Making money with vending machines is another way to earn passively. In this article, we will go through what it takes to operate a successful vending machine business.
What Is Passive Income
According to Wikipedia, “income resulting from cash flow regularly received, requiring minimal to no effort by the recipient to maintain it.”
Different types of passive income are investing in stocks or bonds, real estate rental properties, royalties, or even residual circulation. However, this article will focus on one specific kind of passive income: making money using vending machines.
I’m not talking about selling snacks and drinks for immediate consumption. Instead, you’ll be selling items that have a resale value, so once your customers buy them, they can take the product home with them – or resell it themselves.
This means you don’t have any special licenses to start operating, just some money to invest in your first vending machine(s) and maybe some time to make it profitable.
Types Of Available Products
You can sell many different items through a vending machine, but soda cans, snacks like chips or cookies, energy drinks, and water are the most commonly used. It’s vital that whatever you choose has a resale value which means it doesn’t go bad quickly or is hard to damage once opened/eaten.
Advantages Of Having Your Own Vending Machines
Ready-made business. With vending machines all over, people will think twice before looking for another location from which to get their favorite drink. This means less competition and more customers for you!
No employees are needed. Once your business is up and running, you’ll be able to relax at home while your vending machines do the work for you. No more worrying about hiring someone to run all of this; hire someone to take care of your accounting if needed.
No limits. You get to choose what items to sell from your vending machines, so no matter where you are or how often you go on holiday, there will always be a constant stream of money coming in!
A Small Investment Can Lead To Significant Earnings
Some people have even turned their vending machine business into a million-dollar empire. But, of course, this does not mean that it will happen automatically after reading this article, so keep your expectations realistic. It all comes down to research and finding the perfect product, location, and price – nothing more, nothing less.
Now you know what passive income is and the different options available to start earning it. Here is some more information on how much you can earn through this kind of business, how to get started, how much you need to invest in making it happen, and how long it will take before your first earnings.
How Much Can You Earn
Can you earn $100,000 per year at the machine? No. For example, 100k/year is not realistic unless your unit holds 1000+ 20oz bottles/day (about $3 average revenue each). At that volume, expect electricity usage to run 1500-2000 watts ($15-$20/mo), plus Internet ($50/mo) if you use it for remote management, or $20-$30/mo telephone line (just for the modem).
To create a decent passive income, one would need around ten machines with an average net profit per machine close to 500$.
Other factors to consider are the cost of supplies (e.g., drinks, bags, napkins), rent/mortgage/utilities, insurance, and other business expenses. You also have to factor in that vending machines do not last forever. The useful life of a machine can range from 5-15 years, depending on usage.
How To Get Started
You’ll need a place that will serve as your headquarters or base of operations if you want to call it that way. So either build your building or rent/buy an office space where you can have at least one private room with enough space to house one vending machine(s).
As for machines, remember our earlier discussion about items with resale value? Of course, you can’t go wrong with soda cans or snacks because every supermarket around sells them, so competition isn’t high, but the price is still enough not to scare customers away.
How Much Do You Need To Invest In Starting
In total, depending on where you live and the cost of living there, it’s safe to say that you can start a reputable vending machine business for under $20,000. This includes buying your first machines, placing them strategically around the city, and renting a small office space or warehouse which you’ll turn into an office for yourself.
As I said earlier, this is not a get rich quick kind of thing, so if you are expecting immediate earnings, I’m afraid this is not for you – unless one of those ten machines gives out unexpectedly and leaves you with nine others bringing in 300$ each every month!
What About The Vending Machines Themselves? How Do I Choose Which Ones Are Right For Me
Coke and Pepsi machines are the most common you’ll find, so they’re worth a look. Coke is better because it owns more of its distribution outlets than Pepsi does.
You can buy a Coke machine outright for about $2,000, whereas a Pepsi machine will be closer to $4,000. I have also seen drink vending machines offered as part of multi-vending deals where you purchase 10 or 20 machines at once – this includes free delivery and installation and a one-year service warranty.
How Much Time Is Involved
As we all know, time equals money, so how busy will you be running your vending machine business? I’m going to go out on a limb and say that you’ll be spending more time preparing for the installation of your vending machines than actually operating them.
Once the location, item, and machine are chosen, it will require 2 or 3 visits from a technician who will make sure everything is set up according to the manufacturer’s specifications (in case of any troubleshooting).
After location, items, and machines you can train employees if needed before they take over the day-to-day operations. Of course, you need to take care of updating prices, checking inventory levels, and reordering stock when required, but one visit per month should be enough to keep things in order.
Here’s a list of what you need:
- Start-up capital (you can finance some or all of it but beware that credit card payments may restrict your ability to obtain future credit).
- Proper location (location is the most important factor in determining success).
- Inventory (most people start small and add more machines as they go along).
- Hours of study and effort.
- An open mind and willingness to learn.
- A product that sells well in your area easier than others (i.e., not a perishable item such as milk when it’s hot outside).
