How to Start a Vending Machine Business | Ultimate Guide

Last Updated on February 19, 2023 by Chris Panteli

How to Start a Vending Machine Business

In the US, there are millions of vending machines generating over $23 billion in revenue every single year. 

They’re not a new business idea, but vending machines are an easy way to make extra cash every month with relatively little work. 

If you’re looking for an interesting business idea, we’ll show you how to start a vending machine business and scale it up quickly.

Live somewhere that gets a lot of snow every year? Did you know you could easily make an extra $1000 a month with a snow removal side hustle? Here’s how.  

Why Launch a Vending Machine Business?

It takes time and effort to set up a vending machine business, but it comes with some key benefits if you’re willing to do the work. 

Easy to Start

You don’t need special training or qualifications to start a vending machine business. In fact, as long as you have the funds to buy your first machine, there are no real barriers to entry. 

24/7 Sales

Vending machines are one of the few businesses that generate cash 24 hours a day. Passive income is hard to come by, but owning a vending machine lets you make money while you sleep. 

Lots of Products to Sell

There are endless options when it comes to which products to sell. From snacks and soda to toiletries and toys, you can decide what you want to sell and for how much. If something isn’t selling, you can simply switch it out for another product.  

Be Your Own Boss

Perhaps one of the best benefits of owning a vending machine is being your own boss. You can decide your hours, expand when you like, and you don’t have to report to anyone. It takes dedication, but it’s very rewarding. 

Easy to Run

Vending machines are incredibly easy to maintain. Most come with tracking, so you know when they’re running low on products, and you rarely have to deal with the customers you sell to. Win-win!

Vending Machine Business Opportunities

Broadly speaking, there are four types of vending machines you can choose from:

1. Food and beverage
2. Sale in bulk (candy dispensers, toy machines, etc.)
3. Specialty vending machines (hot drinks, tobacco, medicine, etc.)
4. Franchise (more on this one later)

The type of vending machine you go for will depend on the location, demographic, and your budget. But it’s important to research all four to figure out which would work best as a business for you. 

Location will play a pivotal role in your small business since it will dictate what sells well. Some popular locations include:

• Schools and colleges
• Hospitals 
• Grocery stores and malls
• Airports
• Laundrettes
• Apartment complexes and residential condominiums
• Manufacturing plants

Vending Machine Business Ideas

Let’s take a closer look at some of the vending business ideas you could choose and where they work best. 

1. Soda and beverages

Soda and cold drinks are the top-selling products in vending machines in the US. In fact, they make up about half of all vending machine sales in the States. 

Almost any location works for a soda vending machine, you just need to figure out (with some trial and error) which drinks are most popular.

Best locations:

• Shopping malls
• Train stations
• Office blocks
• Hospitals

2. Snacks

The next best-selling item for vending machines is snacks. In the US, the top-selling snacks are Snickers Bars, Clif Bars, Pop Tarts, Lay’s Chips, and Reese’s Peanut Butter Cups. 

Best locations:

• Train stations
• Shopping malls
• Schools and colleges

3. Candy

Candy involves using bulk machines – think of a gumball machine that dispenses a handful at a time. 

The benefit of these types of vending machines is that the products have an extremely long shelf life, so there’s little maintenance needed from you. On top of that, kids everywhere love a candy machine, so there’s a wide market. 

Best locations:

• Shopping malls
• Indoor play areas
• Family-friendly restaurants

4. Hot beverages

You need a specialty vending machine for hot beverages, which costs more than regular machines. The upside is the profit margin is higher, and there are more location options willing to have one installed. 

Best locations:

• College campuses
• Office buildings
• Shopping malls
• Train stations
• Libraries
• Hotels

5. Burgers and hot food

Again, you’ll need to invest in a specialist vending machine for hot food, but the profit is higher. For burgers, in particular, there are some specialist companies already on the market offering quality machines, such as RoboBurger.

These take more maintenance and checks but can be incredibly lucrative in the right vending machine location. 

Best locations:

• Near bars and nightclubs
• Beach resorts
• Train stations
• Stadiums
• Arenas
• College campuses

Looking for different small business ideas? Head to our next guide to find out how to make extra money during the festive season by installing Christmas lights. 

How Much Can You Make Owning a Vending Machine Business?

An average vending machine generates around $75 a week (that’s around $300 a month). Specialist vending machines tend to generate more, whereas some generate less – it all depends on the location. 

This might not seem like a lot, but the work involved is minimal, and you can boost your profits by reinvesting in more machines. 

In the US, the most successful vending machine company is Azkoyen Group, which generates over $161 in annual revenue.  

Things To Consider Before Starting A Vending Machine Business

Before you start Googling vending machines for sale, there are a few things to do to make sure your new vending business will be a success. 

Market research

Whether you’re starting a junk removal business or opening a new restaurant, you must start with market research. 

Start by doing some research on your area to begin your business plan. Where are there already vending machines? Where are the high-traffic areas that would benefit from a vending machine? What kind of products would sell well?

