How to start a vending machine business

Selling goods through vending machines has become a lucrative side business for many entrepreneurs on Instagram and TikTok. These business owners claim to have earned an annual revenue of six to seven figures from their vending machine businesses.

The attractiveness of starting a vending machine business lies in its low startup cost, easy maintenance, and potential for generating passive income through outsourcing upkeep.

For instance, a business owner shared on TikTok that he purchased a vending machine for $600 on the OfferUp marketplace. In just three weeks, the vending machine-generated $318 in revenue. To note, the owner mentions that he marks up the item’s price by 100%.

However, as with any other venture, starting and growing a vending machine business also requires hard work and time. Ty Hill, the owner of Queen of Vending, initially earned only $20 in the first month of operating her first vending machine. But, after some time, one of her locations with two vending machines now earns her $1,500 monthly.

Vending machine

How to start

To start a vending machine business, one must indicate the expenses needed to get it up and running. The cost of vending machines can differ based on diverse factors, such as the type of machine, how it is maintained, and its location of purchase. The cost and profit margin also depends on what products you sell in the machine.

A TikTok post by Vending University explains the approximate expenses of starting a vending business: $1,000 to $2,500 for a vending machine, $250 for inventory, $100 to $300 for moving expenses, and $50 for cash and coins. The starting costs for a vending machine business typically range between $1,500 and $3,000.

Search for funding

After assessing the total expenses for starting a vending machine business, entrepreneurs have several options to finance their business, including using personal savings, applying for a small-business loan, or opening a line of credit. However, choosing debt funding means you’ll need to repay the borrowed amount, including interest.

Marcus Gram, the owner of Joyner Vending, used $10,000 of his savings to start his vending-machine business, and he further invested $5,000 in the purchase of his first two machines. Meanwhile, Maya Ray financed her vending-machine business, FYC Vending, using a credit card. She spent $6,000 on the first two machines and an additional $300 on the initial inventory.

Vending machine business

Once you’re ready to start the business, the next step is to search for suitable locations to place your vending machine. Afterward, conduct extensive research on each potential site to ensure that it’s a reasonable business opportunity.

When searching for a venue, prioritize ones that have a lot of people walking by, are open for a long time, and don’t offer fast food or beverages nearby. It’s also crucial to visit these locations in person to check if a vending machine or a similar service is nearby. It’s best to start by staying close to your home so you can frequently refill your vending machines and efficiently handle any necessary repairs.

Business expansion

Once you’ve found a few machines that consistently make a profit, consider expanding to other cities or states and hiring employees to assist with maintenance. Lastly, creating a professional appearance is significant when acquiring clients and competing with larger businesses.

To begin, make unsolicited calls to different locations, introduce your business, and inquire about placing a vending machine there at no charge. Aim to contact a minimum of three to five prospective clients every day.

Marcus Gram suggests that having a website, an email address, and a phone number can make your business appear professional, even if you’re starting. Obtaining business cards and branded polo shirts can go further in creating a professional appearance.

Vending machines

Only buy a vending machine after securing your first location

Vending-machine entrepreneurs advise against buying a vending machine before finalizing a deal with a location, and this is to prevent losing substantial money if the deal doesn’t work out. Customizing your vending machine to suit the location’s specific requirements is also essential.

Some managers may prefer a vending machine for beverages and snacks, while others may prefer one that only dispenses beverages. It’s also necessary to measure the space where you plan to install the vending machine, including any doorways or entrances you must pass through.

Vending machines can be purchased on Craigslist, Facebook Marketplace, OfferUp, or a vending machine warehouse. When buying a vending machine, ensure it has a card reader or add one to a used machine, as it can boost sales by up to 25%.

Subsequent steps

Once you’ve secured a spot, install your machine and fill it with inventory. Initially, you can buy snacks and beverages at wholesale stores such as Costco or Sam’s Club. As your business grows, you can collaborate with suppliers requiring larger quantities.

Ensure the machine is always stocked and running smoothly by visiting frequently. Leave your contact details with the building manager, and consider advertising your services. This increases your chance to make sales and minimizes downtime.

To increase your business’s productivity, you can expand your vending-machine business across multiple locations. Vending Factory is an example of a business that generates substantial profits, and it verified with documentation that it earned over $242,000 in sales in 2022.