How to Start a Vending Machine Business? Should I start a Vending Machine Business?
The vending industry as a whole is full of opportunities now, especially post-2020. It’s a perfect way to have quick sales, make money, own your business and ultimately gain financial freedom and get your time back.
You might have found this blog article because you are researching and thinking about a way to make a little extra money, perhaps you love reading about side hustle ideas, maybe you need to earn more money to pay for your kids’ college, or another possibility is you are just sick and tired of your 9-5 job and are looking for a way to get out of the rat race. Maybe you hate your boss and it brings you relaxation to dream of opening up your own business. Which brings us to this point now, where you are Googling the vending machine business, or in particular the healthy vending machine business opportunity.
Word of WARNING: I realize your time is precious but do yourself a favor and read this article before committing to purchasing a franchise or joining a healthy vending machine franchise-like program that makes HUGE promises of accelerating your business. There are several out there with huge marketing budgets and excellent sales people. They DO one thing well. Sell you expensive packages that make it difficult to earn your ROI in a short time. Don’t fall for traps of awesome locations. Trust me, there’s always a catch. There is always a large con vs. the small pro. There is no short-cut in the Vending Business. Just spending an extra 2 weeks you’ll be able to learn on your own (with help from us and our community) what you need to start a successful business and not spend unnecessary money. You can take that money you save and invest it in your business by buying more machines, getting locations or better technology, which later we will explain is important.
Now let’s get on with answering the big question.
SHOULD I start a vending machine business?
I’m of course here to say, YES.
Please stick around, because we’ll help you take that idea and dream and turn it into a reality. We’ll help you TAKE ACTION, make the right decisions, be your cheerleader, encourage you when you are down and ultimately achieve your goal of financial freedom. We’ll spend time also speaking about your particular background and how much time you have to spend on the business. Is it part-time? Full-time? Do you have time during business hours? How much money do you have to invest? Decide beforehand. How well do you know yourself? Do you have follow through? Or, do you try things out for a little bit then change to the next shiny object. Depending on how you answer these questions we’ll tweak the strategy. Let’s say you are still in a full-time job, you can still pull this off, but you’ll need to factor some of the challenges and we have secret hints that can make this work! If you are the shiny object person I would suggest not doing vending machines, because starting a vending machine business takes real commitment and it takes real investment. If you decide to do it, you need to be sure to not give up, to grind it out, because you need to for success. That’s the benefit of joining our community because you need other like minded people doing the same thing to keep you motivated, to keep you from giving up, and to stay focused on the goal of building your vending machine empire!
Are you ready to change your life? Then keep reading.
The reason why I love the vending industry is because it’s an old industry that is ripe for disruption where there are a lot of old vending machines with bad service and old food that need replacing. It’s not rocket science and anyone willing to roll up their sleeves, put in some hard work can become VERY successful. And, not just successful in the short term, but successful for the long term where you can build a future for your family. And, it’s a perfect family business where everyone can be involved.
- Vending machines create cash!
- Vending machines are passive income.
- Vending machines are assets.
- Vending machine business has value and can be sold later if you decide to get out.
- Vending machines are recession proof.
- Vending machines are inflation proof. Meaning the money you spent on the vending machine will continue to generate cash at the new inflated value, because as prices go up, you can also raise your price.
- Vending machines can diversify your investment portfolio. I’ll explain this later in my article on creating multiple income streams.
Study Up on The Business Model
The first step in starting a vending machine business is not going out and buying a machine impulsively, nor is it going out and registering an LLC. Yes, you heard me. DON’T get suckered into buying overpriced machines that come with lifetime coaching and education. Okay, well maybe it’s okay to read a bit on what machines are out there. The first step is actually choosing your strategy. There are a lot of vending strategies out there. But, I will actually help you save time, by ignoring all the noise and focusing on a High Quality & Healthy Snack Vending Business with Excellent Service that also provides traditional junk food items. We’ll talk more about why later.
The basic business model is this. You place a machine for FREE (no cost to the location) They provide a spot for it in their breakroom and an electrical outlet. You service it once a week. Because you’re local and a family owned business you care about doing a good job and won’t let them down. You earn your money on the sales of the products from the machine. This is not an original idea and people have been doing this for decades.
Market Research and Evaluate Competition
The second thing to do is maybe just as equally important as the first. Choose your first target area you want to serve, and do some market research.
Do a google search in your local city and surrounding areas, and see what other vending machine service providers exist. Read their websites and see what their service is like. Think of how you can differentiate your business from theirs. We’ll talk more about this later in our sales and marketing strategies.
Drive around preferably around 9am or 10am after everyone has arrived at their office or place of work and look for parking lots full of cars. Walk inside and talk to the receptionist. Have a conversation. Tell them that you are starting a local vending machine business and ask them if that is something they could see at their location. Or, if you don’t want to drive you can call around. Talking to people in person is often the better route. It would be even better if you bring them a small gift of some healthy snacks. Kind Bar, Clif Bar, Luna Bars often work well.
