three vending machines
Timothy R
By: timothy-ronaldson
Read in 21 minutes

How To Start a Vending Machine Business: A Step By Step Guide

There are many unique and profitable ideas for making money as an entrepreneur, and a vending machine business is one of them.

If you want to start a business in this industry, read on to find step-by-step instructions and some tips that will help you on your journey.

Table of Contents
1. What are vending machine businesses?
2. 5 steps to starting a vending machine business
3. Vending machine licenses: What do you need to open this business?
4. Cost of vending machines business
5. Vending machine business plan
6. Is a vending machine business profitable?
7. Vending machine business: Pros and cons
8. Vending machine business ideas
9. Tips to success with vending machine businesses
10. It’s time to start your business!
11. FAQs 

Apply for a microloan and start your business

What Are Vending Machine Businesses?

A vending machine provides a convenient way for people to get food, drinks, and goods that they need or want.

The traditional model involves food and drinks. But, today, you can set up a vending machine in a mall, for example, and sell electronics, such as phone chargers or even more.

With people living increasingly busy lives, they are often looking for ways to get what they need quickly, without having to stop into a store or take a lot of time to make a purchase.

Vending machine businesses own and operate these machines.

While large businesses dominate the industry sector, many smaller ones are also very profitable.

If you’re thinking about starting a vending machine business, you can come up with some unique ideas for how you can serve the general public.

You can become very profitable if you have a good vending machine business model.

If you want to know how to start a vending machine business, the best thinking you can do is get informed about everything you need before actually starting.

Types of Vending Machines

Vending machines come in all shapes and sizes, but they can broadly be classified into four main categories: snacks, drinks, combo (snacks and drinks), and specialty.

Snack vending machines are the most common type and one of the most profitable vending machines.

As the same suggests, they vend snacks like chips, candy bars, nuts, etc.

Drink vending machines are, unsurprisingly, vending machines that vend drinks like soda, juices, energy drinks, and water.

Combo vending machines are a combination of snack and drink vending machines in one unit.

They offer a wider range of products than either type of machine on its own.

Specialty vending machines are those that vend non-food items like cigarettes, laundry detergent, and even live crabs!

These machines are less common than the others, but you can find them in high-traffic areas like airports and train stations.

#CaminoTip
You can come up with a few vending machines and start your own company.

5 Steps to Starting a Vending Machine Business

Here are some basic steps to starting your own vending machine business.

Choose Your Focus

The first step is to choose the focus of your vending machines.

What will you sell?

You could focus on food and beverages, bulk vending (such as stickers or gumballs), or specialty vending (such as laundry products).

A good idea is to start with just one focus and then branch out into other sectors once you have proven your business model.

Find and Secure Locations

The next step is to find great locations for your vending machines. Consider what you are selling and the areas where your products are most likely to sell.

Food and beverages will sell well in public and private cafeterias, shopping malls, and retail centers. In contrast, retail vending products would sell well at airports or train stations.

After figuring out your ideal locations, you must secure them through a contract. This is where your sales skills will come in handy.

You want to communicate clearly to the building owner why they should allow you to set up your vending machines in their location. The best idea is to share the benefits you’ll bring to them and how you’ll make their life easier.

Get the Vending Machines

Now, it’s time to actually acquire the machines themselves.

You can go to a wholesaler, bulk vending machine distributor, or a manufacturer, especially if you’re looking for a state-of-the-art machine or need multiple machines.

You can also purchase a singular vending machine from secondary sellers. This will help you reduce costs by purchasing used products that still work well.

How To Own a Vending Machine

There are a few ways to own a vending machine:

  • The most common is to purchase one outright from a vending machine distributor. There are also plenty of used machines available for purchase online.
  • Another option is to lease a machine from a provider. This can be a more cost-effective option, especially for first-time owners.
  • Finally, some companies offer vending machine franchising opportunities. This option typically requires a significant investment, but it can be a good way to get started in the vending machine business.

No matter which route you choose to take, owning a vending machine can be a great way to earn extra income. With some basic knowledge and a little bit of effort, you can be well

Stock the Machines

Next is the inventory stage.

You’ll need to secure purchasing contracts with stores or companies that provide the products you’ll stock your machines with.

Naturally, the higher quality of the products you select, the better they will sell.

Your profitability will depend on how much you pay to acquire the products. So, shop around and negotiate the best purchasing contracts you can.

Fund Your Business

Many small businesses fail because they don’t have adequate funds.

You must search for and secure the proper funding for your company. At this stage, you can explore equipment financing, taking from your savings, borrowing from friends and family, or getting a short-term loan.

While starting this type of business may not take as much capital as other industries, you’ll still need a decent amount of funding to get your company off the ground

A great option could be a microloan through Camino Financial, which will provide many benefits and flexibility to people starting a vending machine business.

Vending Machine Licenses: What Do You Need to Open This Business?

