8 Easy Steps to Start a Vending Machine Business

Starting a vending machine business is the perfect side business. But there's more to this business than simply buying a vending machine and setting it up somewhere.

Evaluate product options for sale, find suitable locations, determine investment and profit margins, and much more. There are many intermediate steps to ensure the success of your slot machine business.

Today we will help you understand how to start a vending machine business and set yourself up for success.

Why it's worth starting a vending machine business

The store makes money by selling snacks, drinks, sandwiches, toiletries, toys, and other types of merchandise to customers through vending machines.

Vending machines appeal to many people. After all, we all get hungry, thirsty, and want toys at some point. This makes vending machines universally appealing and broadens the target market.

The markup is also higher here. For example, you can sell 2-5 cent gumballs for 25 cents or 50 cents each. Snacks and sodas can generate profits of about $1 or more per sale.

Sure, you probably won't be a millionaire anytime soon, but you can grow your business to the extent that it replaces the income you get from your full-time job.

The biggest advantage is that you can operate your vending machine business flexibly.

You can set your own working hours and are very flexible. Plus, you can make a good amount of money doing it.

The Investment Needed to Start a Vending Machine Business

Most of the cost of starting a vending machine business comes from the vending machine itself and the inventory items. Starting at just $2,000, you can get a basic vending machine. This is enough to get your business up and running.

A basic vending machine that sells four gumballs costs just a few hundred dollars. But generally vending machines cost him $3,000 to $10,000 depending on size and features. For example, you may need a card that accepts credit and debit cards. Snack and drink vending apps , on the other hand, range in price from $1,500 to $8,500.

If you want to keep costs down, consider buying a used or refurbished machine in the $1,200 to $3,000 price range. Even better if you know how to fix the machine or hire someone to do it reasonably priced. Then you don't have to worry about the warranty.

Another option is to contract with a supplier and get a free machine. Some suppliers supply machines and service if you agree to buy all consumables from them.

Additionally, vending machine accessories are most often purchased wholesale, so they don't cost much. Chewing gum and small toys are very cheap at wholesale prices, snacks and sodas are more expensive but still very affordable.

You will also have to pay a small fee to set up your business, but that fee varies from state to state. For more information, check his state government website or contact an attorney.

8 Steps to Starting a Vending Machine Business

Let's get down to business! Here is a step-by-step guide to starting a vending machine business in the US.

Step 1: Determine the type of vending machine you need

Gone are the days when vending machines were rusty stuff that only held dollar bills and everything looked like it had expired. There are now a wide range of options.

• Food and Beverage Vending Machines: Most of the vending machines you see are food and beverage vending machines that offer sodas and snacks. If you plan to purchase more than one machine and place them in different locations, consider storing different items in each depending on traffic conditions in the area.
• Bulk Vending Machines: Small vending machines in front of restaurants and grocery stores. Large vending machines contain toys, rubber balls, chewing gum, and more. These products are generally the cheapest and, because they are manually operated, have the lowest running costs. However, when set up in the right environment, these machines can be an excellent source of passive income and are perfect for budding entrepreneurs.
• Specialty Vending Machines: Specialty Vending Machines are new-age machines that offer premium products that are completely different from your typical standard product. We can serve just about anything from electronics to hot drinks to ice cream. Also, depending on the type of specialty products that are loaded onto these machines, they can earn significantly higher incomes than serving standard food and beverages. However, a higher markup also means fewer people using the machine.

Regardless of which slot type you choose, your main priority should be tailoring your slot offering to your target audience.

Step 2: Find the right location for your machine

If there's anything as important as what you sell in your vending machine, it's the location. Strategic placement is critical to the success of your vending machine business.

Do your research and think critically about your target audience. What are their requirements and what type of audience will the venue attract? For example, if you have a food vending machine next to your local gym, you might want to offer items that add value to gym goers, such as protein bars, electrolyte-enriched drinks, and ready-made shakes.

