Have you ever been super thirsty and unable to find a drink? Starting a vending machine business can be a great way to make passive income with low startup costs. Are you ready to learn how to start a vending machine business?
Adam Hill told us:
He bought his first vending machine operator for $120K in 2014 and Hill Vending was born.
Hill Vending lost its biggest client shortly after the change in leadership because the location wanted to start running its own vending machines. That didn’t stop Adam!
He rose above the discouragement to grow the business into a $600K passive income-generating machine. He’s even started his own vending training course. We’re going to share the secrets of his success.
Let’s dig into the vending machine industry first!
Step 1. Is The Vending Machine Business Profitable?
Adam told us:
Check out our interview with him below:
ATTENTION: Watch Adam Hill unravel his decade-long experience & help you launch a 6-figure vending business today in his free masterclass.
Vending machine business owners have the ability to make a ton of money if they can land their vending machines in the right places, but you need to understand the market to play the game right. We’ll give you some background information.
Who are the major players in the vending machine market?
IBIS World, the United States vending machine industry, is highly fragmented, with over 18,200 businesses sharing $9 billion in revenue. According to the same report, the largest vending machine operators in the vending machine market are:
- Compass Group PLC: They had $14.4 billion in revenue in 2021 and a 5% net profit. They are the owner of Canteen and Canteen One, with more than 200 health vending locations throughout the US.
- Aramark Corporation: The US revenue for Aramark is $6.8 billion (page 34), with an operating income of $131.8 million (page S-53) in their annual reports.
- Wittern Group: They are solely focused on vending. They are privately owned, so their income is private information, but Dun & Bradstreet (a 200-year-old analytics and risk management company) estimates Wittern Group had $71.2 million in sales in 2021.
- Swyft (formerly ZoomSystems): Swyft is turning the retail industry on its head with vending machines for everything. Want to buy a computer from a vending machine? No problem! They also create lockers for packages.
These major players are also where to buy a vending machine.
Trends in the vending industry
The vending machine offerings are becoming more sophisticated. Vending machine businesses accept more than quarters today. Vending machine owners still accept quarters, but vending machines also accept cards, ApplePay, and Google Pay
In addition, the average vending machine has seen other advancements, including:
- Automated shops
- More than just food and drinks
- Eco-friendly solutions
- Field management software
- Personalized products in vending machines
Later in the interview, he told us:
How much does a vending machine make?
Adam told us:
Profits vary dramatically based on what you stock and how you purchase machines and inventory. At first, you’ll probably have slimmer margins because you might not qualify to work with major distributors, but as you grow, so can your margins.
If you figure a 24-pack of Coke bottles is $13 from Sam’s Club, and you can sell each one for $1.50 to $3.50, that’s over a 64% gross margin. That’s pretty good for checking your machines, collecting the money, and restocking.
Adam broke down the costs for us:
• Products: 50%
• Taxes: 20%
• Wages and profits: 30%
We talked to another vending business owner, Ben Smith of Friendship Vending Co., who told us:
Check out our interview with him below:
The more vending machines you own, the better you’ll do in the vending machine business. As you add more machines, margins will increase because your route will become more efficient, and you’ll qualify for bulk discounts.
Vending machine company profits per product
eVending specifically states that their machines can be paid for by selling 7 to 10 products at a profit of $.50 per product. That is probably a good target for the minimum acceptable profit margin.
How much does it cost to start a vending machine business?
One of the biggest considerations when considering how to get into the vending machine business is the cost. You can start by buying a vending machine for as little as $500, or you can buy routes that normally start around $5,000 per machine.
If you have a vehicle and a bit of extra money and are comfortable approaching business owners, go for it! It could change your life.
Sounds like a great industry, doesn’t it?
There’s more! You can find a vending machine for anything.
Step 2. How Much Does a Vending Machine Cost?
I wasn’t kidding when I said there’s a vending machine for anything you can imagine. Besides the standard food vending machines, you can start a vending machine business selling books, electronics, clothes––anything your mind can conjure.
Let’s look at some of the most common types of vending machine businesses and what the vending machines cost.
How much is a vending machine for food?
Food vending machines can come in a variety of styles. You can have the old-school machines that hold the food with longer shelf lives. These are great for candy, chips, and cookies.
Vending machines are commonly found for less than $1,000 used or $3,000+ for a new one (but financing is available for new ones.) We’ll discuss whether you should buy new or used later, but let’s look at some of the vending machines available on the market.
