Earn More Money, InvestingJanuary 19, 2020February 17, 2020

Vending Machine Businesses Make This Much Money

One thing that I love about writing is that I get to learn. If there is a topic that I do not know about, I learn and share it with you all. This is one of those articles. The other day I was at an apartment complex and saw a vending machine. As I stood there I thought to myself “how much do these make.” That thought stuck with me for some time. However, it grew into an idea of how to make money. How much money can a vending machine make? For that matter, how much can multiple vending machines make? Those are the big questions. Therefore, we are going to see how much money a vending machine can make.

What Is A Vending Machine Business?

This is a business where an individual or company owns a multitude of vending machines. However, there are many different types of machines. There are the larger ones that you see in schools and malls. Furthermore, there are smaller machines that you can find in laundromats or businesses. The larger machines cost much more. However, they can yield a larger return. If you want to create this type of business. You will want to have the goal of own multiple machines in high traffic areas. This way you can maximize the amount of profit due to the increased amount of traffic.

How Does It Work & Pricing

To start, you will need some capital. This can be earned in a multitude of ways. You can become a YouTuber, music producer, personal trainer or even a pro gamer. However, the road is ultimately chosen by you. Once you’ve accumulated enough money, it’s time to decide which type of vending machine you want. Large, small, soda or snack. There are many different types. If you’re just starting out, I’d suggest the smaller gumball machines. This is due to the fact that it is easier to find a space to put them. They’re lighter and easy to change.

Once the machine is purchased, find a location. This can be a building complex, office building, schools, laundromats, etc. However, you may be lucky enough to purchase a vending machine on sight. Once you find a location, you need to speak with anyone who makes decisions on these types of things.

For example, if you contact a laundromat, you will need to speak to the owner. For a condo, it may be the property manager. A quick call to the service help desk will point you in the right direction. For the location, you can either offer to rent out the area or pay commission. I’d suggest a commission because you only pay them if you earn money.

Lastly, stock up your machines and take them to the location. Pop machines tend to be especially heavy. Therefore, stocking them when you get to the location is always a great idea. If you have a truck, use that to take the machine, otherwise, you’ll need to arrange transportation. Be very careful because vending machines kill more people than shark attacks per year. Lastly, you will want to stop by your location(s) on a weekly basis to restock the machine and pay your commission.

Average Income

The income you can earn depends on many factors. The amount of income you earn is affected by location, type of machine, and snacks/drinks that you offer. Therefore, you can make a lot of money or very little. Generally, it is a good idea to find areas that have a high amount of traffic. However, it is also a good idea to find an office building. In an office building, you have many people who eat in the cafeteria for lunch. Many of these people opt-in for a snack while eating. To get a range of how much you can earn, we will take a look at some statistics provided to us by the government of Canada for 2017.

There is a monumental difference between the top quartile and bottom. As you already assumed, the highest earners have the most machines, the best snacks, and the most valuable spots. They take up the best vending machine real estate. However, the lower earners, although making $30,000, are less efficient. If you wanted to see the most money the top quartile makes, you can see its around $5,000,000.

If we are looking for average, it will be between the lower and upper-middle earners. This means that the average earner is around $77,000. That is an amazing amount, more than most single-income households.

Maximize Earnings

There are a lot of things that can be done to maximize earnings. One thing that most people overlook is the fact that people tend to not bring cash around anymore. The world is becoming digital. Therefore, people keep all their money on their cards. This is where the type of vending machine you get plays a huge role. If you’re looking to invest in larger machines, get one with a card reader.

This statement by the bank of Canada outlines the demographic that mainly carries cash. However, since 2009, there has been a clear downward trend in those who carry cash. More than half (54%) of people don’t use cash in their everyday purchases. This means that if you own a vending machine that does not accept cards, you’re leaving money on the table.

Another point to be made is that first impressions do matter, at least a bit. If you have a new, shiny machine with all the bells and whistles next to an old one, which one would you choose? The goal is to maximize earnings. Therefore, having a new machine with the best snacks in a high traffic area that accepts digital payment is what we need.

The Potential

As you could imagine, the potential for earnings is high. Theoretically, you could earn $150 a week per vending machine if they’re in a good spot. However, this number can be higher or lower depending on what you price the snacks at. For the sake of this article, we’ll go with $150 per week. Having 10 machines that each earn $150 per week adds up to $1,500/w. This equates to $6,000/m and $72,000/y. This may sound amazing. However, you need to incorporate the costs associated with running this type of business.

Initial Investment

The initial cost for machines can vary greatly. I’ve seen machines for $1,000 and others for $5,000. Let’s say you buy those 10 machines for $2,500 each. This means you’re investing $25,000 in total.

Repairs

Next, repairs. Machine maintenance is fairly minimal. However, parts do tend to break often depending on how often the machine is being used. Bills and coins get stuck very often. Therefore, it’s helpful to learn the mechanics of the machine to fix smaller problems.

For larger problems, you may have to contact a company that specializes in repairs. Finding a company is easy but a solid price is difficult. This is due to the fact that the cost depends on the type of repair. However, from anecdotes, I found that a machine can cost $100+ per year and machine. This means that you’ll spend approximately $1,000 per year in total. However, the statistic provided by the Government of Canada website state that you’ll most likely be spending between $1,500/y and $3,700/y.

Lastly, refills. This one greatly depends on the types of snacks you get and the grocery store that you use. Some people have a supplier which allows them to get bulk snacks for less. However, the chances of you having to refill the whole machine on a weekly basis are quite low. Since we’re in a high traffic area, let’s assume you’re spending $30 a week per machine. That’s $300 per week which equates to $15,600/y. Therefore, if we add up all the expenses in this hypothetical example, your annual cost for 10 machines is $16,600 with an initial investment of $25,000.

You won’t be purchasing 10 machines right off the bat. Therefore, you won’t be shelling out $25,000 right off the bat. However, everyone’s experiences are different. Therefore, your operating cost and investment may be lower or higher.

Alternate Option: Leasing

The last part that I want to talk about is leasing. Just like a car, you can lease a vending machine. There are many suppliers that offer this option. Leasing machines means that you pay a company a certain amount of money per month for a set amount of years. You do not own the machine. However, you are allowed some perks. For example, if you lease a machine, the company may offer maintenance, shipping, moving and repairs. Therefore, leasing a vending machine might be more advantageous.

Shameed Chris Khan

Shameed is just a man on a mission to help those around him gain financial success. Obsessed with writing about all things finance, this GTA native is constantly learning and sharing his experiences with others.