Every minute $85,000 is inserted into vending machines around the United States. These machines don’t sleep and don’t take breaks. They sell items without the cost of human intervention, and as long as these vending units are placed in the right location and with the right products, consumers will continue to spend money.
A vending machine company is part of a 45-billion dollar industry. One of the reasons for the significant profits of this business is the low overhead. A vending franchise owner receives all of his/her proceeds in cash, and unless the machines take credit or debit transactions, all sales are final at the point of sale. So there is very little in the way of returned merchandise.
The biggest recurring expense for a vending machines business is the cost of maintaining products (beverages and snacks). Owners must also develop routes to collect revenue and update inventories in the units. After inventory costs and minimal overhead costs, the rest is pure profit.
Getting into the vending machine business does require a capital investment up front. However, most potential investors don’t realize that all or a large portion of the costs to purchase the vending equipment is tax deductible. Also, the payback period on these machines is very short compared to other investments.
The business model for this vending industry is very simple: install the machines, keep them stocked and collect revenue. Many franchise owners run their vending company as a part-time or family business, which provides well for their needs.
An important point to remember for first-time owners is the quality of the vending machine that is selected for startup. A lot of competing machines exist on the market. Some of these machines have been around for decades, while others are technologically advanced machines that offer the vendor many new features to help please potential customers. Purchasing units that are reliable, feature-rich and easy to use are all important requirements when kicking off a new vending business.