Snack Food Vending Machines
You can sell snack food that doesn’t need to be refrigerated out of vending machines, which is the most common style. Consider these features as you research:
- The number of snacks it can hold. Expect to spend an extra $25 to $100 for each additional snack dispensing section.
- The type of payments it can take. Expect to spend $300 more on card readers.
- Whether it’s refrigerated. Expect to spend an extra $400+ for a chilled vending machine.
- The technology inside it. Expect a learning curve as you get started.
Just to give you an idea of how we came to these numbers, check out the comparison of new snack vending machines from A&M Vending Sales.
What about gumball machines?
Kids love gumballs and candy machines. I know my kid used to ask for quarters for one every time we went into a store. Fortunately, you can buy these vending machines for cheap.
They sell them on Amazon for anywhere from about $50 to $1,000. Check out some of the most popular ones:
I loved the spiral gumball machines when I was a kid. I’d suggest looking on other sites before going with the Amazon spiral one.
Often called bulk machines, these can also be used for trail mix or nuts.
How much are vending machines for healthy food?
An organic or vegan vending machine business should expect to spend on the higher end. The food will be more costly, and the machines will be refrigerated. The vending machine cost online is between $5,000 and $10,000 for this type of machine.
Healthy items will normally need refrigerated machines, and you’ll normally have higher costs and prices for inventory.
How can I buy an ice vending machine?
We’ve all seen ice vending machines. They sell big bags of ice. Some also sell water. You can check out the following sites to find ice vending machines for sale:
They don’t disclose their prices online, but other sources say these machines can cost between $20,000 and $150,000. If you can find them used, have a licensed refrigeration tech check it before making your purchase.
Search “ice vending machine business for sale” to find used ice machines.
How much is a pop machine?
You can find used pop machines for under $1,000 and new ones for $3,000 to $7,000.
How much is a hot beverage vending machine?
If you’re brewing hot drinks like coffee, espresso, cappuccino, and hot chocolate, expect to spend $5,000 to $8,000 per new machine. They can also heat soup.
Can I sell electronics out of vending machines?
Selling computers, phones, and other electronics is an option in some of the higher-end machines. They can make a great profit but probably won’t be as high-frequency purchases. You might find some success convincing electronic stores to rent the machines to make it easier to sell some of the products quickly.
Have you considered a book vending machine?
A vending machine for kids’ books and other books makes a lot of sense in places like airports and pediatric hospitals. Learn about other types of vending machines.
Step 3. Write a Vending Machine Business Plan
Adam teaches a concept he calls the 4 Keys of Vending Machines. It is effectively a business plan that includes:
He explained it like this:
Let’s dig into the 4 Keys of Vending Machines and how they can drive your new vending machine business to profitability.
Key 1. Location: Where To Put A Vending Machine
The first key to starting and running a vending machine business is choosing locations. Adam told us:
In either scenario, you’ll want to consider traffic at the location. Adam told us:
Adam also warned us:
He also gave us some advice about whether to go door-to-door or find an existing route. We’ll discuss each next.
Adam explained that trying to find new locations to put vending machines can be difficult. Chances are that existing locations already have a service contract. He also explained that most people make the mistake of talking to the general manager.
He went on to explain:
Buying an Existing Vending Machine Route
Buying an existing route can be highly profitable, but you also need to be careful. You don’t have to worry about finding the route and can focus on the other three keys. On the other hand, you risk paying too much. When asked whether he would have bought his first route again, Adam told us:
He went on to explain that the route is also the reason he succeeded.
Key 2. How to Get a Vending Machine
The second key to starting a vending machine business is choosing the right machines. Adam told us:
He also explained the features you’ll need in machines:
• Credit Card
• Apple Pay
• Tap Pay
• I-Vend (guarantees the product comes out)
While there are a ton of YouTube gurus who suggest buying a used vending machine, Adam told us:
Key 3. Customer Service
Adam told us the third aspect of running a vending machine business is customer service. You need to have a plan for how you will handle it. He explained:
You also need to make a commitment about how soon you’ll be there when they need service. Put it in your contracts and make sure to provide them with a little cash and a log in case they need to provide refunds. People shouldn’t need refunds often if you are using I-Vend, so the amount can be small.
He also explained that there are benefits to staying small:
We asked Adam what he’d do if Aliens took over the world. He told us:
We come to you from the planet Nimrod to tell you that invaders are coming to eat all your food. The only chance for survival is to start a vending machine business through UpFlip’s Online Training Course. We have partnered with them to ensure your safety.
