Anyone here in the vending business?

Thinking about picking up some vending machines, a few bulk machines to start, then soda and snack machines after I get my head around how things work.  

I'm not expecting to retire early, just figure if I can drop a few hundred a month into savings and having the scheduling freedom this offers could be a good thing.

Anyone here want to offer advice?

In for the info as well. 

Had a buddy that bought vending breathalyzers and put them in bars a few years ago. Lasted about 2 years, ultimately he said it wasn't worth the hassle. Drunks kept vandalizing them, bars would go out of business, he expanded significantly and ended up with a pretty spawling radius. Was taking him 3 full days to empty them all and his "side hustle" was turning into a full time job.

With Mac Dons paying $15/hr, making a few hundred a month isnt too hard.  And requires no cash outlay, inventory, maintenance, etc etc etc.

I was actually thinking the other day how pretty much every vending machine that used to be around is gone.  I think a lot of it has to do with no one carrying cash, and especially no one carrying change.  I can't imagine a few coke machines would be too lucrative.  

In reply to 93gsxturbo :

Mac Dons can't be done on my lunch hour and isn't worth the hassle. 
Personally I still see machines around, most have card readers. The bulk machines do seem iffy due to people not carry coins as much anymore. 

In reply to 93gsxturbo :

Our local school system makes $800k off the vending machines in the schools. The school board was going to do away with them until they found out how much of a cash cow they are.

While no one carries cash, I haven't seen a vending machine that didn't take cards in years. 

And I would eat a bullet or starve before I worked at McD's. Digging ditches would be better work.

I was sitting at urgent care the other day(32nd trip of the year) when I noticed they got vending machines.  I immediately thought to myself, "I should have been the guy to put them here." 

I've seen too many youtube finance side hustle videos now. I know my main business and just need to focus on that. 

Most places have a relationship with the existing vendors, so it can be tough. If I was going to do it, I'd focus on coffee vending machines at car dealers.  Solve the headache of someone there maintaining the coffee station.

I looked into it back in college. My take away was that it is a fairly saturated market. The money is there, if you can get the real estate... 

I came away with the conclusion that it wasn't worth it to start it up from scratch unless you happened to own a few businesses where you could immediately place them, or else could buy out an existing business. 

I agree with 93gsxturbo - it doesn't have to be McDonalds or any fast food, but I believe there are easier ways of getting an extra few hundred dollarydoos in the account every month. Officiating sports, walking dogs, garage sale/estate sale arbitrage... Heck, go to the local quicklube and ask if they could use you for a Saturday morning shift.

I've got fourteen of these on piers along the Southern California coast.

They're all coin operated (twenty five cents per view) and COVID has pulled my revenue down about 40%

I used to net about $500 per machine per year, now it's around $150 due also to soaring inflation driving up my operational costs.

My brother was related to the Fastenal business vending machines and he said the machines are killer cost to purchase and set up.  I would think a few pop machines would add up quickly.  

Just looked at machines at airports this week and was impressed with the salad vending machine.   

mtn said:

I agree with 93gsxturbo - it doesn't have to be McDonalds or any fast food, but I believe there are easier ways of getting an extra few hundred dollarydoos in the account every month. Officiating sports, walking dogs, garage sale/estate sale arbitrage... Heck, go to the local quicklube and ask if they could use you for a Saturday morning shift.

Those are all on someone else's schedule. That's the attraction here. It's largely hands-off. 

Friend of mine made vending machines his business for a few years.  Apparently vandalism was so bad he gave up on them pretty quick.  And servicing them became neverending, if he wanted to take a vacation (even just a weekend away) he had to get someone to cover his territory because empty machines attracted 10x the level of vandalism.  

Apparently the money can be pretty good, but make sure the machines are located in high visibility and secure areas.

My father ran a full service vending business (Urban Services Automatic), and my uncle did as well (Anchorage Amusement and Vending).  I worked for both of them at different times when I was younger.

There really isn't a lot of "free time" running a vending business.  To get a decent account, you usually need to be able to give them snacks, soda, and at least office coffee services. 

