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Are Vending Machines a Dying Business?

There are rumors worldwide that vending business is done with flourishing. Here are facts and data to convince you otherwise.


Companies and individuals alike may wonder whether the vending machine business model is truly a dying business. It is a worthwhile question to ask if you are thinking of establishing your own vending machines somewhere. In addition to the traditional vending machines on the market, there are many modern vending machines that can help support a new start-up. Below, we’ll explore the advantages of a vending machine business, discuss the reasons some people walk away from it, and settle the dispute over the question “Are vending machines a dying business?” once and for all.

Advantages of a Vending Machine Business

A vending machine business can be a lucrative and low-maintenance endeavor for pretty much anyone. It has been a lucrative business for hundreds of years. The benefits of taking on this business as an individual or as a company are plentiful and significant. In addition to the opportunity to choose from a diverse selection of vending machines (coffee vending machines, dip vending machines, combo machines or snack vending machines that offer popular snacks. Also machines that offer ice vending machines, cake machines, hygiene products machines, etc.), you can look forward to breaking even quickly, exploring financing or renting options to lower initial costs, a respectable yearly income, and fairly low commitment requirements.

Break Even Quite Quickly

A typical vending machine will pay itself off in roughly 12-18months; you won’t find a turnaround like that in any other business. Plus, there are ways to get started with modern machines with minimal startup costs, such as finding a free or very cheap machine rather than buying a brand-new model out of pocket. Once the vending machine is paid off, the vending owner’s profits will skyrocket.

Many Ways to Finance at the Start

There is a lot of opportunity for entrepreneurs and vending machine businesses alike. Financing from friends and family is always an option, but there are many more professional ways to find funding for vending machine companies as well. This list includes grants, leasing or renting a vending machine, third-party financing, franchise membership, and more.

Generates a Respectable Yearly Income

A single vending machine can generate anywhere from $300 to $600 each month when placed in a prime location and stocked well. Here's the piece where we illustrate exactly how much each type of machine is likely to make and other important factors to consider. When you scale up to 2, 5, or even 20 vending machines, a vending business can easily replace a traditional full-time job. Plus, whenever a vending owner pays off one of their vending machines, they will receive an instant salary boost.

Low Commitment Required

While traditional vending machines are not a passive source of income, they really don’t require too much commitment when they are up and running. Checking on the vending machine once or twice a week, occasional simple maintenance, and refill stock is usually all that is required. Of course, if a vending machine owner has multiple vending machines in multiple locations, they may need to spend more time driving around to service each vending machine.

Why Do People Quit the Vending Machine Business?

a boy scout raising a white flag on the snow

Despite the numerous advantages that come with starting a vending machine business, there will still be people that decide it isn’t for them. There is a lot involved when you operate vending machines the right way. Some individuals either don’t want to deal with it on a long-term basis or actually set themselves up for failure with unrealistic expectations or a poor understanding of the vending machine industry. That's why many vending machine businesses failing are spreading the negativity mantra. Below, we’ll discuss some of the main reasons people quit the vending machine business.

Moving and Maintaining Vending Machines

Vending machines can weigh anywhere between 400 and 900 lbs when empty. As such, they are incredibly difficult to move around and often require a detail guide to help you move them around or team of professionals to get it done safely and efficiently. Vending machines need to be maintained on a regular basis, and sometimes this requires off-property work, such as resolving an issue with a little bit of welding.

The process of transporting a vending machine (for location changes or to service vending machines) can be time-consuming and expensive, and some vending owners simply do not want the hassle, the expense, or the inconvenience. This may be a contributing factor, or the entire reason, behind their decision to quit the business.

Luckily, vending machine owners can work with a professional team to help them manage the transport of their vending machines and ensure they don’t end up with any costly repairs from damaged vending machines.

Low Margins on Vending Machine Items

Stocking a vending machine is not as easy as it sounds. The vending owner must consider the cost of the items, the desires of the customers, refill costs, and the vending machine’s capabilities. Older vending machines will not be able to stock the same kind of items as newer vending machine models - especially custom made models - and they’ll have to think about cash vs payments with credit card readers as well.

The juggling act of balancing what the consumer wants to purchase and the ability to stock modern vending machines with those products may result in higher product prices and low margins. Ultimately, this can result in business closure.

Building good relationships with suppliers and charging reasonable markup rates for products is the best way for new vending machine owners to avoid this difficulty.

Challenges in Finding Locations

The vending machine location can make or break a vending machine business. A bad location can result in profits of only $50 per month, and this dramatically low profit margin is not sustainable. Plus, it can be incredibly discouraging for a vending machine owner to put their time into stocking the vending machine and trying to pay it off with minimal interest from the target customer base.