Talk about customer service! He recognizes that aliens need food, too.
Key 4. Pricing
The final key to success in the vending machine industry is pricing. Adam primarily sells food but also owns a cigarette vending machine. He explained:
He explained that it’s essential to follow the 50-30-20 rule to make a good living. As a reminder:
He went on to explain:
All the drinks are made by the same people, so there’s not much room for variation.
If you’re more comfortable tackling a standard business plan for your vending business, check out the information below.
Use a Standard Business Plan
Write a business plan for your vending machine business to help you stay focused and manage your vending machines and inventory. Your business plan should include:
- The name of your vending machine business
- Measurable goals such as:
- What kind of machines your vending business will purchase
- Whether you’ll buy new or used vending machines
- What types of business or property owners you’ll want to approach
- How you plan to purchase the machines
- How you’ll reach your target marketing plan
- Your financial projections
- What funding is needed
You can learn more about these subjects on UpFlip Learn. I suggest watching our interview with Mike about how to write a business plan to get started. Check it out below:
A business plan is often the difference between a successful vending machine business and an unsuccessful one. In fact, if you want to get financing to start a vending machine business, you’ll have to have a business plan.
Step 4. Form Your Vending Machine Business
If you want your own vending machine business, you’ll need to do everything to run it legally. Given your vending equipment will likely be on other property owners’ locations, you’ll want to make sure you have the following:
- An LLC or Corporation
- State, county, and city business licensing
- Business insurance
- Any food handling requirements
All of these have legal and tax implications, so I’d highly recommend talking with your local Small Business Administration office or a lawyer before starting a vending machine company.
If all this sounds intimidating, you might want to check to see if you can buy an existing vending machine business. Check the following sites:
- UpFlip: Businesses for Sale
- Facebook Marketplace
Be aware that you’ll need vending machines with credit card or analytics software to make the most profit. If you are buying a route that you cannot personally service, it’s even more important because it helps protect against employee fraud. Given many machines are cash businesses, it would be easy for employees or subcontractors to steal from the machines.
Keep reading for more on how to become a vending machine business owner.
Normally, I would tell you that you can have other forms of business structure, but you really need a Limited Liability Company or a Corporation as your legal entity for vending sales as a small business owner.
I suggest this because you’ll most likely be selling food products on somebody else’s property. That means a sole proprietor would be personally liable if someone gets food poisoning or is harmed by the machine. That’s too much risk for the money made per vending machine.
Check out our blog about how to register a business. We go through the process of business registration as an LLC and getting your Employer Identification Number (EIN) from the Internal Revenue Service.
Get the necessary business licenses for starting a vending machine business. These will vary based on your location. Start with a quick search about business licensing in your area, or talk to your local Small Business Administration office.
Business Bank Account
You’ll need a bank account for your small business because it is required to keep personal and small business funds and expenses separate to avoid personal liability. For more information, read our blog about business bank accounts.
If you start a vending machine business, you’ll need insurance to protect the company if someone is injured. I’d recommend having general liability at a minimum and potentially restaurant insurance if you plan on placing vending machines throughout a city or region.
You may also want to offer to put the property owner on the insurance so that their own business isn’t at risk if your vending machine has a lawsuit. They’ll appreciate it, and if you are working with more prominent companies or governments, they’ll require you to add them to the insurance.
I usually recommend starting by getting a bid from Simply Business.
Food Handling Requirements
Many cities will require food handling licenses if you work selling food. If you are starting a vending machine business, check if you need special licensing from the health department. Just search “health codes near me,” and it should bring up your local health codes for a business entity in your location.
Keep reading for information on buying a vending machine.
Step 5. How to Buy a Vending Machine
When buying a vending machine, remember to evaluate vending product options to establish which vending machine is suitable for you. Then, you’ll want to inspect used and refurbished machines. Let’s look at where to buy vending machines
Where to find vending machines for sale
I’ve separated the following places to purchase vending machines based on if you want:
- A new vending machine
- Used vending machine offerings
- Custom vending machines
- Refurbished vending machines
- Bulk vending machines
Where can I buy a vending machine new?
If you want to buy a new vending machine, you might be in luck because there are plenty. Most of them will offer to finance as well. Adam encourages buying new vending machines from an authorized AMSVendo dealer, while Ben discourages buying new ones because they are more expensive.
You’ll want to compare the vending machine price and features before deciding where to buy one, but some of the places you can buy machines include:
- Vending.com has the largest variety of machines, including specialty vending. The only option that isn’t on their list is ice machines, which makes Vending.com a great place to start.