Like any other business, the state and municipalities where your company operates will determine whether you need any specific permits or licenses in vending machine industry.

Likewise, what you will sell will determine the license needed for your vending machine business.

If you decide to go for the traditional food and drinks model, your business will need health and food permits, depending on whether you’re selling pre-packaged food or food that the machine heat and prepare.

Some other legal documents you might need are:

  • an operator’s license
  • a seller’s permit

These licenses and permits will largely determine the cost of a vending machine business.

Check with your state’s regulatory agency to make sure you know exactly what licenses you’ll need.

Keep reading: How to start a business as an immigrant in the US.

Cost of Vending Machines Business

Several costs go into running one of these businesses.

You have to dedicate the upfront cost of a vending machine business to the initial investment or purchase the machines, get your licenses and permits, market your services, and fill your machines with the inventory.

The startup costs could range anywhere from a few thousand dollars to much, much more depending on how many machines you will start with and if they’ll be new or used.

  • A refurbished vending machine could cost you around $1,200 to $3,000
  • A new one could cost approximately $3,000 and even up to $10,000

Alternatively, instead of buying a vending machine, you could just rent it.

#CaminoTip
You can keep your initial costs relatively low and then build a profit that you can reinvest into more machines.

After your business is off the ground, the business costs will be related to keeping the business working correctly.

This may include buying new parts and either replacing them yourself or paying someone to do it for you.

Of course, ongoing costs will include inventory to restock the machines and administrative expenses such as rent for placing your machines in certain places.

Keep reading: How does it cost to start a business.

Vending machine business expenses

There are a few key expenses to keep in mind when running a vending machine business.

  • First, you’ll need to purchase the machines themselves.
  • Depending on the type and size of vending machine you choose, this can cost anywhere from a few hundred to a few thousand dollars each.
  • Additionally, you’ll need to stock the machines with products. This will require an initial investment as well, and you’ll need to factor in the cost of regularly replenishing inventory.
  • Finally, you’ll need to think about the costs of servicing and maintaining your machines. This can include things like repairs, replacement parts, and occasional deep cleaning.

While these costs may seem daunting at first, remember that a vending machine business can be a very lucrative endeavor if done correctly.

With careful planning and execution, you can make your investment back many times over.

How to buy a vending machine

There are a few things you need to consider when purchasing a vending machine:

  • What type of products will the vending machine vend?
  • Where will you place the vending machine?
  • How much money do you want to spend on the vending machine?
  • Do you want to purchase a used or new vending machine?

Once you have answered these questions, you can begin your search for the perfect vending machine. Online vendors typically sell used machines at cheaper prices, but there is less variety to choose from.

Vending Machine Business Plan

Before venturing into any business, it is always best to have a plan as a business owner. This document will outline the steps necessary to create a vending machine business plan.

  1. Define your business goals. What are your objectives for this business? What do you hope to achieve?
  2. Research the vending machine industry. This includes understanding the different types of machines available, the competition, and the potential market for your products or services.
  3. Develop a marketing strategy. How will you promote your vending machines and attract customers?
  4. Create a financial plan. Estimate start-up costs, operating expenses, and projected revenues.
  5. Write your business plan. This should include all of the information gathered in the previous steps.

A well-crafted business plan will increase your chances of success in the vending machine industry.

Follow these steps to create a plan that can help you achieve your business goals.

Is a Vending Machine Business Profitable? Here are some reasons

The quick and easy answer is that, yes, the industry can be very profitable.

While profits can be as low as $50 per week, they can also bring in a substantial profit of $500 or more per month.

It’s kind of a passive income. Once you set up the business, you don’t have to interact with customers; just restock the machines.

You should also consider that the most profitable vending machine company generates a lot of money because they have multiple vending machines.

It’s not about how much profit just one machine makes, but how much total profit your company earns.

In other words, $500 per month may not sound like a lot of profit but just one machine. But if you have 20 machines, that’d be $10,000 per month!

Vending Machine Business: Pros and Cons

Pros

  • There are a lot of advantages of operating a business in this industry.
  • The first is the low costs associated with this startup. Not only are the vending machines themselves relatively inexpensive, but you can scale your business over time as you make more profits.
  • Aside from doing research and marketing on locations and getting the actual machines up and operational, the daily work is relatively minimal.
  • In fact, it’s more about administrative work than it is anything else.
  • You can control the growth of your company, which in turn will influence how much you have to put out in terms of cost.
  • And, finally, it’s a relatively simple business to run. While the most successful business owners are undoubtedly savvy and organized, it doesn’t take any particular hard-to-obtain skillset to succeed.

Cons

  • Some of the disadvantages of a vending machine business are the following:
  • You will have to commit a lot of time to the company, often running around to multiple locations to manage your machines.
  • If you have numerous machines spread out, you’ll be spending a lot of time on the road just traveling from one machine to the next.
  • You’ll need to do this regularly, too, so you can collect the money, make sure they’re well-stocked and running well, and then deposit the money into the bank.
  • Another disadvantage is that your machines are easy targets for vandalism and theft. This is why it’s essential to ensure that the locations for your machines are safe and secure, with possible video surveillance to protect your investment.

