advanced machines that are larger and more versatile. Newer technologically advanced models also offer cashless payment methods, which are in line with the times.

Buying new vending machines from the manufacturer gives you the most control over the features and specifications, and is the best option for someone looking to acquire multiple machines. If you are just starting, you may want to consider purchasing used vending machines from secondary sellers to help reduce your startup costs. Leasing is also a cost-effective option.

Vending machine franchising is another option. You purchase the right to operate a vending machine business under the franchisor’s brand and system. This requires a significant investment, but it is one of the best ways to get started because the franchisor provides training, support, and marketing assistance.

Acquire the Required Paperwork and Permits

To operate any business legally, you must follow the applicable laws and regulations. These laws and regulations vary depending on the city. Nonetheless, you will be required to register your business and apply for the proper federal credentials like tax information from the IRS. You should also consider engaging an insurance company to find the ideal coverage for your enterprise in case anything goes wrong.

Other licenses and permits may also be required depending on the nature of your business. However, you will most likely need a beverage license, food service license, seller’s license, and/or health inspection certification – especially if you intend to stock food products and beverages.

Make sure you do your research and consult with the necessary parties to ensure your vending machine business is in compliance with your state and local laws. You can always speak with an attorney for proper guidance.

Stocking, Restocking, and Maintenance

Once you have placed your vending machines and completed all the necessary paperwork, the next step is to find a supplier for your products. You can either buy the products you need right away or buy them in bulk, depending on the products you plan to sell.

If you are selling perishables, it is best to buy only the amount you need at a time, as these products have a limited shelf life.

However, if you are selling non-perishables, buying in bulk can help you save money on each item. There are a variety of channels to find suppliers including, online marketplaces, trade shows, or word-of-mouth recommendations. The same applies to restocking.

It is advisable to check your vending machines at least once a week when you are just starting. This will help you ensure that the machines are operating properly and that you are stocking the right products. You can adjust the frequency of your checks once you have a good understanding of your operation.

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