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How to Start a Vending Machine Business

Being able to grab the items you need and move on with your day is the beauty of a vending machine. If you are looking for a great way to generate some additional income and do so without a lot of manual labor, consider starting a vending machine business on a property with lots of traffic.

How To Start a Vending Machine Business

Just like starting any other business, you have to go through the standard business steps to determine which vending machine business is right for you and what will be the best option for the customer-base. You also need to determine if your vending machine business will be a corporation or an LLC.

Corporation vs. LLC

The corporation and the LLC are both two different business models that must be determined before any business can be created. The owners of a corporation are referred to as shareholders and their percentage determine how much of a company they own. This is a great option for multiple partners. It is easy to shift the "shares" or ownership of a corporation to different partners if the situation arises.

The LLC has a business operating agreement that must be on file to determine how the company should be run when successful and if should be dissolved. If no agreement is listed on file, then the LLC is subjected to the default state agreement. LLCs have the ability to be taxed as sole proprietors, which is beneficial in the case of a vending machine.

Steps on How to Start a Vending Machine Business

Once you have decided on the appropriate business structure for your vending machine business, you need to follow the steps below to ensure you are successful in your business.

  1. Determine what type of vending machine business you will have
  2. Locate the market that is right for this product
  3. Choose a location for the vending machine
  4. Select an appropriate vending machine style for your product and customers
  5. Stock your vending machine

1. Determine What Type of Vending Machine Business You Will Have

While snacks or drinks may come to your mind first, the last decade has shown that you can really put anything in a vending machine. The purpose of a vending machine is to make sure you have items that customers will need and can access quickly so that they can move on with their day. Outside the obvious, you can have vending machines for the following:

  • Microwaveable meals
  • Health and beauty products
  • Hot or cold coffee products
  • Hot food products
  • Frozen ice cream products

You can come up with new ideas or take one of these great options that are generating lots of attention and business. Once you know what products you want to pursue, you can move forward with the next step.

2. Locate the Market That is Right for This Product

Knowing what you are going to sell means you need to find the right market where these items will be purchased regularly. For example, if you are placing your vending machine outside at a sports complex, frozen ice cream products will get a lot of traffic as opposed to hot coffee options. Below are areas with lots of foot traffic that could generate a substantial income for vending machines.

  • Shopping Plazas
  • Sports Complexes
  • Schools
  • Hospitals
  • Large offices
  • Manufacturing facilities

Give yourself a list of at least five locations where you think your market base is and go and visit these areas. Make sure there isn't already a vending machine in the area with the same concept. If there is a lot of foot traffic in the area, then healthy competition may be welcomed, especially if the market base wants some diversity in their options.

3. Choose a Location for the Vending Machine

Once you have visited the different location options for your vending machine, you need to decide which location is right for you and your product. Great locations for vending machines include the following:

  • Business offices
  • Apartment complexes
  • Manufacturing Plants
  • Auto Shops
  • Hotels
  • Shopping Plazas

If you are planning to start with multiple machines, you will need to decide on multiple locations and generate a route that works for you when checking on these different machines. Establish a relationship with business owners and administrative members of organizations. If the businesses you chose has multiple locations, reach out to their district manager to get more information about what is available for these spaces.

4. Select the Appropriate Vending Machine For Your Product

Not all vending machines are made the same, so you need to scan the different types of vending machines and determine what works best for your product.

  • Combo vending machines
  • Coffee vending machines
  • Frozen vending machines
  • Hot food vending machines
  • Standard vending machines

If you do not need heat or freezing temperatures, then some of the more standard machines may work for your needs. However, if temperature is a factor, then you need to move forward with the right vending machine.You can even have a vending machine customized to fit your product if you are not able to utilize any of the existing models when you reach out to the vending company.

It is also important to make sure the vending machine in questions has multiple pay options for your customer. While so many have moved to cards and technology, having a cash option is still a good idea for those who are not comfortable using their cards to make these purchases.

5. Stock Your Vending Machine

Once you have secured the contract with the property owners or managers for the vending machines, you need to have them moved into place at the start of the contract and have it stocked. Nothing will deter a market group more in the vending industry is to see an empty vending machine sitting for long periods of time without products. The sooner you get your vending machines stocked, the sooner you can start generating income.