If you’re in a city focused on healthy living and outdoor life, a burger vending machine might not be viable. However, a healthy snack and beverage machine could be extremely popular. 

Start by scouting out several possible locations and then ask the locals what they’d like to see in a vending machine. This will help eliminate much of the trial and error at the beginning. 

Costs

You’re probably wondering, how much is a vending machine? For a refurbished machine, you can expect to pay between $1000 and $4000. But for a brand-new vending machine, the price is around $3000 to $10,000, depending on the model. 

You’ll also need to factor in license fees, business registration costs, rental prices, and stock. 

Do your research and make a full list of costs to know how much you’ll need to invest. 

License

The licenses you need to operate a vending machine business differ between states. However, as a general guide, you’ll need:

• A federal Food/Beverage Service License if you plan on selling snacks or drinks. 
• A state vending machine business license. 
• A city license or permit. 

Again, it’s important to check which of these you’ll need with your local authority. 

Inventory

Research local suppliers in your city and have a reliable one lined up and ready to go. Vending machines can sell out quickly, and people will forget about them if they’re not constantly stocked. 

Get a couple of quotes from different suppliers and make sure they have quick delivery times for your products. 

Pricing plan

The prices you charge for your items will depend on the type of products and location. However, as a general guide, you should aim to price items at least double the wholesale price. 

Most machines have digital pricing that is easily adjusted. It might take some trial and error at the start to get your prices right, but don’t make the mistake of pricing too low and cutting into your profit. 

Top Vending Machine Companies

There are dozens of vending machine companies in the US, but here are a few of the most popular suppliers for new vending machine businesses. 

U-Select-It (USI) 

USI is one of the biggest names on the market. Founded back in the 1930s, they supply thousands of vending machines to different business sectors across the US. 

If you’re looking for specialist machines, USI models come with all the bells and whistles, so it’s worth looking through their catalog. 

Crane National 

Crane National is another leading vending machine supplier backed by Crance Merchandising Systems. This company started in the 20s and is known for its reliable automated vending machines. 

Fuji Electric

Fuji Electric is a Japan-based vending machine supplier known for its high-tech machines. It has a global network of suppliers from the US, Europe, and Asia. You’ll see a lot of Fuji machines at airports, arenas, and hospitals since they’re known for their specialist machines. 

AMS Vending Machines

This one is another trusted name in the vending machine industry. AMS has been around since the 90s and now dominates the South American and Mexican markets. For traditional vending machines serving snacks and beverages, AMS is a great choice.

How to Start a Vending Machine Business

If you’re sold on the idea of a vending machine business and want to get started right now, there are three options you can choose from. 

1. Buy an existing vending machine business

This is probably the easiest option but the rarest one. Sometimes, you’ll find a local vending machine business looking to sell, which means you pay for their machines and existing contracts. 

If this is an option, do a thorough analysis of their books to determine if the business is viable. Here are a few questions you should be able to answer:

• Why are they selling? 
• Is the business losing money? 
• Is there a way for you to add value and boost profits?
• Are the machines in good working condition?
• Are the contracts expiring, or can you renew with existing customers?

2. Buy a vending machine franchise

Franchising is another option if you want to start a vending business. Buying a franchise means all of the administrative and operational infrastructure is in place, and you’re buying a business model that is proven to work. 

Franchising costs more than starting your own company from scratch, but it can save a lot of the initial legwork. 

Here are a few of the most popular vending machine franchises in the US:

• Fresh Healthy Vending
• Pharmabox
• Xpresso Delight
• Naturals2Go

The level of support you get setting up your franchise differs between companies, and the amount you invest is hugely different. Do your research, and make sure you’re aware of all the franchising options in your area. 

3. Start your own vending machine business

Setting up your own vending machine company requires the most work, but it also gives you total freedom over your vision and your profits. 

Starting from scratch means sourcing your own machines, finding suppliers, doing market research, and securing contracts with small business owners. But it is certainly the most rewarding way of making money with vending machines. 

Managing a Vending Machine Business

So, how do you manage a vending machine business? Here are the tasks you’ll be responsible for every month:

• Monitoring stock levels and keeping your machines stocked.
• Rotating products to see what sells best. 
• Finding new contracts with local businesses and renewing old ones. 
• Marketing your vending machine locally. 
• Carrying out any maintenance or hiring teams to do repairs. 
• Scouting new locations for more machines. 
• Dealing with suppliers and finding the best new stock. 

Promoting a Vending Machine Business

If you’re not making great sales with your first vending machine, it’s probably because no one knows about it yet. Here are some quick and easy marketing tips to increase footfall and boost profits. 

1. Advertise on Nearby Roads 

Your vending machine should be in a great location with a lot of foot traffic – that way, it sells itself. But you can still advertise on nearby busy roads and thoroughfares. 

Have a few eye-catching signs printed showcasing your most popular products and place them in high-traffic areas near your vending machine. 

2. Post Fliers

If you have a vending machine in a residential area, have fliers made up and post them door-to-door. A simple headline like “Need a Coffee?” or “Snacks on Your Doorstep” is all you need to catch people’s attention and let them know there’s a new place to get snacks in town. 

