Your vending machines will be located in a jurisdiction that collects sales tax, so you need to go to the appropriate city or town hall to register for a license. For simplicity, choose just one city or county in which to operate your vending machine business. As you get the hang of it, you can expand into neighboring municipalities. The license and permits you need will vary slightly based on local laws.
To show inspectors that your vending machine is legal, you'll be issued with a small sticker to place on the machine. As you make your business plan, you need to consider all the different types of vending machines and how you will make yours successful. The good news about vending machines is that they tend to market themselves by their mere presence. However, you still need to make some smart decisions.
For example, if you've noticed an increasing demand for healthy vending machines, maybe this is where you'd like to focus your energy. Or, perhaps you have a very unique idea for a vending machine, such as a DVD, video game or book vending machine. Even toys can be vended. But of course, there's also snack food, candy and cold drink vending machines. Decide what type of vending machine you want, exactly what you'll stock it with, how much it costs to purchase the stock and you much you'll charge in order to gain a profit.
Don't forget to include a start-up budget for buying a vending machine in your financial plan. Prepare to spend at least a few thousand dollars for a basic snack or soda vending machine. You can look for used machines on sites like Craigslist, eBay, Facebook Marketplace or specialty websites like UsedVending. Brand new models can be purchased online as well through a quick Google search.
There may also be a local vending supplier in your area. Take a look at vending machine profit statistics and make some calculations based on your financial plan to understand how long it might take for the vending machine to pay for itself and truly begin to give you a profit. This can affect your budget for buying a vending machine.
Have a transportation plan in place for storing and moving this heavy piece of equipment. At the very least, you'll want a dolly, some strong individuals and a truck and flat-bed trailer to get it placed. But before you dive in and make this purchase, it's wise to have a business already lined up to host your vending machine.
Create a strategy so that you seek out high-traffic areas populated by people who are likely hungry or thirsty and willing to shell out some cash for convenient food. Good ideas include contracting out with sporting venues and arenas, schools, offices, children's camps and even gyms. Be prepared to explain to each business that your vending machine will add value to their operation. You'll likely need to pay a "rental fee" to the company so that they can benefit monetarily.
But you can also explain how the company can benefit from having customers or employees who aren't hungry or thirsty thanks to your machine. For example, everyone focuses better when they have a snack, and a vending machine is the perfect way to guarantee a quick and easy bite to eat. Once you identify businesses to approach, try to approach them in person. Set up a time to meet with the office manager and have plenty of documentation ready to go to show that you're serious.
Be prepared to leave some promotional materials that clearly outline the benefits to the host company in case they need to mull over your proposal, and don't be shy about following up. Once you have a vending machine placed in a business, you need to regularly check on it. You'll make the host company happy by keeping it stocked. Luckily, finding your vending machine can be as simple as an online search. To get an idea of the different vending machine offerings and price points out there, search both locally and from national suppliers. You should also consider the cost of inventory when looking at vending machine prices.
To find the vending machine of your dreams, start your search with these three types of sellers:. Try not to be too tempted by these special features, though, since they can become costly.
Choose the vending machine that best fits the products you want to offer, and what you can afford at the moment. Next, you have to stock it with inventory. Product selection is an excellent opportunity to boost sales. Rather than choosing to stock items based on wider food and beverage trends, pay attention to local, site-specific needs. If you choose to provide combined food and beverage services in your vending machine business, drinks will make up most of your sales.
Drink size and shapes will affect your range of machine choices, so if you feel strongly about selling cartons or irregularly shaped products, try to find a machine with adjustable product sizing.
If you need a loan to purchase your vending machine, consider these two options:. As you can guess based on their name, repayment terms for short-term loans are considerably shorter than their long-term counterparts—usually 18 months or fewer.
And interest rates are a bit higher than longer-term loans. For those reasons, though, short-term loans are generally easier to qualify for than long-term loans. But if you need a little help, you can shoot for an equipment financing loan. The terms of these loans depend on the value of your equipment, which also acts as collateral in case you default on your loan payments.
Cared for properly, vending machines can last upwards of 10 years, which might help assure lenders. In addition to your own financial information and business plan , you will need equipment quotes for the machine s you plan to purchase if you choose to apply for an equipment loan. Additionally, if you need capital to purchase inventory, you may want to consider inventory financing. See Your Business Loan Options. Depending on the technology in your machine, your vending equipment may come pre-programmed with management software, which you can use to streamline operations, record inventory, and track revenue.
VMS software allows you to remotely manage your vending machines from an internet-enabled device. Most VMS systems provide real-time inventory updates and reporting tools. To make sure your vending machine is optimized for your customers, you just need to follow a few best practices. Like many location-based businesses, vending operators are often dependent on word-of-mouth referrals and in-person connections.
Most importantly, ensure that your vending machines are stocked and functioning on a weekly or biweekly basis. You can also consider providing an number for service requests and comments, which is a great way to get useful feedback. A full-size vending machine might require you to collect money weekly, which is important to keep in mind when determining how much time you can realistically spend traveling to locations.
In addition to the time it takes to purchase inventory, visit locations, and restock, operating a vending machine business requires you to spend time researching trends in sales, new products or locations, and talking to peers. The typical service cycle for bulk vending—think non-perishable candy or stickers—is between four to eight weeks. The vending machine business drives billions of dollars globally each year. Give us a call.
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About Latest Posts. Margaret Spencer Contributing Writer at Fundera. Margaret Spencer writes about small business finance and entrepreneurship. She is interested in financial empowerment for small business owners across industries, and passionate about sharing insights on accessibility and communication to help entrepreneurs grow.
Editorial Note: Fundera exists to help you make better business decisions. The opinions, analyses, reviews, or recommendations in this article are those of our editorial team alone. How to Start a Vending Machine Business in 6 Steps Consider all of your vending machine options: This includes food and drink machines, bulk vending, and specialty vending. Find the right location for your vending machines: Consider locations where you feel motivated to use a vending machine.
Then work out an agreement with the proprietor. Find your vending machine: Vending machine sellers include manufacturers and wholesalers, secondary market retailers, and online resellers.