We see vending machines everywhere.
The sales of these small chocolate bars, snacks and soft drinks create a huge market.
In the United States alone, vending machines generate between $20 and $30 billion in gross sales annually.
So we know it can be profitable. But therealThe appeal of a slot machine shop is its ability to generate passive income. These machines don't care if you sleep, walk the dog or sunbathe, they drive sales day after day, week after week.
Quite fascinating if you ask me.
In this guide, we will cover four areas:
Part I: Introductory Questions About Vending Machine Business(What they are, how much they earn, etc.)
Part II: How to start a vending route(including how to do it passively)
Part III: How to buy a vending machine route(if you want a ready deal)
Part IV: Advantages and Risks of the ATM Business
That's a lot to cover, so let's get started!
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The information contained in this publication is for informational purposes only. It is not a purchase or investment recommendation and is not financial, investment, legal or tax advice. You should seek the advice of a qualified professional before making any investment or other decision relating to any of the matters discussed in this article.
What is a vending machine?
A vending machine business is a business where you have one or more vending machines in different locations and you earn money from the sales generated by these vending machines.
Much of the business consists of making regular trips to these locations. During these routes, you fill your vending machines with inventory and whatever coins you need to trade them. He also collects money from his vending machines.
Typical vending machines offer drinks or snacks. But there is a wide range of machines, even something as simple as aGumball Machines That Can Cost Under $200overpriced vending machinescan cost between $3,000 and $5,000.
Health food vending machines are also becoming more popular.
Vending machines can offer a variety of payment options, from simple coin payments to credit card readers (although some newer models also offer mobile payment options).
How much do vending machines earn?
Most vending machines earn less than $5 a week, but a successful one can earn much more. Some well located vending machines can bring in $100 a week or more.
A good rule of thumb for how much a machine must sell per week to be worth is $150. Another good rule of thumb is that office locations can cost $1.50 per person per week, and a blue-collar workspace can cost from $3 to $6 per person per week.
Those ones:Suitable for small businesses.
These ground rules can be helpful in determining which locations to target for your vending machines.
Do vending machines provide passive income?
Automated routes can provide passive income when structured properly. To make your game as passive as possible, here's what to do:
- Buy quality machines that don't need constant repairs
- Install inventory tracking software that optimizes your routes
- Hire reliable route brokers
- Have you established a machine repair service to repair your machines?
Once you implement these key processes, you will be well on your way to taking advantage of the residual income provided by your vending machines.
All of the above steps are important for your business to be passive and successful, but let's focus a little bit on the software you need to install on your computers.
To keep your business as streamlined as possible, you should install software on each of your devices that alerts you when supplies are low. This is essential for smooth and trouble-free operation.
This software can track sales (including cash, credit card and mobile payments) and other key metrics (including items that are selling well). This helps maximize the profitability of each machine.
Sales tracking software also helps keep your high street runner from pocketing cash from the machines as you can track everything down to the last penny. It can also alert you when there are errors on your device that you want to fix.
Where to buy tracking software for vending machines?
The following companies are major vendors of software for vending machines:
If you want to extend the operation of your vending machine, you can also do it passively. Just hire services that find locations for new vending machines. here is onePropertywhich offers several options.
How do I start a vending route?
The first thing you need to do is set up your vending machine business.
Select name and logo
This includes choosing a name and logo you like and creating a website (if you want your business to have an online presence).
Having trouble figuring out a name? To tryShopify Name Generator. It's free.
As for the logo, I have no artistic skills and limited technical skills, so I like a simple and user-friendly option.
checkoffers you a professional looking logo at reasonable prices. You can choose from hundreds of logo designs (depending on the parameters and preferences you select) before settling on the one you like. You can also customize to your heart's content. look at herHere.
to use– You want to make sure your name and logo are yours and don't infringe on someone else's intellectual property. If you are not sure, you can check this out.The USPTO Trademark Search Toolas a starting point.
configure your website
When it comes to your website, you don't have to be incredibly skilled or cost a lot of money to set it up. There are many resources that can help you with this.
In fact, Google allows you to do just that.Create your first business website for free.
It's also important to position your new slot business on Google. You can do this by listing it on Google My Business. This allows you to be found by people looking for vending machines in your area (imagine how awesome it would be if a local merchant called you to deliver a vending machine to your location instead of the other way around).
