You can find a lot of crazy misinformation out there about vending, but keep in mind that a lot of online sources have a vested interest in selling the myth of vending as a gold mine. They make it sound as easy as pie because they’re trying to suck you into their “opportunity”. If you’re to believe what they’re trying to sell, it’s as simple as slapping a few machines on location and the money just rolls right in. Yeah, I’m here to tell you that this is a total fantasy.
Don’t get me wrong, I love vending, I think it’s a great business. However, it’s far from easy. While just about anyone can do vending, this doesn’t mean that everyone can do it well or be successful at it. Because vending is so easy to get into, quite a lot of people jump in without being fully aware of some of the potential pitfalls, this makes for a high failure rate. And don’t kid yourself; the failure rate in vending is much higher than with more traditional businesses with a higher barrier of entry.
Separating Fact From Fiction
Don’t for one minute think that you can simply fill a vending machine with gumballs and then come back a month later and collect $200, this is complete fantasy. I love it when I read advertising saying that a vending machine can hold $300 dollars in quarters – like that’s a major selling feature. The odds that you’ll need a machine that can hold $300 in quarters are about one in a million. What these ads fail to tell you is that the industry average is only about $12 gross profit per head or about $20 a month net for the average double head machines. Based on my own experiences in vending, I’ve found this average to be a little on the high side, I have a few making a bit more and a bunch making a lot less, so my average is actually closer to about $15 net a month per double head machine.
Some Real World Numbers
Let’s do some quick math on making a full time living from vending. I’m going to use figures on the lower side of the equation, because when just starting out, this is more realistic. Eventually, with time, you can slowly start to raise your average, but this process takes time, so I’m going to use $12 a month as our beginning monthly net earnings per machine. This means that 100 vending machines will make you about $1,200 a month in profits. Not a whole lot of people in the US would consider $1,200 a month a living wage, so let’s up our example route up to 400 machines making $4,800. I think $4,800 is a little closer to a living wage. Now consider that these 400 machines will need to be located and serviced on a regular schedule, this is no easy task.
While 400 machines can seem a bit overwhelming when you’re just starting out, it’s not unusual for individual venders to have routes with 600 or more vending machines. The good thing about vending is that it’s a very time efficient business, so this is not outside the realm of possibility. Figure that servicing machines takes only about 15 – 20 minutes per location; this includes the driving time as well as a general servicing including filling the machine, collecting the quarters and cleaning the machines.
This means that 400 machines will take about 100 hours to service. That’s not too bad a return on your time investment considering that this means that your 100 hours of work or 2 1/2 weeks work of work will make you a full time income of $4,800.
But servicing isn’t the only time investment for your vending route, I always recommend adding another 25% on top of the 100 hours for other business tasks such as locating, shopping for product, cleaning and assembling machines, book keeping and all the other little things that suck up time. Even when we add in this extra 25%, this brings our time investment to earn $4,800 up to 125 hours, still pretty attractive. But it’s even better than that, most vending machines only need to be services every 45 to 60 days, so this means our 125 hour time investment is really only 125 hours every 2 months or 63 hours every month. This means that to earn $4,800 would require just a little over 1 1/2 week, much better than most other traditional jobs or businesses.
By now, the numbers I’ve laid out may have you thinking that vending sounds pretty great. In fact, you may be wondering why so many people are dropping out if it’s this great. In a nut shell, most people don’t realize how difficult it is to find 400 profitable locations! And don’t for one minute think that when you’re just starting out that you’ll make that national average of $12 gross a head. Fat chance! You may have to move machines around several times to get your average up. And we’re talking about locating 400 machines! And buying 400 machines! This is a crazy amount of work. And money! The process of building up a route is so difficult and emotionally draining that most people don’t make it out of the building phase. Between locating machines, losing locations and changing locations you’ll spend a lot of time feeling like you’re just treading water. Most people don’t have the intestinal fortitude to work this hard while reinvesting all their profits and feeling like they’re not making any progress.
Only the people that are prepared to delay gratification and are willing to essentially work for free while reinvesting all their profits back into the business will survive, so keep your expectations firmly grounded and be prepared to dig in hard.