April 22, 2022

Why We Love Investing in Vending Machines

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But what you wouldn’t know, just by looking at him, is that Quinn creates $20k+ in revenue every single month from VENDING MACHINES. And after expenses, Quinn sees $9.7k+ in profit. 

And yes, all of this cash flow comes from that unassuming device that has probably fueled your impulse snack or soda buy a time or two. I couldn’t believe it either, at least at first, but then Quinn showed me the ropes. You can follow more stories like Quinn’s on our blog over at Unconventional Acquisitions

There’s a lot to unpack here, so let’s talk through why we think vending machines are such a great boring business investment:

  1. You don’t have to pay for where you put your machine 

You know how vending machines just sort of seem to appear out of thin air when you’re out and about? Maybe you just had your car serviced, are waiting in line at the DMV, or see one in the hallway for your yearly wellness exam at your doctor’s office. But look up, sometimes somewhere random, and there you’ll see it: the glow of a vending machine. 

Most people probably assume that the place of business where the machine is placed is ALSO the one responsible for owning and managing the machine, but surprise! It could be owned by someone else completely unrelated to the business — and even better? The rent is probably free. 

 Here’s the thing: most vending machine business owners don’t have to pay to place their vending machine on the property. Instead, the machine itself is considered a service, so the owner simply needs permission from the place of business to put it where they would like. 

Some of the most popular (and most profitable) locations for vending machines are places like low-income apartments, hotels, motels, assisted living spaces, and even hospital segments. 

  1. Vending machines don’t require a lot of hours each week

If you’re an investor looking to expand your portfolio with as little as ten hours of work a week (with the bulk of that work done from your laptop, except for when you’re doing restocking your vending machine inventory), vending machines might be for you. But as with all investments, there are some downsides to the trade, too. Here’s what to keep an eye on if you’re interested in getting into the vending machine game:

First off, you’re going to become best friends with the door greeter at your local Costco. Own it. Accept it. Such is the life of a vending machine operator. You may also find that until you get an inventory management software, you’ll be driving up to your vending machine to get an idea of what your stock levels look like in real-time.

One easy way to offset this dynamic is by finding a business partner who will do some of the inventory stock or Costco runs to help you cut down on your own time demand. And if you’re not ready to give up a percentage of your ownership, consider hiring an employee who can manage the inventory leg work and restocking for you every week.

  1. You can buy your snacks and soda in bulk to increase profit

    You probably already know that it’s cheaper to buy things in bulk, and the same is true for what items you stock in your vending machines. Get yourself a Costco membership and head there once or twice a month for sodas, chips, gum, candy, and other items you want to put in your machine.

    A box with 50 bags of potato chips typically runs at $20 at Costco (or about 40 cents per bag). Let’s say you sell that bag of chips at your vending machine for $1.50 per bag. That means you’re making $1.10 per bag. Not bad, but watch this…

    If a large snack machine can hold about 617 items, that means you’re seeing about $679 in straight profit in your pocket…and that’s if we’re just talking chips. But the margins on things like gum, candy, snack cakes, and other items are even higher. So please believe me when I say that buying in bulk equals profit in your pocket.

  2. You can get started with ~$2.1k cash

    Now it’s time to break down the costs of running a vending machine business, juuuuust in case you’re curious about starting your own. In general, you can expect a normal snack or soda vending machine to cost anywhere from $500 to $3000, depending on if the machine is new or gently used, and where you buy it from. 

BUT…a little insider secret here…some snack and soda brands, like Pepsi for example, will actually give you the vending machine for free, as long as you agree to only stock their brand of products. 

When it comes to the overall costs to get started, here’s what you can expect:

Vending machine: $1500

Credit card reader: $250

Local one-time move: $100

Product inventory: ~$250

Want more priced out boring business breakdowns, just like this one? Grab our course on buying small businesses and we’ll show the ropes.

Looking for community + step-by-step playbooks to help you actually make it happen? You need to be in our mastermind, like…yesterday. 

Yours Unconventionally,

Codie & Ryan

Co-founders – Unconventional Acquisitions

If you want to learn more about how to find and buy businesses, check out these articles👇

You can also register for the course here OR if you are serious about buying a small business, join our Mastermind.

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