If you want to learn more about how to do this, read this.google instructions.
If your business is a corporation, LLC, or other business entity, you must specify that as well. You can hire a lawyer to help you or use many of the online resources that can help you form your business entity.
I likeTake Controlbecause they can get you up and running quickly and easily. They also have great resources to educate you on which entity type to choose and what the right status for your new entity might be. If you want to know more, check it out below.
You should consult your accountant and attorney before taking this step to understand the tax and legal implications of forming this type of organization for your business.
Buy your vending machines
After the initial setup, the next thing you need to do is get a vending machine to start your vending business. Pretty obvious, right?
There are many places where you can buy vending machines.
Where can I buy new vending machines?
Sale of the following companiesnovoVending machines:
Where can I buy used vending machines?
Sale of the following companiesnecessaryVending machines:
You should look at all available machine variants.
Find out as much as you can about the machines on offer. Then, based on your budget and goals, you can determine what types of machines you want to buy.
When choosing your strategy and the types of machines to buy, you must consider your target locations, your local demographics, ever-changing trends and evolving payment options. We discuss many of these factors in the Risks section below.
How do I find good locations for vending machines?
The best locations for your vending machines are places where large groups gather and lack convenient food and drink alternatives.
Here are some of the best locations for your vending machines:
- The factory
- nursing homes
- car dealers
- car workshops
Finding and securing a good location for your vending machine is probably the hardest but most important part of getting started. The quality of your website will be the most important factor in your profitability.
What are some concrete ways to start looking for the best locations?
We've already discussed the possibility of using a service that can find locations for you. It might not be a bad choice when you're just starting out.
If you want to be more hands-on, consider exploring the sites yourself. Go to the locations listed above. Look what they say. While many of these locations already have vending machines, this gives you an idea of what your competition is up to (i.e. what types of vending machines are there, are there opportunities to offer a better product, etc.).
I know someone who focused on schools. They were able to secure long-term contracts with the school board to supply vending machines to all schools in the district.
He shot his business.
They had to deal with vandalism and occasional repairs, but overall they handled this strategy pretty well.
You can useUnited States referenceto find local businesses that match your criteria. For example, you can look up the number of employees and get an idea of how good the traffic will be in that location.
If there is already a vending machine on site, don't give up. You might be able to convince them if you have a newer machine that offers better options or meets a different need (for example, healthier food and drinks). Filtered water vending machines, for example, can be a route for many offices that already have vending machines.
run your routes
We've covered this a bit already, but you must be willing to drive routes regularly (more often as your business grows). You can do this yourself or hire someone.
This will be the hardest part of the business. You need to stock inventory, deliver inventory to machines, upgrade coins and collect money.
No big deal if you have a machine. When you own a 200, it becomes a daily routine that requires significant logistical planning. Sales software helps a lot, but you (or someone you hire) still need to run the actual routes.
related reading: If you are concerned about the problems associated with running routes to your vending machine, consider an ATM-like business.
They are much easier to store. No need to keep track of all the different snacks and sodas and buy them when they run out. All you have to do is stock up on cash (and there are plenty of services that will create cash reserves for you). I signed upComplete Guide to Investing in ATMs for Passive Incomethat you might find interesting.
Buy a vending machine route
If you're looking for a turnkey business that already has great routes and is making money, buying an automated route might be a good option for you. Let's explore how to buy one.
Where can I find vending machines for sale?
The easiest way to find an existing machine route for sale is online. Here are some of the top sites that sell vending machines:
Listings often include selling price, revenue, and other important information that can help you determine if the business is right for you.
Important factors to consider when purchasing a vending route
Ask the seller why he is sellingDoes your explanation make sense? Ask probing questions to see if your explanation holds up. If something doesn't smell right, don't move until you feel comfortable.
check all machines. You want to make sure they aren't out of date or in poor condition. If they only accept cash this could be an issue. You want machines that accept credit cards (mobile options are a nice bonus).
Cash-only ATMs can be less profitable because they are cumbersome to use (and can eventually become obsolete).
Make sure the selling price is fair. You can hire a valuation specialist or use software likeBusiness Equity. If you look at enough offerings in your area, you can get a good idea of what's standard in the market.