A decent account usually will have to be serviced at least twice a week.  Some will need every day.   Repairs will have to be dome by you, and you will be expected to repair the machine in a very timely matter, or the client will get someone else.  Machines cost thousands of dollars each, and become more complex every year.    Much of the time, a client will want you to pay them a percentage of your take from the machine.  Sometimes, they won't.   Very rarely, the client will subsidize the machines to keep the prices lower for their employees.

Most urban areas will require licensing of both the machines and your business.  In both of the instances I mentioned above, this required an actual brick and mortar location with running water and a wash sink.   (Chicagoland, and Anchorage, AK)

All of our locations were at established businesses and/or offices.  Having an actual indoor business location with the same clientele and interaction with that clientele everyday keeps the vandalism, damage and theft to a minimum.  But damage and theft will still happen.    People will assume you are making money hand over fist, but run the numbers on what you can get your items for vs what you can sell for, and that just isn't the case.    Tell that to your clients, and they will think you are lying.   But a supermarket or wholesale club can sell for cheaper than you will be able to buy at, due to to the fact that you aren't able to buy boxcars of product at a time.   

Which leads to the next issue.   Expired/damaged product.    It happens.  The second you can control, the first, not as much.   You will eventually learn your clientele and what they like.  But someone who loves NuttyBuddy goes on leave, and you are going to be bringing a lot of that home if you aren't on the ball and have a different location to slot it into.  When that person comes back, you know you are going to hear about it not being there for them.



Now, this sounds like I am putting this idea down.   I'm not.   My dad did very well running his own business (he was able to support hs family, and lived comfortably), and my uncle did even better (He died a millionaire).   But they both worked in the business for years before starting (my dad), or buying (my uncle) their own companies.   I just like to point out that, like everything else, it ain't as easy as it looks.

Toyman! said:

In reply to 93gsxturbo :

Our local school system makes $800k off the vending machines in the schools. The school board was going to do away with them until they found out how much of a cash cow they are.

While no one carries cash, I haven't seen a vending machine that didn't take cards in years. 

And I would eat a bullet or starve before I worked at McD's. Digging ditches would be better work.

 

Thats a bad example - its a closed ecosystem.  Students and staff typically dont leave for lunch.  In many cases, the students can't leave for lunch, and the teachers do not get a long enough break to be able to run anywhere but the closest place and hope the line is short.  You also are dealing with a large population that is reasonably flush with petty cash and still growing so the demand for that sort of stuff is high.  

The Mac Dons reference was rhetorical.  Basically there are a lot easier ways to make a few hundred a month with zero outlay - really any part time job, be it fast food, ditch digging, or Autozone.

I urge anyone considering this to really look around and think to back in the day.  Mom and Pop stores almost all had vending machines.  The small grocers, hardware stores, etc, all had them.  Today, they are all gone.  The Walmart in my town had a pepsi machine, a coke machine, and a Sams Choice machine that ran on 2 dimes.  The grocery store had a coke machine and a Surge machine that just had bottles of Surge for $0.50.  That was awesome.  But not no more.  Only place I see vending machines is at airports, and I still will go to the counter vs the vending machine since its easier to get a receipt from the counter.  

I would think this business would be even harder in a post COVID WFH world. When I visit our offices, with just a handful of employees there where there were formally hundreds, I also notice the lonely vending machines in the corner are still there.  I actually figured they would have been picked up and put in a better revenue generating locations, but maybe there are so many empty offices with vending machines in former break room, they don't even bother to come get them. Better to store them in someone's empty office than pay for storage?

In reply to 93gsxturbo :

Hospitals, medical centers, hotels, and factories all have machines.

I would bet MUSC has 30+ spread throughout the campus. 

Boeing has a couple in every break room in every building as does Bosch. 

Most hotels have machines on every floor. 

I also still see candy machines everywhere.

The trick would be getting your foot in the door. 

It can be done but you can't get stuck in someone's rut. You have to think outside the box and make your own ruts. 

Who says vending machines can only sell drinks, candy bars and condoms?

I work in manufacturing and can confirm that most places of decent size all have vending areas. 

