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How To Start A Vending Machine Business

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Benefits of a Vending Machine Business

Owning anywhere from a few to a few hundred vending machines can be a manageable, successful business for owners of any experience level.

The cost to start a vending machine is basically just the cost of the machines and stocking them—you won’t need an office space to house them. Additionally, all you have to do is maintain the machines through repairs, restocking, and collecting the money from the transactions.

Before You Get Started: Choose Your Business Structure

When starting a vending machine business, the most important acquisition is a few vending machines. In order to scale up your business and collect the profits legally, and claim business expenses on your taxes, you’ll have to set up an LLC or corporation.

Steps for Starting a Vending Machine Business

Step 1: Consider Your Possible Products

Food vending machines are popular and simple, but there are also options for vending machines that vend items in bulk or vending machines that provide specialty products.

If you’re starting food vending machines, you can choose a theme for your machines. Providing healthy snacks in schools could be a good road to go down because schools want to provide students with good nutrition. In general, you can tailor your offerings to the market space you want to break into.

Step 2: Find the Right Location

Depending on what kinds of machines you have, you can start to find space in commercial businesses and craft a route. Since it will be you or an employee refilling and repairing the machines, you’ll probably want them to be not too far away to start. As you expand your business and bring on more employees, you can start to cover more territory.

Placing vending machines in local businesses means you’ll want to start making connections with local business owners and talking up your services. If you’re looking for a contract with a school district or a business that has several locations, you’ll want to get in touch with a regional manager or whoever does larger-scale location management projects.

Step 3: Choose the Right Type of Machine for Your Business

There are three types of machines: bulk, electronic and mechanical. Bulk machines hold a single product in bulk and dispense a certain amount for a quarter or a dollar. You often see this in restrooms, dispensing sanitary products for example. These can cost $50 to $200 to start.

Mechanical machines are the classic break room vending machines. They provide multiple products and cost about $2,000 initially. However, they do have higher profits than bulk machines.

Finally, the most sophisticated version is an electronic vending machine. These cost at least $3,000 per machine, often have touch screens and can take credit card payments easily. The more drinks and food offered, the higher the cost of the machine. They are incredibly reliable and intuitive, and the ability to use a credit card often means they receive a lot of business as fewer people carry cash and coins—just make sure you choose a payment gateway that doesn’t charge exorbitant fees.

Step 4: Find the Right Market

Your vending machine should be in an optimal place for the kinds of customers you want to serve. For example, vending machines with microwavable foods and other meal-like offerings do well in places where people are spending a lot of time and don’t have the ability to cook, like offices, hospitals and universities.

Snack vending machines are also great for offices. However, vending machines that dispense novelty trinkets or small candies can do well in specialty small businesses, if you are interested in making those connections.

Finally, vending machines that dispense medicine or electronics are great to place in airports, highway rest stops or train stations. These are necessities for travelers and these machines could therefore have a high profit margin.

Step 5: Stocking Products

For food vending machines, some states mandate a certain percentage of healthy options to be included. Be sure to have sources for healthy snacks if this is the case for your region.

When looking into food stocking in general, you should make connections with wholesale suppliers so you can get the lowest cost per unit. Saving money on the upfront costs of food will help you get more profit from your vending machines in the long run.

How To Purchase Vending Machines

If you want the most flexibility for starting your business, you should buy your own machine and source locations yourself. If you’re ready to get started and leverage contacts in buildings and commercial spaces for vending machines, this is the best way to get started.

It’s also possible to buy an existing fleet of vending machines. Before doing this, you should try to get as much information as possible about why the owner wants to sell their vending machine route. If it’s because they want to retire, that’s perfect. However, if there are issues with their chosen locations, you’ll want to know about those.

If you buy into a franchise, you’ll have an established business and fewer decisions to make at the start. However, the franchisor does take a cut from the franchisee.

Repairs and Maintenance

Since vending machines are in public spaces, they are subject to vandalism and occasional theft. You can work this into your business plan, even though it’s frustrating.

Even if you bought your vending machines new instead of used ones, they require regular spot checks just to be sure. Any downtime in your vending machine will be lost profit. Working a regular checkup of your machines in your schedule will also lead to better profits in general.

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