Can You Really Make Extra Money by Buying a Vending Machine?
You probably think of vending machines as your last snack outpost when you’re stuck in an office or airport. You probably don’t think of them as a cutting edge, profitable venture, but maybe you should. Did you know that these snack dispenser oases are often independently owned? Instead of renting them from the Coca-Cola Company, they can be profitably operated by people like you and me (assuming you are not the CEO of PepsiCo).
Earlier this year, NerdWallet analyzed the costs and benefits of using vending machines like a small business, offering a step-by-step guide to help you determine if an investment makes sense for you (presumably, other than making your childhood dream of owning candy come true). keep). Here are the main points to consider if you are looking to become a vending machine tycoon in your area.
The Trend of Vending Machines: Are They Really Profitable?
The pandemic has boosted business interest among people who own and service their own vending machines, especially among Gen Z people watching their peers flaunt their perceived cash flow through TikTok andYouTube . Last year, Vox talked about how now 20-year-old YouTuber Jamie Ibanez allegedly made six figures from the practice; In fact, as the article showed, most of his income comes from his YouTube channel . However, Ibanez told Vox in this interview that he bought his first vending machine after watching this YouTube video of someone wandering around and taking all that money from their machines. Inspirational!
Let me be the first to ever point out that TikTok and YouTube are not real life. How profitable is this venture really? Well, according to Vending Market Watch : very. Their latest industry report named 2019 a “record year” for convenience services operators. There hasn’t been a fresh report on this side of the pandemic yet, but there’s a general consensus on the internet that a return to personal work and travel is promising for the vending machine industry.
However, given variables such as location, number of cars, and the type of items sold, it is difficult to find an accurate estimate of how much income you can actually make from owning a car. NerdWallet reports that the average vending machine makes $ 35 a week, but vending machines that are “well stocked and housed in safe, high-traffic locations” can make you nearly triple that – over $ 400 a month.
Low start-up costs
The main costs of manufacturing vending machines are associated with the initial investment in the machine, and then with the supply of goods. A new car directly from the manufacturer can cost over $ 8,000, and used cars can be found on Craigslist or the Facebook Marketplace for as little as $ 300. You want to find a balance between a fancy, expensive car and junk that ends up being more of a hassle than it’s worth. To test this out, try to buy a vending machine and starter inventory for under $ 2,000. Of course, these inventory costs will depend on what you decide to sell.
Inventory selection
You are not limited to snacks and soda, especially if you want to target a specific market. According to NerdWallet , it is recommended for new merchants to start with a specialty – be it healthy snacks, drinks, or even fresh produce – until you learn more about the industry. Aside from the usual stuff, here are some thought-provoking ideas that might work for your business:
- Protein bars
- Juice
- Hot drinks through a special machine
- Inedible items such as tobacco (if allowed in your state), phone chargers, or laundry items.
Location, location, location
Your choice of inventory should be based on what is in demand in your area. Think about the places where you bought something from the vending machine. Viable locations are likely near schools, hospitals, train stations, laundries, or somewhere else where you are either in a rush or stuck with no other food options.
Once you’ve found the perfect spot, you can’t just throw your car out of nowhere. You will need to get contact information and get in touch with property owners and managers. Before doing this, prepare information on how your state licenses and manages vendors by contacting your local chamber of commerce or by reviewing your state’s online small business rules.
Key considerations
Beyond the start-up costs, you need to think about how sustainable your vending machine business will be for you.
- You need a license and tax number to do this legally (although it seems easy enough to achieve).
- You need to secure a home with a vending machine in a lucrative area with sufficient pedestrian traffic.
- You need a certain level of fitness as maintenance of the machines requires a fair amount of walking and carrying food.
With enough market research and careful decision making, the vending machine industry is available to almost everyone. If you are confident that purchasing a vending machine is your next venture, be sure to read the complete NerdWallet step-by-step guide . And, please, for me: shavings with salt and vinegar.