3. Offer Free Vends

Some new machines have the ability to give free vends and discounts, which is a great marketing tool. Add this offer to your marketing materials, signs, and fliers to get people interested. 

4. Use Local Social Media

Find local groups and pages on social media to showcase your new vending machine. Locals love when their neighborhood gets something new, so this kind of grassroots marketing can be extremely effective. 

5. Talk to Businesses

If your vending machine is near local businesses, you’ve got a great source of business to target. Ask local businesses if you can advertise on their bulletin boards or give their employees a discount for using your vending machine. 

Vending machines tend to do well in business districts because employees crave snacks and need drinks when working long shifts. So, this could be a great source of foot traffic for you. 

6. Giveaway

Everyone loves something for free. Easily generate foot traffic by hosting a giveaway. It could be something small, like a goody bag of free swag, or something larger. 

Get people to take pictures with your new vending machine and post them on their social media with a specific competition hashtag – once you have enough entries, you can choose a winner at random. 

This is a great way to generate buzz around your new business and shows locals you’re interested in being part of the community. 

Maintaining a Vending Machine

Vending machines get left for long stretches of time, so maintenance checks are a must. You won’t know your vending machine is broken or not working properly until you visit, and if customers find it broken, they’ll assume it’s abandoned and won’t come back. 

At least once a month, perform quick maintenance checks on your vending machines, including:

• Make sure all the buttons, lights, and card readers are functional. 
• Buy something to ensure the internal mechanics are working. 
• Wipe down the outside to remove dust, dirt, and any graffiti. 
• Check each slot of well-stocked. 
• Sweep and clean up the surrounding area if it’s outdoors. 

And, of course, check the cash bin to see how much you’ve got!

Tips for Starting a Vending Machine Business

If you’ve done all your research, considering all the factors, and you’re raring to go, here are the steps to start a vending machine business in your city. 

1. Decide what you want to sell

You can’t buy a vending machine until you know what you want to sell. Will it be snacks or beverages? Candy or coffee? Toiletries or medication?

Figure out exactly what you want to sell and have a few suppliers lined up and ready before you invest in a machine. 

Remember, choosing the right products links back to your market research – you need products that will be popular with the local demographic. 

2. Determine the vending machine features you want

There are hundreds of options when it comes to buying a vending machine, so it’s best to know exactly what you want before you go shopping for one. 

At the very least, your vending machine should have a card reader. Older models only take cash, but as cash becomes less and less common, you’ll limit your profits without a card reader. 

Here are a few other features to think about:

• Interactive touch or voice-activated screens
• LED lighting
• Graphic and branded wraps 
• Combination food and drink dispensing
• Software for remotely monitoring stock levels in the machine

The more features a vending machine has, the more expensive it will be. But think of it as a long-term investment that will make you money for years to come. 

3. Find the right vending machine

Now, it’s time to buy a vending machine and vending equipment. When you’re just getting started, it’s best to buy just one and get to grips with running it. Once you’ve figured out the monthly maintenance and how to turn a profit, you can expand to more machines. 

We looked at a few of the top companies for buying new machines earlier, but if you’re looking for a used or refurbed machine, you can also check wholesalers, Amazon, and specialist online sellers. 

4. Choose a business name

Your brand needs to be short, snappy, and memorable, so people remember to come back and buy from your machine again. You also want something that scales for when you invest in more machines. 

Look at your local competition and choose a name and brand colors that set you apart. Your branding should also reflect what you sell (e.g., fun and whimsical for candy; corporate and professional for a business coffee machine, etc.)

5. Find locations for your machines

Since you’ve already done your market research, you should have a few potential locations in mind for your new vending machine. Now is the time to narrow that down and talk to the property owner to find the perfect placement. 

Make sure the area you choose has high foot traffic and the right demographic for your products. There are also compliance requirements to think about when placing a vending machine, so make sure you’re up to date with the rules in your city. 

6. Sign contracts

When you find the right place for your vending machine, it’s time to draw up a contract for the business owner. Most business owners will expect compensation for housing your vending machine, which needs to be outlined in the contract. The average is 7% of profits, but some owners will expect more. 

For your own protection, you should also include how long you’re allowed to keep the vending machine on their premises and have a clause that prevents them from placing competing machines while yours is there. 

Having a contract keeps both you and the other business covered, so spell out all the terms and conditions and get a lawyer to check over the wording before signing anything. 

Is a Vending Machine Business Right for You?

So, that’s how to start a vending machine business. If you’re looking for a relatively easy business to set up that generates passive income, you’ve hit the jackpot with a vending machine business. 

Quick to start, easy to run, and potentially incredibly profitable, it’s easy to see why people invest in vending machines across the US. 

If vending machines aren’t your style, there are so many other small business ideas you could make extra money from. 

In our next guide, we’ll show you how to start a pack-and-ship business and turn a profit in your first month. 

How to Start a Vending Machine Business