Before the pandemic, I worked at an ad tech startup in California and made $240,000 a year including sales commission.
But as the country went into lockdown in March 2020, many of my retail, restaurant and entertainment customers did the same. Even after putting in long hours, I struggled to reach my sales quota.
That spring, I read on Twitter that someone was making passive income by placing vending machines in office buildings. This immediately piqued my curiosity.
So, in June and July, I bought two machines for $5,000 to get things going. Things were slow at first, but I was hopeful that I could scale the business. I left my day job that summer to devote all my time and energy to it.
I’m glad I took the risk: Today, I have 57 ATMs scattered around my hometown and bring in an average of $30,000 in monthly revenue.
Over the past two years, I’ve spent about $160,000 on machines, but have positive cash flow and zero debt. I only have to work six hours a week on vending machine operations. I can spend the rest of my time on other projects, like my online coaching business and trying to find new machine locations.
Here is my five-step process for getting started in the vending business:
1. Land in a busy place.
For my first location, I called a friend whose father owns a mechanic shop. The store had 10 employees and only sold $181 worth of product in the first three months, but that got my foot in the door.
My second location was in an apartment building and I sold $1,200 worth of product in the first month.
The best way to get a location is cold calling. I target buildings that have a lot of employees or foot traffic. I recommend to use D7 Lead Finder, which helps you find different types of businesses in a specific area and contact information.
Ask to speak to the owner or manager of the business and tell him that you would like to place a machine at his location. Explain the benefits (eg convenience of snacks and beverages for employees or customers) and explain how you would handle all responsibilities.
Many sites simply want the vending machine services without having to pay a premium for installation and maintenance. A vending machine business owner, for example, owns 21 locations but only pays one location 15% of his monthly profits.
2. Buy a quality machine.
I bought my first vending machine on Craiglist for $1,000. I also got offers on OfferUp and Facebook Marketplace.
But in hindsight, it was a waste of time and money. I have found that it is better to buy new machines from a local supplier, even if it can cost up to $4,000. They are more reliable and require less maintenance.
I shop frequently at Ross Vending, which has a full warehouse of new and refurbished machines.
For new sellers, I suggest buying a stackable drink machine. It contains six to 10 product types, which means you don’t have to buy so many variations and can experiment with what sells.
A stackable beverage machine only sells a few types of products and is more suitable for beginners.
Photo: Quinn Miller
I only buy three types of vending machines. For snacks I use the Crane 167/168. For drinks, I use the Royal stackers or the BevMax 4.
3. Buy a credit card reader.
Not all machines have credit card readers, so I bought one from Nayax for my first machine. They can cost up to $399, but are well worth the price.
Nayax Card Readers show you live sales through their website and app, meaning you don’t have to physically go to the machine to see what needs restocking.
Credit card readers provide customers with an alternative payment option. Losing a sale because someone has no money on them is not good for business.
Also, the customer pays the credit card processing fees, not the seller.
4. Pay someone to move the machine to your location.
Once you have a location, you can visit to scout where it will be.
Vending machines are heavy and dangerous to move, so it is difficult to install them in tight spaces.
It costs around $100 to $150 to pay a professional mover, but it’s worth it. Your machinery dealer can put you in touch with a local, experienced mover.
5. Buy products from wholesale stores.
I have a 2,000 square foot warehouse where Pepsi and wholesale suppliers deliver products that my two part-timers use to store our machines.
But I always buy products from stores in bulk because the deals are great. When it comes to storage, Sam’s Club takes the crown.
Depending on your product line, it costs between $250 and $1,000 to fill a machine. My first machine was $250 in stock.
When deciding what to sell, start with popular and recognizable brands. Test what sells and what doesn’t. Aim for items will give you a profit margin of between 50% and 75%.
I love owning a vending machine business. My biggest problem is when the slot machines get stuck, but I wouldn’t trade it for the stress of my previous 9-to-5 job.
quinn miller quit his six-figure sales job in 2020 to run his vending machine business full-time. Follow him on Twitter @quinnmiller.
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