One of the things that make the vending machine business so attractive is the very same thing that makes hard. It’s a business with a low barrier of entry which basically means anyone with $100 and a dream can start a vending business. This in turn means lots of competition. Does this mean you can’t compete and make a living at it? No, but it does mean you’ll have to work smarter and harder than your competition.

Vending is not a get rich quick scheme. You can make a decent living by growing your vending machine business slowly over several years or investing a large amount of money upfront to get started, but whichever route you choose it will not be easy. This does not mean it can’t be done, but I warn you to have realistic goals and not believe the hype that some people are selling. I’ll cover more of the hype in the biz op section of this website but suffice it to say that if it sounds too good to be true, then it probably is.

The vending machine business allows you to be your own boss, set your own hours, and schedule your day however you like. This can be a blessing or a curse depending on your temperament and abilities. Not everyone is cut out to be their own boss. Some people are lazy, some are disorganized, and some don’t play well with others, only you can judge for yourself whether you have the personality traits that are suited to an entrepreneurial endeavor. At the very least, you will need to have good time management skills, be self motivated, have general book keeping skills, and some limited people skills. If you have this and a dash of common sense, don’t let me talk you out of anything. But if you don’t see yourself in this description, proceed at your own peril.

With vending machines, your machines are always working even when you’re not. This is generally considered a passive income stream and is one avenue to building long term wealth and security.  At some point in the future you may want to hire someone to service your machines and this is an option that can further increase your revenue streams.

Vending is a numbers game; this is very true in bulk vending, but less so in full service vending. By this I mean you will need a lot of bulk vending machines to make any decent money. What’s a lot of bulk vending machines and what is decent money? Consider that an average bulk vending machine makes $7. per month per head, so a triple machine is expected to make $21 per month. Mind you, this is gross not net. Add in anywhere from 20%-35% cost of goods and you get a general ball park. And this is given as an industry standard for bulk, not everyone will achieve this goal. My experience is that $5. per head is more likely.

I’ve about covered the basics on the pros and cons of the vending machine business. I’ll be adding more topics and information as I develop this website. I’ll be covering biz op scams, full line vs. bulk, how to buy an established route, and whether to go with new or used equipment. Plus anything else I think might be helpful.

If you’re thinking of starting up your own vending business, make to read the articles on buying used vending machines, buying an existing vending route, coffee vending, coin operated machines and getting your vending machines on location.

A vending business is an excellent option for people who are looking for a small home based business. A vending business can be started quite easily with a minimum of hassle; there are no franchise fees, no need to rent a property and no need to hire an employee. In fact, it’s so easy that some people even get their children involved or even set up a route specifically for their kid to run. It’s a great way to teach kids about responsibility, finances and the fun of being entrepreneurial.

The vending business is comprised primarily of bulk vending and full line vending.

Bulk Vending

Bulk vending is selling unwrapped “bulk” candy out of machines. Some of the more popular candies that are sold out of bulk machines are: peanut M&Ms, regular M&Ms, Mike & Ikes, Hot Tamales, peanuts, trail mix, Reese’s Pieces, gumballs and Skittles. Small children’s toys such as temporary tattoos, jewelry and key rings are also considered a part of bulk vending.

Typically the vending machines used in bulk vending are comprised of heads or separate compartments for each different type of product. Bulk machines are usually mechanically simple; they usually don’t have electric features such as bill/change acceptors or refrigeration. These coin operated machines are designed with a simple spring mechanism that returns to its original position once a coin is inserted and the product is dispensed.

Pros

• Machines are inexpensive
• Machines are easy to work on
• No special skills are needed
• You don’t need any special equipment like a new vehicle
• You get to be your own boss
• You have the freedom to set your own schedule
• Machines can be moved by one person

Cons

• Fully loaded machines are heavy
• Good locations are hard to find
• You need a lot of locations (400+) in order to make a decent living
• It takes a long time to get a route established
• There is a lot of competition
• Some people consider vending a less desirable or respectable job
• The machines get broken and stolen

Full Line Vending

This part of the vending business is the selling of packaged goods out of machines with packaged snacks and soda being the largest portion of this business. Other items such as cigarettes, condoms, feminine hygiene products, ATMS, and Redbox movie vending are all variations of full line vending.