That being said these are not vending areas run by a Chuck in a Truck or a Jose in a Hyundai, these are all heavily organized, supported, full time gigs. They are much closer to the self-serve kiosks you see in an airport than the dusty old snack machine with expired peanuts.  Most of them come along with the vending company doing consumables and PPE, since if you are already on break getting a new grinding wheel, its easy to have a soda put on your tab as well.  

So yeah they are still out there, but the mom and pop ones are gone.  The focus of this was can a mom and pop do it to make a few bones in their free time, and that answer is a resounding "No"

Another area that's full time is the food trucks.  The one by my work shows up with an Apple credit card swiper and a ton of cooked Mexican food. They bring you a mini Mexican buffet line.  

For $14 you can load up one steaming plate of food.  The downside is heavy preparation and most of these factories are covered already.  Most guys at food trucks load up big time at first break.   I imagine the day ends early.  This is not a part time gig either.

In reply to 93gsxturbo:

If you approach it with a can't attitude, you are right, you can't. 

And I hate to break it to you, my brief research says you are wrong. 

30 minutes of research shows there are at least ten vending machine suppliers in my city. They supply everything from ice machines to ATM machines to feminine products. They range in size from large outfits to the Vending Lady that does the feminine products machines. She operates out of an apartment. 

It is an incorrect assumption that the nation’s roughly 5m vending machines – bringing in $7.4bn in annual revenue, according to the industry market research firm IBISWorld – are mostly corporate affairs. In fact, more than 67% of the market is made up of small independent operators, who mostly sell snacks and sweets on slim margins. Link

That leads me to believe there is more money in it than you can imagine. It is also apparently scalable from a full-time enterprise to a couple of hours a week.   

Someone is supplying all the machines I see so someone is making money at it. While I'm sure the hospital and factory contracts go out to bid and are managed through a pretty big outfit, I'm also sure a huge company isn't supplying the gumball machines at the local diner or the ice machine at the local hardware store.

I'll swing by the diner and ask who supplies the vending machine in the next few days. I'll happily pass that info off to someone else that wants to talk to someone in the business as long as someone will return the favor. That way we can get answers from someone we won't be competing with. 

In reply to Datsun310Guy :

The guy that owns the detail and tint shop next door to me just bought a seafood food trailer. In talking to him, he's making pretty decent money off of it. I don't think I want to work that hard though. 

I don't know these specifically, but I suspect it's one of those things that doesn't provide much $$/Time until you have a sufficiently large network.

You're not just looking at the time it takes to collect change and fill up a machine.

You're looking at the time it takes to plan your route for the day/week, order supplies, drive to each location, deposit cash and get more change, do accounting, handle maintenance, etc. All those things add minimal time per additional machine.

You want a large network of machines you're servicing, or you want to just service machines in a building you're already in for work anyway so you can eliminate your travel time and roll the accounting in with other accounting.

In reply to Beer Baron :

That may well be the case. From my reading, the average gumball machine generates about $1/day. To make a living, you need to service a bunch of machines. Making $200 a month is going to take 6-10 machines in good locations. Figure you need to service them twice a month. That should be doable. The sucky part is going to be knocking on all of the doors trying to get good locations. That's going to be work.

Gumball machines are surprisingly cheap at $215 for a double head. The ROI should be less than 4 months. Tabletop units are under $100.

Edit to add: I can pick up a modern soda machine that takes cash and cards for about $1500. Drink machines average about $140 a month. The ROI is a little longer but still not terrible. They are going to be harder to place though. 

In reply to Toyman! :

Just be sure you value and account for your time. Don't forget operating costs for any vehicles needed to service.

In reply to Beer Baron :

I'm not going to work hard enough to service a bunch of gumball machines. I may pick up a soda machine to put at my office. The apartment complex next door should buy some sodas and the machine will be under 24hr surveillance to keep the vandals to a minimum. Power is already covered, as is the internet for the card reader, and filling it will be as hard as walking outside. Should be pretty easy money.

I'm also looking into a Twice the Ice machine. The driveway to our farm is across the street from the turn to a local boat ramp and sees a lot of boat traffic as well as being on the main road headed to a local beach. There is already power and water onsite and the dirt is paid for. That would also be pretty easy money though the investment is a good bit higher. I'll have to do some more research on that.