Examine the numbers. They want machine sales reports. Examine them thoroughly. They also want at least 3 years of tax returns. Work with your accountant to ensure the numbers make sense.
Talk to site owners(if possible without the presence of the seller). See how they really feel about vending machines. Are you happy with the traffic? Is your relationship with the current owner good? Would you be willing to extend your contract?
Make sure your site contracts are in order. Check when site contracts expire. Look for exclusivity clauses that guarantee the site owner will only use you, and see if there are any changing control clauses. If there is a change of control clause, the site owner or manager can cancel the contract if the business changes hands.
It's best to have a lawyer review the contracts so you know the legal situation.
order oneletter of acquittalfrom the seller. This will let you know if the seller has unpaid taxes. You don't want to be on guard after the sale because of this.
Check with the best business office for complaints. It is always wise to do this last check.
Now that we've covered the basics of starting (or buying) a sales route, let's delve into the benefits and risks of this type of business.
Advantages of a vending machine shop
The main advantages of a vending machine business are: (i) Potential for big profits; (ii) passive income; (iii) independence; (iv) and scalability.
Potential for strong profits
We've already covered the potential earnings numbers, so I won't go into that again. The sale has the potential to generate significant profit for the business owner.
A handful of well managed and maintained machines located in high traffic locations can generate huge income for the owner.
We've talked about this before, but there are few things cuter than getting paid while you sleep.
When you have your own successful business, you are not accountable to anyone. This is hard to quantify.
Scaling up a vending machine business is very easy. Buy more machines and find great locations for them. There really is no limit to how big you can grow your business.
Risks of a vending machine business
The main risks of a vending machine business are: (i) competition, (ii) changing tastes, (iii) vandalism and (iv) obsolescence.
Risk: Like any business, the vending machine is competitive. So you might have competitors visiting the sites where your machines are and offering more money (a higher percentage of the machine's net profit) to the site owner or manager to squeeze you.
mitigation:Most owners and managers of the places where their vending machines are located will turn down a competitor's offer if you are a good business partner with them. If you have a contract with the website owner, you can include some sort of exclusivity clause to prevent the owner from working with a competitor while the contract is in effect.
To keep your site owners happy, make sure your machines are clean, working properly, and fully stocked. Also, pay them a fair percentage of the machine's winnings; You don't want them to think you've ripped them off when a competitor offers something better.
change the taste
Risk:Selling candies, soft drinks and snacks was a guaranteed way to make money for many years. However, as the general public's taste has shifted from these products to healthier alternatives, it has become more difficult to benefit from these products.
mitigation:Be aware of cultural shifts around diet and health, and don't be afraid to try new products (including some of the healthiest snack options available today).
Risk:Because vending machines are filled with cash and coins and are not operated, they can be tempting targets for thieves to steal the cash and goods inside.
mitigation:Machines in high-traffic indoor areas are largely immune to theft and vandalism, but machines outside are more vulnerable. Sturdy clips and guards can be purchased and placed over the coin box area to deter would-be thieves.
Switching to credit card or mobile payment technology also helps to avoid such losses.
Risk:Cash used to be the only way to buy goods from a vending machine, but modern payment options have made cash machines almost obsolete. If you don't adapt to this technological shift, you will likely lose sales because customers carry less cash than before.
mitigation:If you own vending machines or plan to get into the vending business, make sure your machines are equipped with card acceptance and/or mobile payment technology.
Vending machines can be a great way to earn passive income and get off the hamster wheel.
But as you can see now, buying a bunch of machines and waiting for the money is not so easy. If you want lasting success, you need to do the most important things to successfully run a profitable slot machine route.
This includes buying the right machines, finding the right locations, having the right tracking software, driving efficient routes, and protecting yourself from the major risks that come with this business.
If you want more great passive income ideas check out mineThe Ultimate Beginner's Guide to Passive Income [25+ Strategies That Work], where I cover numerous effective strategies that generate passive income.
One of my favorite passive income articles is my article onself-managed companies. In this article, I cover some great companies that can generate attractive levels of performance without much day-to-day commitment from the owner (vending machines are obviously included in the list, but there are many more). To hearHere.
If you're looking for other great passive income ideas that can be cheaper (and lower maintenance) than a vending machine business, check out my article on15 ways to earn passive income without money.