The machines used in full line vending are more sophisticated than those used in bulk vending, plus they are a lot larger. These machines commonly require refrigeration and they also have electronic bill changers so electricity is usually required. There are some simple full line machines such as those used in laundry mats or bathrooms that use a simple pull dispenser, but most full line machines are more advanced.

Pros

• Although the machines aren’t as cheap as bulk machines, they are still cheaper than starting a lot of other more traditional small businesses
• You get to be your own boss
• You get to set your own schedule
• You need a lot less locations than with bulk to make a decent living
• Less competitive than bulk

Cons

• The machines are very heavy
• In order to move these machines you will most likely have to hire someone, have someone help you or be very strong and have a truck with a lift gate
• Even though it’s less competitive than bulk, it’s still hard to get excellent locations
• Machines are complicated; it would definitely be beneficial to know how to do electrical work and refrigeration
• The machines have to be serviced more often than bulk machines

Conclusion

Some people like the flexibility of moving machines on their own, while others prefer not having to service so many different locations. There are pros and cons to both sides of the vending business, so which side of the vending machine business you pursue is simply a personal choice.

Like most everyone starting out, I read everything I could about vending before starting out. I joined a chat group and found a lot of excellent free information available by reading about other people’s experiences in vending, but eventually you have to learn some things the hard way. Or maybe not the hard way, but by learning from your own experiences.

Why Triple Head Aren’t the Best Choice

So, now that I’ve been in business for a couple of years I can say unequivocally that double headed machines are the way I’m taking my route. Initially I started with triples, the kind that sells 3 different products but has one lid on top. I quickly found out that triples are too big for a lot of locations, it sounded like a good idea when I was starting out. As a newbie I thought more selections equaled more money, but it actually worked out to be just the opposite. I ended up having a lot of unnecessary product waste. That’s not to say some locations can’t handle a triple, but a location would need to be very busy to make a triple worthwhile. I see some of my locations that have the 6 or 8 U Turns and this is just amazing to me. If my triple has candy going bad, I have to assume that they are either serving up stale bad product or having a lot of product waste. Another problem with this type of vending machine is that they offer you no flexibility.

Why Double Heads Are the Way to Go

So why am I moving to the doubles? A couple reasons. One, I think they make the product look better, the product can be seen 360 degrees while in the triple it can only be seen from the front. I recently traded out a couple of my triples for doubles and my sales doubled, when my profits double, I immediately start wondering why. One of these locations did have a rundown triple so this may have kept sales down, so I’m not sure if this can be 100% attributed to the double machines, but it’s something I’m going to be toying with in the future.

Another great thing about these machines is that they can be configured into any type of machine you need. You can put up to 3 separate heads on a single stand, make racks, or use them as singles or doubles.

My Comparison of Northwestern 60s and Oaks

So far I’ve tried both the Northwestern 60 and the Oaks. I bought the Northwestern 60s new from Sam’s Club; currently they’re going for $61.02 a head. Once you add in two heads, a stand and the plate, a double head costs about $170 from Sam’s. If you shop around you can find plates and stands cheaper, so you can knock about $20 off of this price.

I bought my Oaks used off of Craig’s list for $50 each double head. Each machine was also fully assembled, so this saved me a lot of additional work.

Well, these two brands are considered among the best in the business, so either one is an excellent choice, but I guess I like the Northwestern 60s the best. For one thing the Northwestern is a great looking machine, the paint is glossier and the front is beveled silver so that it really pops, but without a doubt the best thing about these machines is how easy they are to service. Honestly it’s like other machine designers never actually put any thought at all into how the machine will actually be serviced. With the Northwestern, you pick up the head; twist it a couple degrees and it easily rests on the base allowing you to easily scoop out the coins. The Oak is a fine looking machines and definitely of excellent quality but the servicing is a nightmare. You have to juggle the head in one hand while you try to dig the coins out or you have to remove the head entirely to get to the cash. The one thing I do prefer in the Oak over the Northwestern is that the Oak has a smaller head; this allows me to fill it up more so that it looks better but still keeps the profit loss to a minimum.

Obviously at $50 a head I’d by a couple hundred more of the Oak, but I’ll keep shopping around for the cheapest used vending machines I can find. The Northwestern is well worth the money and since I’m in the vending machine business for the long haul, I don’t mind making the investment.