- Sam’s Club has 12 Vending Machines for snacks, beverage vending machines, combo, and single-brew coffee (coffee maker not included). Based on the product listings, they don’t sell chilled, refrigerated, or freezer vending machines.
- Swyft has two main vending products and lockers. These are high-tech, specialty vending machines with analytics, inventory management, and multiple cameras. They are meant for locations doing $36K in business or more. Swyft also offers placement assistance and maintenance services.
- eVending.com has hot and cold beverage machine options, plus food and beverage machines, and specialty machines called a Sani-Center that offers masks, gloves, and sanitation wipes. They have diverse offerings based on the ten sites that were reviewed for this blog.
Alibaba also sells vending machines, and they are far less expensive, but that’s before shipping from China. I would only suggest using Alibaba if ordering in bulk.
Some places also suggest Vending World, but I am hesitant about websites where the pictures don’t load on a computer. It may be a temporary issue, but I can’t recommend it for that reason.
If you only need a few vending machines, I would go with one of these providers, but consider buying used machines when buying bulk vending machines. The reason I suggest this is because the savings can be tremendous as long as they all have interchangeable parts.
Purchase a vending machine used
You can buy a used vending machine or even full routes. Places to buy a used vending machine include:
• Going out-of-business sales
• Government auctions
• Search the web for vending routes for sale
Ben told us:
Make sure to inspect the machines very thoroughly when buying used machines. Business owners are notorious for poorly maintained machines. I actually have a story about this.
When I worked in HVAC, part of the job included maintaining and repairing ice vending machines for motels, schools, universities, hospitals, and other locations.
Business owners wanted to keep their profit margins as high as possible, which meant they didn’t regularly sanitize their ice vending machines.
That’s great for maintaining your overhead costs, but it can (and does) allow mold to grow. Mold remediation is far more costly than routine maintenance by a few thousand dollars.
The moral of the story is to maintain your machines to provide top-notch customer service.
Inspect Used Vending Machines Before Purchase
Make sure you check the vending machines before you buy them. Test:
- Each dispenser
- The coin and bill acceptor
- The credit card reader (if there is one)
- Compressor and fan for cooled machines
- If the unit is meant for indoors or outdoors
- If the machine feels cool (You can’t have candy and coke machines in the heat without a cooling system.)
- Dates on the packaging
- Look for frayed wires
- Look for mold, signs of bugs, or rodents
Used healthy snack and drink machines have refrigeration units to check. Be careful when buying them second-hand. If you aren’t mechanically inclined, bring someone who is when you look at the machines. Used machines will typically be purchased as-is.
Most of the companies that sell new ones also sell used machines. If you’re concerned about buying used vending machines, consider refurbished machines.
Find a Refurbished Vending Machine for Sale
Buying refurbished is an established business model where companies accept damaged products, fix them, and then resell them. If you’ve ever gotten a replacement phone with your warranty, it was most likely refurbished.
Buying a refurbished vending machine is the best of both worlds. You have low startup costs, but a warranty is typically half as long as buying a new vending machine. Anywhere you can buy new vending machines will often have refurbished options, but it will probably be much slimmer pickings.
Custom Vending Machine Options
If you need custom machines, your best options are Swyft, Vending.com, or reach out to one of the manufacturers on ThomasNet. Lead times are longer for custom vending machines, and you’ll be paying more. If you want to develop brand recognition, it may be the way to go.
Can I Get Financing for a Vending Machine Business?
Yes, the majority of vending machine suppliers offer financing options. Their terms vary, but many give estimates of the cash flow or profit that will cover the machine’s price. Don’t forget that Adam suggests only using machines that include:
• Credit Card
• Apple Pay
• Tap Pay
• I-Vend (guarantees the product comes out)
He also prefers food machines because they allow for more profitable options.
Step 6. How Much Does a Vending Machine Make?
It’s hard to give a solid answer as to how much a vending machine makes, but Swyft states that their machines require $36,000 a year to break even and that their typical machines make between $70,000 and $250,000 a year in high foot-traffic machine locations like airports.
In slower locations, you might only make a few hundred dollars a month. That’s still not too bad for a couple of hours per machine.
Ben told us:
How much do vending machines make?
It should be noted that owning multiple machines comes with significant benefits.
A single machine might only make a few hundred dollars per month at a low-traffic location. Meanwhile, a high-traffic location like an airport can be up to $250K per year. In addition, your passive income can skyrocket as your vending machine business grows.