#CaminoTip
You could also consider buying insurance for vending machine operators.

Vending Machine Business Ideas

There are many different vending machine business ideas you could pursue that could result in profitability.

You could go the more traditional route and provide packaged beverages and food.

Or, you could go the route of a specialty vending machine.

  • Beverage vending machine: This could include hot beverages, such as coffee products.
  • Custom Vending Machines: It could also include locating your machines in laundromats and providing laundry products, such as detergent, dryer sheets, and fabric softener.
  • With bulk vending machines you could also sell retail products such as headphones, neck pillows, and phone chargers.
  • or beverage vending machines with soda, water, or te.
  • Nowadays, with the health concerns caused by the pandemic, a facemask vending machine could do quite well.
  • If you live in a rainy state, you could take advantage of that and sell umbrellas.

If you’re thinking about starting a healthy vending machine business, there are other ideas:

  • Pill dispensing machines. People can administer medication and other pill-based products.
  • Frozen food vending machines. You can fill these machines with healthy frozen meals, and snacks.

In other words, there is no shortage of ideas for how you can create a successful vending machine business.

If you want to consider more options, you will find other profitable business ideas to start in this article. 

#CaminoTip
If you want to get more extravagant and unique ideas, research Japan’s vending machines. You could say the country is the creative expert in this industry.

Vending Machine Business Names

Coming up with vending business names can feel as important as choosing what you’re selling.

Try to come up with something catchy yet not distracting.

This could include something such as Food and Beverage Oasis, Vendorama, or Vending Express.

You want your business name to be catchy and explain what you sell without distracting too much.

But, on the other hand, don’t try to overexplain what you do or get too cute.

Keep in mind that while your name is vital to your overall success, it won’t affect your day-to-day sales much.

The crucial aspect is the business relationships you forge with the supply companies and places where you’ll locate your machines.

Tips to Success With Vending Machine Businesses

Where to put a vending machine? Best places to put a vending machine

After selecting the type of vending machine, you want to offer and the products you want to sell, one of the most important factors in the success of your business is its location.

Not all locations work for all types of vending machines.

You should think about the items you are selling and then consider where people might want to buy those products.

For example, if you’re selling packaged drinks and snacks, good locations could be shopping malls or retail centers, grocery stores, apartment complexes, public swimming pools, and large office complexes.

But the truth is that there are many vending machine business opportunities.

No matter what products you choose to focus on selling, it’s essential that your keep your vending machine appropriately stocked at all times.

Some ideas for opening a vending machine business:

  • Offices
  • Universities
  • Malls
  • Airports
  • Movie Theaters
  • Hotels
  • Hospitals
  • Train Stations
  • Bus Stations

Market It to Consumers

After choosing your location, why not ask if you can set up a couple of posters showing the location of your vending machine?

This will allow you to get more customers than you normally would.

Keep Them Stocked at All Times

You never know when you’re going to make a sale, so you want to make sure that every product you offer is available at all times.

If the inventory is low or completely absent, you will miss out on a sales opportunity.

Build Good Relations

Finally, make sure to market yourself to your locations properly.

Building owners and people who run locations where you’d like to place your vending machines want as seamless an experience as possible.

Explain how you’ll make their lives easier, and you’re more likely to secure your location.

It’s Time to Start Your Business!

Are you ready to start a vending machine business?

While some may not think it can be lucrative, this industry can be very profitable.

While starting a vending machine business may not take as much capital as some other types of companies, you’ll still need sufficient funding to get your business off the ground.

A great option for this funding is to get a Camino Financial microloan. We work every day to help our clients by providing great loan options and educational resources.

Apply for a microloan and start your business

FAQs

Do Vending Machines Make Good Money?

Vending machines can make a solid profit. The most important factor in this is your location and selling the right products.

Which Vending Machine Is Most Profitable?

Packaged food and beverages often make the most profit for their owners. That’s because they appeal to a mass audience and don’t rely on a specific type of person or someone who has a lot of money.

Is Vending Machine a Good Business?

Yes, vending machines can be a good business for someone dedicated to putting the time and effort into building their craft.

What License Do You Need for a Vending Machine Business?

At the very least, you’ll need local licenses to operate in your state and municipality. 

You may also need additional ones, such as food licenses if you’re selling prepared or packaged food.

Where to Buy Vending Machine Businesses?

You can always buy another local vending machine business and take over what they have already built. You can find some of these for sale at online business exchanges or through your local chamber of commerce.

How Does a Vending Machine Business Work?

Vending machine businesses have a straightforward model: buy the machine, stock it up, and place it somewhere to attract customers. Most of the time, you’ll have to pay a monthly rent for that space.

Then, you’d have to go back to the machine regularly to collect the money and stock it up.

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