There’s almost an unlimited variety of coin operated vending machines available in the market today. The first historical evidence of a coin operated machine is found in works of a 1^st century engineer and mathematician called Hero of Alexandria, but it’s not until the Industrial Age that they really came into wide spread use. During the early 1880s coin operated machines were introduced in London England to sell post cards. In the United States, the first vending machines sold gum in train stations, these machines were manufactured by Thomas Adams Gum Company. These machines eventually started becoming more advanced in 1897 when small moving figures were added to the machines, these figures would move around when gum was dispensed from the machines; this advance was made by the Pulver Manufacturing Company. These early advances spawned pinball machines and slot machines.  

The first coin operated machine was made to dispense holy water, but today’s machines can vend almost anything. The potential in vending is almost unlimited. Vending in the United States in broadly divided between two main types of vending; bulk vending and full line vending. Bulk vending is selling loose candy, nuts, toys and gum in small coin operated machines consisting of single or multiple heads. These heads can be arranged in a multitude of configuration on stands or what is referred to as racks. Racks are able to hold a large number of multiple heads, while stands usually only hold 1 – 3 heads. Full line vending is selling packaged snacks and drinks such as candy bars, soda, and chips. Full line machines are also coin operated machines but they are a lot more sophisticated, they can have refrigeration, bill changers, lighted panels, and fancy electronics. Full line machines are a lot larger than bulk vending machines. Coin operated machines are typically run as a route by small operators or individuals who will usually have machines in several different locations. 

Japan has a lot more variety in the coin operated machines than we currently have in the United States. Vending machines are prolific throughout Japan, in large cities they can be found on every corner. Not only do they have a lot more machines, but it seems that consumers in Japan are willing to buy almost anything out of a machines. Some of the strange offerings out of Japan include coin operated machines selling umbrellas, electronics, fresh flowers, eggs, porn, electronic charging stations, vegetables, bags of rice, hot ramen noodles, shoes, French fries and fried prawns.

Here in the US we’re beginning to see more and more products being sold out of machines but we have a long way to go before we’ll even come close to matching Japan. We have all the standard offerings of snacks, condoms, ATMs, feminine hygiene products, gumballs. Cigarettes were one of the most commonly vended products but concerns about underage buyers has caused this to dramatically slow down. The Stand Hotels, a small upscale hotel chain, has recently introduced coin operated machines selling Quicksilver board shorts and bikinis to guests. IPod vending machines are making the rounds at hotels, airports and Macy’s Department Stores. These newer machines are a big step away from traditional coin operated machines that typically vend inexpensive items. It will be interesting to see how readily consumers take to machines that vend electronic devices with prices that can exceed $300.00. I’m sure these machines take credit cards as well as debit cards but I’m wondering how the return policy or customer service issues are handled. Clearly this is only a small hindrance, because these machines are really starting to take off.

Although I think coin operated machines selling candy to kids will always be around, the US will gradually begin to see a rise in machines selling a greater variety of products at an ever increasing price point. Eventually US consumers will become more comfortable with machines selling high end merchandise. Truly the potential of vending is almost unlimited.

Read all about the various aspects of the vending machine business, check out the articles on Getting Your Vending Machines on Location, Single, Double, Triple – What Is the Best Machine?

I should probably start with a general definition for people that are entirely new to vending. Full line vending consists of generally larger machines which vend a variety of products including soda, snacks, sandwiches, condoms, and cigarettes. This is by no means a full list as I could probably fill a sheet with things that could be considered full line vending.
 
Bulk vending machines are usually much smaller machines consisting of one, two, or three “heads” or compartments for loose (“bulk”) candy.
This includes gumballs, M&M’s, peanuts and even capsules containing tattoos, key rings, and other such kid toys.

For the sake of this article I’m not including vending amusements which are crane machines, fortune teller machines, and kid’s rides like those found outside of big box stores. It’s been my experience that most people don’t specialize in vending amusements but rather roll it into their primary vending business.

Now that we know what we’re discussing here’s a general overview.

Full Line Pros: Since the machines are more expensive, there is a little less competition. You can have a lot less locations and machines for the same amount of profit.

Full Line Cons: With full line vending the machines are much (MUCH) heavier and more difficult to transport. They usually require electricity to operate so that may limit where you can put the machine. The machines are big so it’s a little bit more of a commitment to get one placed. If a manager OK’s a placement and then the owner comes in the next day and overrides his decision you are not going to be happy. More full line vending companies have placement contracts then do bulk vendors; this contract usually covers what percentage of your profits you give to the business owner. Full line machines are more expensive so starting out is going to cost more. Full line machines typically need to be serviced more frequently, once a week or every other week depending on volume. Since the machines are both mechanical and electrical they are more difficult to repair.