Adam described what he considers a solid location:
Let’s look at revenue and profits for different numbers of machines.
As you can see, your revenue and profits can vary dramatically depending on how you run your business and where your machines are located.
Step 7. Where to Get Products to Fill Your Vending Machine
Part of learning how to start a vending machine business is buying the products to sell. Most people will buy their products from places like Sam’s Club or Costco, but depending on how many machines you have, you may qualify to work with a distributor. Given the speed of Amazon, you might also look for deals there. We put together a shop of vending machine products inspired by this blog. Check it out.
Adam told us:
Ben told us:
He also suggested using the online order functionality and just pick it up when you’re ready.
For other providers, go to ThomasNet.com.
The next step in starting a vending machine business is finding places to put your machines.
Step 8. Where Can I Put a Vending Machine?
You can put a vending machine anywhere a property owner will give you permission. Common locations for a vending machine include:
- Buildings with office space
- Grocery stores
- Hookah lounges
- Hair salons
- Gas stations
- Fitness centers
- Concert venues
Ben told us:
He also told us:
You also want to look for locations that have:
- Fifty to 100 people walking by per day
- Forty or more employees
- No competition preferably within two miles (grocery stores, gas stations, and restaurants)
Almost anywhere with lots of people is a great place to put a vending machine. That’s good to know, but how can you find specific places that need a vending machine?
How should I market a vending machine business?
Marketing is a big part of how to start a vending machine business. You’ll need to find property owners willing to let you put your vending machine on their property. That means you’ll need some common marketing tools!
- A website: Learn how to build a website with our easy-to-follow guide.
- Vending machine business cards: You need to have professional business cards to hand to business owners.
- Social media: Sign up for social media business accounts and market to business owners.
- Car decals: Once you have vending machines, car decals can help you get new clients because you’ll be driving around and parking at places with lots of traffic. You never know when someone will see it and need your services.
- Google Paid Ads: Successful businesses often use them.
- Product brochures: Have a pamphlet to tell business owners what you offer.
- Walk-ins: You can ask to speak to a business owner in person, but it’s lower success and higher cost than other ways of marketing.
Adam told us he spends $100 to $200 per month on Google Ads, and Ben suggests using marketing that says:
Make sure to sign contracts
You’ll need a contract to protect your machine, outline the responsibilities of each party, and commission (if applicable). One video I reviewed said 10% was normal to pay to have a vending machine at a property, but don’t volunteer it. You might be able just to offer the service and not have to pay for it.
Adam discourages paying to put your units on the property. It reduces your profitability.
LawDepot for quick, easy contracts tailored to your business.
How much does a vending machine weigh?
Empty vending machines weigh between 400 and 900 pounds. Climate-controlled machines like drink machines, ice cream machines, and combo machines, weigh closer to 900lbs. While snack and candy machines are much lighter. Make sure to use a dolly to transport them.
Step 9. Where Should I Store the Products for Vending Machines?
In a YouTube video about how to buy vending machine products, the business owner suggested keeping them at your house in a container that can be locked. If you don’t lock the products up, expect your family to eat them.
He was quite entertaining! Check out his YouTube below:
Both Adam and Ben suggest using a storage facility to store your snacks, drinks, and extra vending machines.
Step 10. How Do I Maintain Vending Machines?
When you start a vending business, you’ll need to maintain your machines. You can either learn to do this yourself or pay subcontractors to monitor them. Join the National Automatic Merchandising Association and take some of their certification courses to learn about:
• Level 1: Job fundamentals
• Level 2: Refrigeration
• Level 3: Electronics
They also have selling and business courses.
Ben also told us:
Step 11. How Often Should I Check the Vending Machines and Empty the Money Collected?
It depends on how busy the locations are. Most locations will need to be done weekly or every other week. If it’s a busy location, you may need to check them even more frequently.
Adam told us:
Ben gave some advice too:
Ben also told us
He also said:
Definitely use automation to help you improve your profit margins.
Your Free Vending Masterclass: Everything you need to start a vending business in less than one hour. We’ve partnered with Adam to unravel his decade-long experience & help you launch a 6-figure vending business today. Access this free masterclass here.
Go Start a Successful Vending Machine Business
After you get your first location, start putting the revenue into more machines, and you’ll scale in no time. If you enjoyed this article, share it and leave a comment.
Don’t forget to sign up for our vending machine free training program with Adam.
What kind of vending machine company are you thinking about starting?