Buzz
When you think of vending machines, you likely picture them as a last resort for snacks while stuck in an office or airport. You probably don’t view them as a modern, profitable business opportunity–but perhaps you should. Did you know that many of these snack-filled machines are independently operated? Instead of being leased by large corporations like Coca-Cola, they can be managed for a profit by individuals like you and me (unless, of course, you happen to be the CEO of PepsiCo).
Earlier this year, NerdWallet explored the costs and benefits of managing vending machines as a small business, providing a detailed guide to help you assess if this investment is worth it (beyond simply fulfilling your childhood dream of running a candy shop). Here are the key factors to consider if you're thinking of becoming the vending machine mogul in your community.
Vending machine appeal: Are they truly profitable?
The pandemic sparked a surge in interest for individuals owning and managing their own vending machines, particularly among Gen Z-ers who watch their peers flaunt their supposed earnings on TikTok and YouTube. Last year, Vox reported that 20-year-old YouTuber Jamie Ibanez claimed to have made six figures from vending machines; however, it turns out that most of his income actually comes from his YouTube channel. Despite this, Ibanez told Vox that he purchased his first vending machine after seeing a YouTube video of someone pulling loads of cash from their machines. Quite the inspiration!
Let me be the first to point out that TikTok and YouTube aren't exactly representations of real life. So how profitable is this business really? Well, according to Vending Market Watch, it's pretty lucrative. Their most recent 'state of the industry' report called 2019 a 'record-breaking' year for sales among convenience service operators. While no fresh reports have been released since the pandemic, the general consensus online suggests that a return to in-person work and travel could be promising for the vending machine industry.
However, with factors like location, the number of machines, and the types of products sold, it's tough to pinpoint an exact figure for how much income you could make from owning a vending machine. NerdWallet mentions that the average vending machine brings in around $35 a week, but those that are well-stocked and placed in safe, high-traffic spots can earn nearly three times that—over $400 a month.
Low initial investment
Choice of inventory
You're not just limited to snacks and sodas, especially if you're aiming to cater to a specific market. According to NerdWallet, it’s a smart idea for newcomers to specialize in something—whether it's healthy snacks, drinks, or even fresh food—until you get a feel for the industry. Beyond the basics, here are a few unique ideas that might work for your vending business:
Protein bars
Juices
Hot drinks via a specialized machine
Non-food items like tobacco (if permitted in your state), phone chargers, or laundry essentials
Location, location, location
Your inventory selection should be based on what's popular in your area. Think of places where you've personally used a vending machine. Good spots typically include schools, hospitals, train stations, laundromats, or other locations where you might be pressed for time or without food options.
Once you've found the ideal location, you can't just place your machine there without permission. You'll need to contact property owners or managers. Before reaching out, ensure you're prepared by gathering information on how your state licenses and regulates vending businesses. You can do this by contacting your local Chamber of Commerce or researching your state’s small business laws online.
Essential factors to consider
Beyond initial investment, it's important to consider how sustainable running a vending machine business will be for you personally.
You must have a license and a tax ID to operate legally (though this seems to be relatively easy to obtain).
You’ll need to place your machine in a prime location with consistent foot traffic to make a profit.
A certain level of physical fitness is necessary, as maintaining your machines involves a fair amount of walking and transporting products.
With adequate research and thoughtful decisions, the vending machine business is open to almost anyone. If you're ready to dive into vending machine ownership, definitely check out NerdWallet’s detailed guide. And, just a personal request: Please, stock salt and vinegar chips.