Bulk Vending Pros:  Compared to the full line machines, the bulk machines are virtually light weight, plus they can fit in a car. No electricity is needed for most bulk machines. (There are some exceptions to the electricity rule such as the really fancy lighted, spiral maze gumball machines that you may have seen around.) The equipment is cheap and easy to repair. The machines are small and can be placed virtually anywhere. It’s less of a “perceived risk” or “commitment” to the business owner to place a very small machine rather than a bigger one. The machines need to be serviced a lot less than full line machines. A typical cycle for servicing is 30 – 90 days, mine are on 45 – 60 day cycles.

Full Line Cons: Because the equipment is cheaper you will have much more competition. To make a decent living you need LOTS of machines. Although the machines are light compared to full line vending, they are not exactly light, about 60 lbs. when full of candy. Spend a day moving and placing these all day and you’ll feel it.  Machines can be very easily stolen.

As I read this, it seems I listed quite a few more cons for full line vending than bulk vending. Although this was not my intent, perhaps I am biased as I chose to do bulk vending myself. My own personal reasons for choosing bulk were primarily based on transporting the machines and not feeling like I have the ability required to work on the machines. If you choose to go with the full line vending, it’s a valid choice just not one that I thought was right for me. And also there is no hard and fast rule that says you can’t do both full line and bulk candy. It does seem that people tend to specialize in one or the other, but you can pretty much do what you want, as it is your business.

History of the Vending Machine

The vending machine has been around for hundreds of years but it wasn’t until the 1880s that they came into widespread use. According to historical accounts the first vending machine was written about in works by Hero of Alexandria and was used to dispense holy water, it used a simple weighted mechanism that reset after each use. Amazingly, Hero designed his machine during the first-century but it wasn’t until the Industrial Age that vending machines came into more widespread usage. Two of the first “modern” commercial uses were selling post cards in the early 1880s in London and gum in train stations in the US. The Pulver Manufacturing Company essentially revolutionized vending in 1897 when they came up with the idea of adding moving figures to the machines to further entice customers to spend their coins; these automated machines eventually lead to the development of slot machines and pinball machines.

Modern Vending Machine Usage

Today the modern vending machine is capable of vending almost anything. In the US, the vending market is broken down broadly into 2 main categories: bulk vending and full line vending.

Bulk Vending Machine

The modern day bulk vending machine is not that far removed from the vending machines developed hundreds of years ago. These machines sell “bulk” products; this simply means loose candy or toys that are typically loose and unwrapped. Some of the more popular bulk products that are sold include nuts, M&Ms, Mike and Ikes, Hot Tamales, gumballs, and small toys like tattoos, key rings and jewelry.

Bulk vending machines are usually mechanically simple; they work with a spring type mechanism. A coin is inserted and the handle turned, the coin drops into the machine, product drops out a shoot and the handle springs back into its original position so that it can be used again. Most of these machines are made up of individual heads on separate stands or racks allowing the route owner to stock several different types of product at the same time.

Some of these bulk machines are more sophisticated with flashing lights and moveable parts that activate when a coin is dropped, but most are simple and require no electricity or refrigeration.

Full Line Vending Machine

These machines are usually much bigger than bulk machines and usually require electricity and sometimes refrigeration. The term full line indicates the selling of packaged chips, crackers, candy bars, soda, water and other packaged items for resale. These machines are becoming increasingly more sophisticated with bill changers, credit card accepters and temperature controls.

Although these are the two most common categories, vending is becoming increasing more advanced. 

Other Types of Vending

Amusement Vending

This category of vending includes children’s rides like those found outside major retailers, pinball machines, video games, crane machines and other game type machines.

Miscellaneous

There are other categories of vending machines that don’t clearly fall into either of these broader categories, but they are usually categorized under full line vending. Products that can be vended out of a vending machine that fall in this miscellaneous category include condoms, laundry detergent, cigarettes, electronics and buss tickets.

Unusual Japanese Vending Machine Offerings

Japan is a lot more advanced with their vending machine products. Not only are machines located on virtually every corner, but the products they vend are a lot more usual that the typical offerings in the US.

