When I first heard about the vending machine industry, I refused to believe that anyone could make money selling snacks and soda from a coin-operated “automated retail” machine. I didn’t even think of them as a business opportunity, other than a profitable one. I would soon learn that the vending industry generates $20 billion in revenue and makes over 13 billion snacks/beverages/purchases annually.
Once I heard those numbers, I wanted to know how I could get involved.
The question is “How can you start your own vending machine business from home?” Although it can be overwhelming at times, with the right advice and some guidance, you’ll be on your way in no time.
The first step in starting a vending machine business is to determine if it is the right business for you. This isn’t one of those “become a freelancer from home” jobs that you can start in minutes and if it doesn’t work out, so be it. Starting a vending machine business takes time and dedication, but when done right, allows you to be your own boss and reap the rewards of your hard work.
Deciding if a vending business is for you comes down to whether it aligns with your “3 Whys.” These are the reasons purpose, time, And money
- Purpose – The first question is, what is your purpose for entering the vending business? Do you want more control over your financial future? Spend more time with your kids and family? Maybe you just want to be able to schedule your own? Whatever it is, it’s important to decide what your objective is before you start because it will help keep you focused down the road.
- Time – The next question is how much time do you need to start your business? This is important because it will affect the strategy of how you delegate your tasks to run the business.
- Money – The last question is what is your money factor? This answer will usually depend on a few other factors. Generally, the more support you get from a business opportunity, the more expensive it will be. However, in many situations that investment may be the best option for you. It all depends on your why, and your level of time-investment.
Once you figure out the “whys” and decide that this is the right business for you, then you can take the next steps to launch your business.
Step 1: Find the location for your vending machine
The key to making sure you can operate your business from home is to find out the location of your vending machines before you buy them. This is very important for two reasons. One, you don’t have to store a bunch of vending machines in your garage. Plus, business owners often miss out on big potential profits by doing so. The problem is that each location has a “best possible” machine to fill the space. Let me explain with an example.
Let’s say you buy a cash-only vending machine (if you follow our guidelines, you won’t because we explain that credit capacity is a necessity in today’s world) because it was on sale. You are then offered a great location by an office building that is predominantly occupied by middle-aged working adults. This population prefers using credit cards. Rarely do they carry cash on them. You are going to miss out on a huge potential customer opportunity because you buy your machine before you know where it will be installed.
So to make sure you have room to move into your home and maximize your profits, Don’t buy your machines before you have a safe location for them.
We’ve talked a lot about your vending machine location. It’s for good reason. It is often said that the vending machine business is actually a location generation business. This is because finding a location for your vending machine is absolutely critical to your success. The reason is, you can have the most beautiful vending machine in the world, but if you don’t have a crowded place to put it, there is no way to make any money from it. So how do you find these locations and convince building owners to put your machines there? You do it generated, qualificationAnd off.
The first step to finding great locations to place your machine is generating leads. It is an ongoing process that is the main determinant of your success in the vending machine industry. This is something you can do at home! Proper lead generation is a combination of prospecting, researching for leads, and marketing so that leads can find you. Done right, you’ll soon have a large list of leads ready to qualify. Qualifying the best leads is important because your time is of the essence. That’s why it’s called work from home, right? Only meet with the highest quality leads to ensure you’re not wasting your time. Once you’re in the meeting, it’s time to close the deal! Our complete guide Goes deeper into how to close the deal and decide which startup option is right for you.
Step 2: Determine your start-up costs
When starting a vending business, your start-up costs will primarily come from two main sources: buying machines and stocking them.
Prepackaged snack and soda vending machines can cost anywhere from $1,200 to $5,000 (depending largely on the mechanics; if it only takes cash or offers a credit card reader and the types of products the machine offers.)
Vending machines can be like small convenience stores. The items you offer are important. And you don’t necessarily limit food and drink. There are many different types of machines out there, including beauty products, hygiene items, bulk machines (think gumballs), and even PPE items. These are examples of special sales. For the sake of this post, if you’re only considering candy, food, and drinks, consider the cost of buying enough of each of these items to fill all of your machines. This can be a very expensive trip to big box chain stores or large shipments from your suppliers.
Vending machines can be purchased in several ways. You can purchase them outright with your own investment or through a short-term loan, you can lease them through a vending machine company, or you can buy used equipment. Your startup costs will vary depending on the path you take. Determine your profit margin from each route and consider your financing to find the best option.
We also don’t forget that there are business start up costs depending on the type of business entity you are starting + the state/county/city/territory you live in. If you start as a limited liability company, you may have a fee. (LLC,) may require a business license from your state or local government, or you may also have a specific vending machine license. You can find out more by visiting your specific state’s Secretary of State, your state licensing regulation department, or checking with your county/city.
And don’t forget – create a name for your business! You want to be recognizable and unique. This will be an important consideration when filing for your assumed name certificate, LLC, etc.
3. Make a plan and get an account
Entrepreneurs plan for best and worst case scenarios when starting their small business. Writing a business plan will help you gather your thoughts, define your goals, and create a path to success. Your plan should include financial projections, even if no one but you can see the plan. Determine your projected inventory and costs, estimate your profit based on when you will collect and restock, and set your bottom line for success.
Another consideration you’ll want to make in making your plan is repair work. Who fixes the machine when it breaks? Do you need to hire an outside repair service or do you repair the equipment yourself? If you are leasing equipment, what are the charges for repair calls?
Once you establish your business entity, you will need a business bank account. And, if you want to apply for a loan, that business plan will be very important to your application process.
Do you have many machines? Do you need to hire employees?
4. Decide where you will park your machines.
location location location
You want visibility, but you want to consider your target market and what they are Would like to buy from you. You don’t want to have a bulk vending machine selling gumballs in the dentist’s office. Or if you’re setting up a machine near a gym or spa, you might want to consider healthier options.
Apartment complexes, hotels, medical clinics, airports, malls, grocery stores or markets, public transportation hubs, shopping centers and religious centers… where people gather or high-traffic locations are great places to consider. Just remember that you may need a contract before dropping off your machine.
And don’t forget to include a description of where you will place your machines in your business plan.
The location of your machine will also help you determine permits and licenses for your business.
As you can see the vending machine business is not for those looking for a couple of easy dollars. However, this is a great opportunity to take control of your financial future and become your own boss, all from the comfort of your home. Grab a bag of chips and a drink and get to work building your vending machine business venture.
More ways to start a home business
August Quinn Noble is a Marketing Coordinator at SnackNation and Humane whose mission is to make healthy eating more convenient than junk food. He loves too Making offices more awesome. Feel free to contact him at AugustN[@]HealthyVending.com.