Some vending owners may not even be able to secure a vending location at all. In almost all circumstances, there is a property owner that needs to allow the vending machine onto the property, and with a poor business plan or unsatisfactory pitch, a vending owner may not even be able to get their vending machines functional and may end up walking away from the industry before they really got started.

Anyone interested in starting a vending business should carefully consider the vending needs of their area before buying a vending machine route or renting a vending location. There are even experts in the field that can do this work for you.

Bad Planning or Expect It Is a Passive Income

While vending machines are able to generate income quite independently, this is not a passive revenue stream. The vending owner will need to maintain vending machines (either performing the maintenance services themselves or contracting out for that work), collect the cash, make sure the vending machines have cashless payment systems, and restock vending machines on a regular basis.

If vending owners get into the business without proper planning for the location or preparedness for the work it requires to maintain a vending machine business, they may find themselves overwhelmed, struggling to make enough money through sales, and quitting the business altogether. Needless to say, for owners of smart vending machines that scale to multiple locations it's also super important to secure yourself by registering an LLC.

New business owners can avoid this by working out a business plan, preparing vending contracts in advance, building tried-and-true vending proposals, and perhaps even consulting a professional for advice before settling on a location or vending machines type. A solid understanding of the vending machine industry is also a good thing to acquire.

Are Vending Machines a Dying Business? Data Says NO

As is the case with most rumors, the idea that vending machines are a dying business is wholly inaccurate. Facts don’t lie, and industry statistics are describing the opposite phenomenon; the industry of operating vending machines is actually on the rise.

Self-service experiences, especially ones in retail, are becoming more in demand as the years go on. Smart vending machines are a huge component of the self-service market, and their value to the consumer (and the people who own them) is continuing to rise.

In 2020, Global Industry Analysts, Inc estimated that the vending machine industry will reach a market size of $31 billion by 2027. After the pandemic, this estimate was considered too conservative, and analysts revised the compound annual growth rate from 5.5% to 10.7% through 2030. Clearly, the vending industry will be booming for years to come.

How to Start a Vending Machine Business the Right Way

a vending machine dispensing products in a bus station

The key to finding success with a vending machine business is to start it the right way. This involves taking the time to create a consolidated business plan, spending time driving around to vet potential locations, and asking for help from industry experts when you need it.

Make an Effective, Consolidated Business Plan

The hallmark of a successful business is an effective business plan. Vending machine businesses are included in this group, even though they are small businesses and not very complex. The steps for creating a business plan for a vending machine business are the same for businesses in other industries. To create an effective business plan, you’ll need to:

·       Outline the purpose of your business

·       Conduct market analysis to identify the needs of your consumers and potential locations that would benefit from your vending machines

·       Describe the members of your target audience

·       Estimate your budget and expected revenue

·       Outline the risk factors that may affect the vending machine business

·       Describe the action plans that will assist you in executing your strategies effectively

·       Develop a timeline for your startup

Find Locations Yourself or Get Professional Assistance

An average vending machine does best in high-traffic areas. It makes sense; the more people who walk past vending machines, the more customers you can generate. Public spaces such as airports, train stations, malls, schools, and even outdoor spaces and parks are some of the most profitable locations for a vending machine business. However, more private spaces like break rooms in office buildings and lobbies in apartment complexes can also generate a decent amount of profit for vending machines in the long run.

During the location selection process, you’ll have to find a balance between high foot traffic and your availability for inventory management—after all, potential customers can’t become actual customers if your vending machines are empty of food and drinks. Smart vending machines and new-fangled vending technology make this task fairly less complicated in the vending world.

You’ll also have to consider the safety features of the vending machine location. Will the business owner allow you to install cameras? Is the location highly visible to deter thieves? Is the building locked at night to prevent access? Have you considered vending machine cages, replacing locks, or safety covers? These are all questions you should consider before settling on a vending machine location.

Choosing the right space for your vending business is imperative to finding success. Many new vending machine owners are not sure how to look for a site for their vending machines and may not have the expertise to secure the location.

If you fall into this category as a vending business owner, it is a great idea to seek professional help. Vending industry experts will be able to evaluate your needs, provide you with the list of all potential vending spots, find prime locations to make your vending business profitable, and assist with any other startup needs you may have.

Their services can include market research to identify holes in the local vending machine industry, suggestions of the best large or small businesses to pitch your vending machines to, and overall give you a competitive advantage by placing vending machines in the most optimal locations. You’ll receive higher profits with professional advice than you would starting out on your own, and it can take some of the leg work out of the job too.

Wrapping Up

All in all, the rumor that vending machines are a dying business is just that—a rumor. Given the numerous advantages of a vending machine business model, the available fixes for things chasing people out of the industry, and the availability of professional assistance for every aspect of vending machine ownership, there are many reasons to get into the vending industry right now. Plus, the industry is actually expanding in size, not declining.

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