Here are some of the things currently being vended in Japan:

• Porn
• Alcohol
• Used school girl panties (these were made illegal, but apparently can still be found)
• Umbrellas
• Hot ramen noodles
• Bags of rice
• Charging stations for electronic devices
• Shoes
• Deep fried prawns
• Fresh flowers
• Eggs
• Fresh vegetables

Future of the Vending Machine

At this point the only thing holding the vending business back is public acceptance and imagination. In 2009 a small boutique hotel chain in the US, The Standard Hotel, partnered with surf wear company Quicksilver to sell retro swimwear to their hotel guests, the vending machine is selling board shorts and bikinis for about $75 apiece. The suits being vended are retro designs from the 1970s and 1980s but with more modern fits and fabrics. When vending goes this mainstream and this hip, you can easily see the long term potential of the vending machine.

Some of the newer vending machine offerings include machines selling iPods, cell phones and electronic devices. Machines selling ballet flat slippers have popped up recently in night clubs allowing women to get out of their high heels after a night of dancing. Vending machines have come a long way from when they were first introduced, but not much has changed really. The vending machine offers the customer cheap products in convenient locations while allowing the vending machine owner to vend products while keeping overhead low by not having to have a store front or employees.

The vending business is broken down into two main categories: bulk vending and full line vending. Both types of vending are usually pursued as small home based businesses and they are usually run by individuals. Some people may have a partner or run a vending route as a family business, but with bulk and full line vending; usually these are small businesses and not corporate run operations. There are a wide range of vending machines available, but generally anything that doesn’t qualify as bulk is classified as full line. Some types of vending machines that are more typically run by corporations include ATMs and Red Box movie vending.

The main beauty of the vending business is that it is one of the few businesses that is within the reach of most people. Most business start ups require a large initial investment and require the new business owner to fully commit their time and energy to the new business in order to get it off the ground. This type of commitment usually creates a substantial risk because not only does it require investing a lot of money, but you will usually need to give up your job in order to start your own business. This is not the case with running a vending business, the machines are fairly inexpensive and it’s easy to start a route part time while still keeping your day job.

Bulk Vending

Bulk vending is the selling of “bulk” products out of machines to consumers. The term “bulk” simply means the products aren’t wrapped; the customer just gets a handful of product delivered right into their hand. Bulk products include M&Ms, Mike&Ikes, nuts, trail mix, gumballs, Hot Tamales, Reeses Pieces, and Skittles. Also included in bulk vending is small children’s toys such as temporary tattoos, jewelry, key chains and other small novelties.

The vending machines used in bulk vending are very mechanically simple machines with a simple spring back mechanism. Most of these vending machines don’t require electricity and are easy to work on.

Pros

• The machines are very inexpensive. Brand new they cost only $125 – $300 depending on the amount of heads.
• Simple machines.
• Easy to get started.
• You can start part time.
• It takes very little money to start a small route.
• No big vehicle needed.
• Machines can be broken down for transporting.

Cons

• It’s a very competitive business.
• It’s hard to find profitable locations.
• When fully loaded, the machines can be heavy.
• You need a lot of machines in order to make a full time income. Each machine only averages $7 a head.
• Most people never get to the point where they make decent money. The failure rate is high.
• Establishing a large route takes time and money, so if this is your goal, you may need to stay at your job for quite awhile while you do vending part time.
• Some people consider vending demeaning or trivial work.

Full Line Vending

Full line vending is the selling of packaged snacks and drinks out of vending machines, products include chips, crackers, candy bars, soda, ice tea and water. There are other categories of bulk vending such as feminine hygiene products, cigarettes and laundry products, but snack and drink vending is the biggest part of full line vending.

The vending machines used in full line vending are usually much more complicated than those used in bulk vending, they usually require electricity, and some also have bill changers and refrigeration.

Pros

• Compared to other businesses, it’s still fairly inexpensive to get started. You may be able to find decent used vending machines for $1,000 – $2,000, while brand new ones are much more expensive.
• Full line vending machines make more per location than bulk locations.
• Compared to bulk vending, you will need less machines and locations in order to make a full time income.
• Servicing is easier because you will have fewer locations.
• A full line route can be run part time while keeping your full time job.

Cons

• The machines are very large and heavy; most people will require help moving them.
• Although it’s less competitive than bulk vending, it’s still very competitive.
• Since the machines require electricity, plus some have bill changers and refrigeration, this makes them harder to work on.
• It’s hard to get profitable locations.