For the first few weeks after you stock your vending machines, you want to come and check on your products at least twice a week to get an idea about what is selling and how fast it is going. You will get an idea of what products are the most popular and maybe what isn't selling at all. This will help you adjust your inventory and determine what is needed at each location.

Establish a Regular Route

While you may start your route multiple times a week in the beginning, you will start to se what areas are selling more frequently and what areas maybe only need to be stocked once a week. Make sure you are visiting each location regularly so that you can speak to some of your customer base and check on your vending machines. What you do not want to do is put up a machine and only come once a month for restocking and collecting any cash or coin in the machine.

If you keep your machines stocked regularly, you can expect to generate a steady income from these machines over time. A vending machines success is as good as its owner paying attention to the trends and maintaining the demanded products for its market base. One of the biggest fails in how to start a vending machine business is to not keep up and maintain the business over time, even when there are slower times.

Maintaining Quality Food

Any vending machine that has food, whether it be cold sandwiches, snacks, or hot coffee needs to remove any expired products periodically. This is why it is important to establish a regular routine and inspect your products. If there is expired food being sold regularly, you could be sued by a customer who was sick after eating your food. In many cases, customers stop trusting your products and will refrain from purchasing from your vending machine.

Visit Your Locations After Storms

If a storm hits the area where your vending machines are located and the power may have gone out, you'll need to get out and service these machines right away. You do not want to be liable for any sickness caused because the products will need to be thrown out. You may also need to clean the machine and make sure there isn't any damage done to it.

Regular Maintenance for Vending Machines

In addition to checking and maintaining your stock in your vending machines, it is essential that you maintain the different services and repairs that come with your vending machines. This is crucial if you have products that require a certain temperature and need to maintain food safety or medicinal safety. You can schedule annual inspections and maintenance services with the machine manufacturer to keep them updated and working consistently.

There are times when vandalism and theft can also happen to your vending machine. You want to keep an eye on your machines and have them repaired if there is any damage. Also, if you are planning to utilize the internet for credit card payments, you should make sure these systems are working. Without internet access, customers will not be able to use these cards for purchases.

FAQs on How To Start a Vending Machine Business and What To Expect

Below are some of the most common questions that come with those who are interested in starting a vending machine business and what they can expect.

How Much Does a Vending Machine Cost?

If you are looking to purchase a new vending machine, you could pay anywhere from $5,000 to $10,000 depending on its size and the features that it has available. Older and more traditional vending machines are approximately $1500 to $2000 and are great options if you are just getting started.

Where Do I Purchase My Stock?

If you want to reach out to the manufacturer directly for your stock, you do have that option, especially if you have a lot of vending machines to supply. However, if you only have a few machines, you want a membership to one of the Big Box retailers that offer wholesale prices to their customers like Sam's Club or Costco.

How Much Income Can I Expect From a Vending Machine?

A vending machine is as successful as the owner, and one machine alone can provide a substantial income. If you get into a niche with your vending machines and start putting more around the area, you will see your income grow, as well. A single vending machine can generate up to $75 or more a week in revenue and over $300 a month when it is maintained properly. If you have higher priced products however, you could see these numbers increase, such as medical supplies being available for staff in a hospital.

This means that you shouldn't expect a single vending machine to generate a full time income, but as your vending machine business grows, and you generate a sufficient amount of machines, you could see substantial earnings. It is a great option for a supplemental income because it only requires a few hours a week to restock the machines.

Are Vending Machines Expecting to Maintain Popularity in the Future?

Although vending machines sales dropped significantly through the pandemic, they have started bouncing back in 2021 and 2022, with the vending machine market worldwide expected to make over $140 billion by the year 2027. This means that you have a chance at becoming a part of that number and can expect to see a turn in profit.

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Dana Hanson

Written by Dana Hanson

Dana has extensive professional writing experience including technical and report writing, informational articles, persuasive articles, contrast and comparison, grant applications, and advertisement. She also enjoys creative writing, content writing on nearly any topic (particularly business and lifestyle), because as a lifelong learner, she loves to do research and possess a high skill level in this area. Her academic degrees include AA social Sci/BA English/MEd Adult Ed & Community & Human Resource Development and ABD in PhD studies in Indust & Org Psychology.

Read more posts by Dana Hanson

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