In today’s economy, there are very few people who are not seeking out options for extra income. A vending machine side hustle is one of the most underrated yet profitable options. Whether exploring small business ideas or just looking to make some vacation money, vending machines might be your ticket to financial flexibility.
Introduction to Vending Machine Side Hustles
It’s hard to go out in today’s world and not notice a vending machine filled with anything from snacks to beverages to novelty items. Found everywhere from shopping malls to athletic facilities to schools, vending machines are one of the most underrated small business ideas for entrepreneurs.
What makes vending machine entrepreneurship so enticing is its relative simplicity. Unlike many other side gigs that demand your time, such as rideshare driving, freelance work, or complex online businesses, starting a vending machine business is pretty straightforward, making it one of the best automating income streams.
Steps to Start Your Vending Machine Business
Although owning and operating a vending machine may seem relatively simple, there are a number of steps that you need to take before starting a vending machine business in order to be successful.
Market Research - Before investing, assess your local market. Check out potential locations and take note of the existing vending machines, if any. What kind of products do they sell? How much foot traffic is in the area? How often do the machines get used?
You will also want to source out the best vending machine providers and stocking options.
Location - Securing the right location is often the most challenging part of the business and determines your success or lack of it. Look for a place with little to no competition and high foot traffic. While some property owners will charge rent or lease for the space, most will exchange the space for a profit percentage (usually between 10-25%). The best locations typically include office buildings, hospitals, schools, and sports facilities.
Choosing the Right Type of Machine - Traditional snack or beverage machines are reliable but common. Depending on your location, consider alternative niche options such as healthy foods, hot beverages, or specialized products such as electronics or personal care items. The key is matching your machine to the location and demographics.
A new vending machine can range between $3000-$5000, depending on its features, whereas used or refurbished machines can go for as little as $1000. While a lower price may be more attractive, making sure that it is in good working order and that it provides what the customer needs is important.
Legal Requirements - As with most businesses, there may be legal documents that need to be obtained before starting up, such as licenses, permits, and insurance.
Stock and Launch - Once installed, track sales closely and adjust inventory and pricing to demand.
Understanding Initial Costs and Investments
Starting a vending machine business can vary depending on the factors mentioned above. While it may not be cheap, it is significantly more affordable than a retail store or franchise.
With the approximate startup costs ranging between $2000 - $7000, many experts recommend new owners start with one or two machines in order to understand the business before scaling up. Some suppliers offer lease-to-own options or discounted upfront costs in exchange for higher commission splits.
How Much Can You Earn with Vending Machines?
Vending machine profits depend greatly on three things: location, product selection, and foot traffic. When done correctly, the potential passive income with vending machines may generate between $500-$1000 monthly, while poorly maintained machines in low-traffic areas produce $150-$300. After taking into consideration product costs, location fees, and expenses, net profits on average range between $200-$700 per machine per month.
Tips for Maximizing Your Vending Machine Revenue
Making the most of your vending machine side hustle comes down to how attentive you are to what consumers want and need, and providing it for them.
Product Optimization - Smart product selection will, in turn, help make your vending machine popular and profitable. Use sales data to stock your machine accordingly. Rotate or remove slow-moving products, while doubling up on best sellers.
Modern Technology - Use modern technology to your advantage. Cashless payment machines typically bring in significantly higher sales than cash-only machines. Machines that come equipped with remote monitoring systems will help reduce unnecessary trips and downtime when it comes to restocking or troubleshooting issues.
Draw an Audience - Maintaining a clean, well-lit, and fully stocked machine compared to a neglected, run down and empty machine draws in repeat customers. Although it may cost more up front, seasonal decorations or promotional signage can help draw attention, therefore encouraging consumers to purchase products.
Price Testing - Most locations can support a slight price increase without negatively impacting sales numbers. However, it is important to take note of competitor pricing in your area with other machines or convenience stores in order to ensure you remain competitive while maximizing revenue.
Case Studies of Successful Vending Machine Entrepreneurs
Marcus Gram, a 34-year-old entrepreneur, brings in nearly $500,000 in sales from twenty-one machines in Baltimore, Philadelphia, Detroit, and Washington, D.C.. In 2022, Gram recommended having at least $5,000 in order to get started, and says if you only have room and the budget for one machine, consider a combo unit that offers both snacks and drinks.
Adrian Pena was motivated by a TikTok video to start his business. Starting with just $1500, Pena put his first vending machine in a gym, but soon relocated it to a shopping mall, where foot traffic was significantly higher, resulting in a massive revenue increase. Pena then reinvested his earnings and expanded his business to include multiple machines.
iKrave Vending owner Lakinya Francis turned a $2000 investment into a $360,000 per year operation. Understanding strategic placement and her target demographic, Francis turned calculated risks and persistence into one of many entrepreneurial success stories.
Common Challenges and How to Overcome Them
As with any business, vending machines present several challenges; however, perseverance and preparedness will help you navigate these issues with minimal stress and inconvenience.
Vandalism / Theft - One of the biggest challenges in vending machine operations, vandalism and theft can be curtailed by installing your machine in a well-lit, heavily populated area. Installing a security camera and purchasing insurance can also help with these issues.
Machine Malfunctions - A broken machine can annoy both customers and owners. Purchasing a quality machine will help eliminate any major issues, as will regularly scheduled maintenance checks. Learning how to troubleshoot minor issues yourself will limit any downtime.
Low Sales - If your machine is not bringing in a significant amount of business, it may be time to either bring in different products or move to another location.
Financial Management - As you attempt to grow your vending machine side hustle, inventory for multiple machines or irregular sales can impact your budget. Consider using inventory management software as well as building relationships with suppliers to optimize purchasing and reduce costs.
