Vending Machine Business 101
How It All Started
It was late July when I scrolled past a business listing on BizBuySell for a vending machine business. I looked at the financials and found these 4 vending machines were producing a monthly profit of $2,500. I am not sure about you, but for me, a $2,500 cash flow per month moves the needle. We pursued the deal, but got out bid. However, after seeing the financial statement for that small route of vending machines I was sold on this being my next side hustle. This business idea was part of my enduring discomfort of 2022.
Jumping In
It wasn’t more than a couple weeks later that I was scrolling deep into the Facebook Marketplace listings. I came across a private seller who was selling 4 Naturals2Go vending machines. None other than the exact type and quantity of the vending machines I had pursued from BizBuySell. The listing was asking $20,000 for the machines. I offered $15,000 and they took the offer.
It’s important to note here that vending machine prices are all over the board. You can get them used for a couple hundred dollars or you can buy them new for up to $10,000 each. The Naturals2Go vending machines were a GO for me because:
- They all came with Nayax card readers.
- They dispensed both food and drinks (combination machine)
- They looked appealing and I have the tendency to want nice shit for my businesses.
Moving the Vending Machines
Pallet Jacks
The vending machine business is pretty easy, fairly passive, and can be lucrative. One thing that really sucks about the business is moving the machines. Moving vending machines usually requires a pallet jack. This is one we bought from Harbor Freight. For some vending machines, you could get away with a heavy duty appliance dolly, but you can’t go wrong with a pallet jack.
That being said, if you want to buy the right pallet jack that will move any vending machines; buy the one that has narrow forks. Standard pallet jacks will fit under the front side or the back side of the machine (where the machine is widest), but they will not fit under the sides of the machine. And this can be very useful when trying to get your vending machine through a standard 36″ door. A brand new pallet jack will cost about $400, but you can buy used ones for cheaper.
Bottom Line: If you’re serious about being in this business, a pallet jack is vital.
Transporting Vending Machines
Lift Gate Trucks
The next thing that sucks about the vending machine business is when it comes time to deliver or move them from location to location. Vending machines (especially machines with refrigeration) shouldn’t be laid down flat. So you’ll need the proper equipment and vehicle to pick up and transport the machines. The standard is having a vehicle with a hydraulic lift gate, other wise known as a Tommy Gate. This will allow you to roll the machine on the lift and bring the machine level to the height of the truck bed.
The Vehicle
In order for us to check both boxes of having a lift gate and a truck heavy duty enough to transport (4) 800 pound vending machines, we rented a box truck from Penske. It was easy, but doing this everytime you need to move a machine can get costly quick. Plan your deliveries and routes so that you can minimize the amount of time you have to rent a box truck. Or better yet, ask around and see if any friends have a lift gate on their personal pick trucks and use theirs!
Storage
Ok, so you’ve done your homework after reading this post. You’ve mapped out a day where you’re going to rent a lift gate truck and pick up a few vending machines you found on Marketplace or Offer Up. Once you’ve picked up your machines, where are you going to put them? If you don’t already have a location that has committed to getting one of your vending machines then you’re going to have to figure out a place to store them. For us, we went with a storage unit from Jack Rabbit. The cost is about $120 per month, but we’re only planning on keeping the machines in here until we find locations- so well worth it. A few things to keep in mind:
- Storage Units don’t have electrical. So, if you plan on plugging in your machine and configuring it in the storage unit, you’ll need a heavy duty external power supply, a generator, or an inverter on your vehicle.
- Storage Units heavily frown on your storing food and drink because of rodents so think of plan B when it comes to this.
- Storage Units generally allow you to rent a space on a month to month basis so not having a long term commitment is nice.
Vending Machine Types
We went with Naturals 2 Go vending machines because we knew they were good machines and we got a killer deal on them. However, you don’t need to spend an arm and a leg on vending machines. Used machines are generally a couple of hundred dollars, but can be worth a lot more if the location comes with them.
One of the main reasons we went with Naturals 2 Go was that they were already integrated with Nayax credit card readers.
Card readers not only boost sales, but Nayax card readers also have a robust back end that allows you to track your inventory levels remotely. This was a huge deal for me because I wanted to keep this business as passive as possible. Knowing what needs to be re-stocked and when is absolutely vital, in my mind, to keeping it passive so I was willing to pay a premium on expensive machines.
Combination Machines vs.Traditional Machines
I am not sure where along the line the idea was planted in my head that combination vending machines were the bee’s knees. I can say, with only a few months of experience, that combination machines are not the bee’s knees. For one, most vending machine sales are for drinks, not snacks. Combination machines (machines that vend both snacks and drinks) do not have a large capacity for holding drinks. The Naturals 2 Go vending machines hold roughly 80 drinks at a time. A dedicated drink vending machine can hold 4-5 times this amount.
With that knowledge, I would probably go with a dedicated drink vending machine and dedicated snack vending machine for high traffic locations rather that just get 1 combination machine. The combination machines, in my opinion, are not well suited for high traffic locations. Ironically, they are also the most expensive vending machines on the market. Things that make you go Hmmmm.
Take a look at the picture above. This is what a drink machine looks like on the inside. As you can see, there is a ton of capacity for holding drinks. That’s a good thing because the higher the capacity, the less often you have to come back and re-stock the drinks.
The picture isn’t great, but this is the combination machine that we have at a warehouse. Notice the bottom two rows are pretty much all of the space you have for loading drinks. Each row holds 6 drinks. This can get depleted quickly at a high traffic location causing you to go and re-stock more often!
Summary
So far, I am really digging this side hustle. 3 out of our 5 machines are in service and are on track to produce over $1,000 in sales each month. Once the other two get placed in service, it should only get better. If you’re thinking about getting into the business here are a few takeaways:
- Don’t overspend on your vending machines, unless they come with a location.
- Credit card readers can increase your sales and some let you remotely track your inventory.
- Moving and storing these things are a bitch and where you’ll spend most of your big money.
- Combination machines are, in my opinion, not the best bang for your buck.
That’s all I got for now. Best of luck and drop me a line if you have any questions!
-The Frugal Fireman (Dan)
