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.

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.

OK, in order to not become vending road kill, don’t believe anything the seller is telling you. Sure the vending machine route is making $40 per machine per location. Sure the seller is just looking to unload what may be the most profitable vending route ever in the history of vending. Of course, when you actually ask to see IRS tax filings proving their legitimacy, they won’t be able to provide it. Don’t believe any spread sheets or book keeping forms they may offer to provide, these can all be faked. This isn’t meant to imply that they are trying to rip you off or that they are lying but consider that they are selling an asset and trying to get the best price possible. You, as the buyer, are also trying to get the best price possible and more likely than not, the seller is overpricing the vending machine route.

How then can you determine what the route is worth? The single only way to determine a route value from a buyer’s point of view is to only place a value on the used vending machines being sold. Yes, the locations do have value, the good will of the business has value, and the age of the vending accounts also have value, but not for our buying purposes. We are essentially buying a business with unknown variables. We don’t know what the machines are actually making. We don’t know if the businesses where the used vending machines are located are happy with the prior vendor (the seller). We don’t know anything about this business except how many machines are being sold and this should be checked and verified. It is possible for a thoroughly unscrupulous person to sell someone else’s machines but usually these will be stolen from a location and not still in place.

When making an offer on the vending route, ask the seller if you can go on a servicing run with him to check out the state of the used vending machines. If a route is very large, you would most likely just do a head check to see that the machines exist. But it is best to watch the seller service a few machines to see how the business owners react to him and gauge the value of the locations. Even though we are not placing any value on the locations for our buying decision making, the locations can give you an overall feel for how much future work will be required to turn this route into a money maker for you.

Another thing to keep in mind when making an offer to buy is how many different brands of machines are on the route and what kind of quality are they. When building a route, obviously you want to grow fast and keep your expenses low and used machines are a great way to do just that. But once your vending machine business starts to become rather large, a variety of brands can become a liability. You will have less compatibility of parts for when things break down and buying replacement parts sometimes isn’t worth the money. With vending heads going for about $60.00 brand new, a new coin mechanism for $25.00 doesn’t seem practical. And believe me when I say,  used vending machines are going to break down. Another small thing to consider with multiple machines is the sheer volume of keys you will have to keep track of and organize. This may seem like a small consideration, but think about having separate keys for the top and sometimes separate keys for the back and multiply that by twenty. When you’re trying to zip through your route, organizing your keys is just one more thing to slow you down.

Lots of great deals are to be had on vending machine business routes. Craig’s List is a great source for both routes and used vending machines. Like I covered in the biz ops and scams section, lots of people get ripped off early in their vending careers and never fully recover. If you shop wisely, you may find vending gold. There are people who have bought neglected vending routes and upon servicing the route the first time have made the buying price back essentially making the purchase free. While I hope you have the good fortune to find such a deal, even if just heed my advice to only consider the value of the machines in the route being sold, you will avoid getting ripped off.

With a vending machine business easy to begin and operate, it is referred to as having a low barrier to entry. This translates into the fact that anyone can start a vending business. Tons of people with a few spare bucks get into vending every year. The lower the barrier to get into a field the more competition you will have to compete against. I’m not saying that you can’t make it in vending, just that you will have to be that more dedicated than the next guy.

Vending machine business opportunities (biz ops) are to be avoided. A big biz op scam these days seems to be energy pills or gel. There are many others out there, but energy seems very popular recently. For the dear price of about $15,000, a biz op will get you equipment, get you in businesses and offer to help you with your whole start up. Biz ops make grossly exaggerated profit claims. Vending is numbers game. In vending, it is all about the numbers – tons of machines churning out a small monthly profit to get ahead. After losing lots of money to a biz op scam, some become disillusioned and quit the business. Tons of unused machines are sold by these frustrated people.

If you have been duped by a biz op, your options are few, you can complain through the Justice Dept., the BBB, or get an attorney. That money will more than likely never be seen again. It’s good to be informed when starting any business. The people that are pushing biz ops and promoting vending as a way to make easy money are not to be trusted.

When starting out in bulk vending or full line vending, have a workable business plan before you quit your job. It is not my intention to deter you from the vending biz, but instead, I am hoping to give you information that will help you on your business path. Most single heads make seven bucks on average. This is an industry average, not a guarantee. Venders don’t always make seven dollars. Personally, my machines are averaging five dollars per head. As you can see, a double head machine making $14.00 per month is going to require a lot of machines to pay your mortgage.

Please be alert to the possibility of locator problems. Locators help you by making lots of phone calls to zip codes you provide to help you get your machines placed faster. Sometimes you can hire a person to drive around and place machines. To get a machine placed by a locator using a phone is about fifty bucks. I have no experience with an in person locator personally, but it is about the same price. To expand your business more efficiently, a locator can be a real asset. Locators vary in their placement options. Some promise a certain amount per machine, some do not. Despite what you may hear, excellent locators can be found, the problem is finding one. A good way to find a locator service is on forums that are dedicated to the vending business. Other people in the business can help you avoid getting ripped off by unreliable locators.

The vending machine business is not a get rich quick plan. Vending requires a lot of time and commitment to be successful just like every other business. A lot of folks that start vending business will fail, but this doesn’t mean vending isn’t a viable business. Too many people are really not up to the challenge of managing their own business. With vending, you can start without a lot of cash. All you have to do is get a couple vending machines located, service them for a short time and you’ll have a good indication of how things work. One of the great things about vending is that you can do it at your own pace while keeping your day job. A plan to grow your vending machine business, based on your experience will be infinitely better than the impossibly dreamy goals others may give as their results.