- I often ask them, “you as someone who works here, would you be interested in having a healthy machine in your breakroom?” This often can be a good conversation starter.
- Ask what kind of snacks and drinks they like?
- Would they be interested in healthy snacks like Clif Bars? Luna Bars? Vitamin Water? Or, other snacks that you typically find at Trader Joes or Wholefoods.
- If they say they already have a vending machine, ask them what kind it is? Traditional junk food type machine, or a healthy machine? Are they happy with the service? Because, maybe it’s an old machine that gets stuck and they have to bang on it to get their money back. Or maybe it always has expired food in it. Don’t get discouraged in the beginning when speaking to people if they already have machines. We’ve been able to get the previous operator removed on several occasions, because they took the location for granted and just left them with an old machine and hardly came to fill it.
Start Researching the different types of Vending Machines
Now you can research more about vending machines, you could do this before step 1, but I assume you’ve seen vending machines before. Or by the time you are reading this article you’ve probably already seen what’s online. Call a few local vendors that sell machines and go talk to them. Work with a local vendor so you can see the machines in person before buying them. Ask about support? Will they provide technical support with the machine? Is there a warranty on the machine parts? If something breaks how easy would it be to fix on this particular machine.
- Before going to the vending machine dealer understand what composes a machine. We’ll add an article later on all the terminology you need to understand.
- (e.g. VMC, credit card reader, auger, motors, dex, mdb, antenna, high gain antenna, refrigeration, temperature, humid climates)
- Research about payment processors and software.
- Payment Processor: This is the credit card reader on the vending machine. It MUST have a cell signal on it, so it transmit info real time to the cloud.
- What software platform will be available that houses the sales data coming back from the machine?
- Does the software track inventory for you? Will you be able to monitor if the machine needs a fill and with what products? After you fill the machine what do you need to do in the software to update it so it knows you’ve filled the machine.
Where will you purchase your supplies?
You need to find a place where you can buy your product cheaper. You won’t be able to use the larger food distributors when you first start out. Don’t listen to the sales people tell you about how convenient it will be to source product. It is way TOO expensive until you pass 20 machines. It is better to rely on Sams Club, then Costco, then Amazon, then local grocery store when you are in a bind.
- Sams Club
- Vistar – when you have 20 machines or more.
Is your foundation stable?
Review your finances and make a budget. You’ll need to make an upfront investment to get this venture off the ground. But, whatever you do… PLEASE do not finance your machines. In other words, don’t borrow money to buy your vending machines. If you don’t have any cash to invest, I suggest you read another one of my articles to know what to do. I don’t care who promises you lucrative locations. It NEVER works out the way you think. The last thing you want to do is get in to debt if something goes wrong. It is WAY too risky. There are better ways to do things without putting your family at risk.
Did you talk to your spouse yet? Or, is this still a crazy idea you’re staying up late and reading about on the internet. Talk to your spouse, consider your own personal situation. Does your spouse work? Can they help or are they willing to help in this new business venture? We’ll touch on this subject more in the future, but it is SO important that your entire family or loved ones are on the same page.
While we are on the topic of talking to your spouse, I suggest you take this time to also do some introspection. Take a skills inventory. Make a list of the things you are good at, then make a list of a few things you are not as good at. Then look at the list of things you are good at so you end on a positive note! If talking to strangers is something you would put on the weakness side of the list, then you will have to prepare yourself mentally to get over that fear. YOU CAN DO IT! I believe even introverts can do it, because people relate to people that are authentic and real. Be yourself, and we’ll help you!
After all your research, are you ready to take the plunge?
Come up with a company name, make some flyers, business cards (don’t need to register your LLC yet) and a website. Draft a simple agreement. Basically, one that says you will not charge the location to put it on site, they will make best effort to not damage it… yada yada. You can find one on the internet. When I get my act together I’ll post one here for you.
Start knocking on doors, oh and bring them a nice gift basket of snacks. People tend to listen when you feed them and give them something free.
Go secure a location first. You can already pre plan and have a vending machine supplier in mind already and work out all the details with them, so that as soon as you secure a location you can pull the trigger on the machine. I know you want to buy the machines first. But, just resist the urge and temptation. It’s fun to spend money and think you are investing, and getting into the rich guy persona that you have to spend money to make money. Well, you do, but do it wisely. Rich people also save money and don’t throw it away. I need a good quote to insert here later. hahaha…
Hooray! Someone agreed to place a machine! Go buy the machine and get it on order, have them deliver it direct to the company so you don’t have to pay storage fees somewhere.
Okay the last items to do:
- Buy stuff and go fill the machine
- Register your LLC or DBA
- Get business liability insurance you might need to even provide a copy of this ahead of time to your location.
- MAKE MONEY!! You are done. You are now the proud owner of an AWESOME Vending Machine Business.