On the other hand, if your local laundromat has specialized machines, individual packages of fabric softener and detergent make more sense.

Here’s a list of potential locations for your vending machines:

• Bus stations
• Manufacturing facilities
• Apartment complexes
• Grocery stores
• Malls and shopping centers
• Train stations
• Hotels and motels
• Schools
• Universities
• Hospitals and health centers
• Laundromats
• Airports

Vending machines cannot be placed anywhere you like. You will need to discuss this with the property owner or manager. They may not want to compete because they don't want to give you floor space or have their own vending machine. Once you have identified a few locations where you would like to install the machine, start making phone calls to see if the location is suitable for installing the machine on your premises.

Note that the site is likely owned by someone else, so you will also have to pay a fee to use the site. This is typically 10-25% of total sales, but can always be negotiated before signing the contract.

Step 3: Specify your company name

A company name is one of the most important brand values. This allows customers to differentiate themselves from their competitors. Here are some tips to help you finalize your business name decision.

• Keep it simple and catchy
• Be creative?
• Be original and unique
• Ensure it’s easy to remember

Step 4: Finalize Your Business Structure

Choosing a corporate structure has legal and tax implications. This also affects our overall efforts to comply with regulations and maintain good relations with the state. You can register your company in one of the following legal forms:

• Sole proprietorship
• General partnership
• Limited liability company (LLC)
• Corporation

If you choose to become an LLC, S Corporation, or C Corporation, you may need to appoint a registered agent to serve as your company contact.

Step 5: Register Your New Vending Machine Business With the State

To form an LLC or incorporate a vending machine business, you must file registration papers with the state. The only difference is that LLCs require articles of incorporation, while corporations require articles of incorporation.

In general, states do not require corporations or partnerships to file incorporation documents. However, if you use a name other than your first and last name, you must apply for DBA (Doing Business As). A fictitious company name. Along the way, research and obtain the business licenses and permits you need to run your business.

Step 6: Create a Business Plan to Secure Funding

A business plan is also a formal document that can be used to finance your business. Even though the barriers to entry in the slot machine industry are much lower than in other industries, it still takes thousands of dollars to start a business. If you don't want to manage your savings or don't have the funds, you can consider other financing options.

First, calculate how much you will need to buy the machine you need and the items in it. Don't forget to consider other costs as well, if applicable. B. Trucks for transporting machinery.

Next, decide whether to apply for a short-term loan or an equipment loan. Short-term loans have shorter repayment periods and higher interest rates than long-term loans, but they are easier to meet. On the other hand, equipment financing has a fixed interest rate, and the equipment itself is used as collateral in the event of a breakdown. However, if you do not have a good credit history or business tax returns, qualifying for this loan will not be easy.

A business plan is a set of intentions for how the business will operate. It should contain the following:

• An overview of what your business is
• All the products and services you are selling
• How your business will generate revenue
• All your employees and executive staff
• From where you are getting funds
• Your operations model

Once you get the money, use it to buy your vending machines and supplies.

Step 7: Sign Contracts With Property Owners at Vending Sites

As previously mentioned, businesses and property owners are demanding compensation for being allowed to install vending machines on their premises. It is important to set the price, terms and conditions in a formal contract, as you will need to pay a certain percentage of the total sales as a commission.

Strive to achieve reasonable commission rates that satisfy local providers while ensuring acceptable profit margins. So don't forget to read the bill before agreeing to the number and signing the contract.

Here is a list of references to include in your contract with the property owner:

• Names of the parties entering into the agreement
• Agreement length
• The type of machine(s) and products sold
• Location(s) of the machine(s)
• Compensation
• Responsibilities related to machine damage, maintenance, and service for each party
• Notifications about machine failure or damage
• Exclusivity provision, if applicable
• Rights to add, remove, or replace machines
• A termination clause?

As with any legal document, it is always advisable to have a legal professional by your side when drafting a contract, or at least reviewing it to ensure that it meets your needs. Read our top recommendations for online legal services.

Step 8: Optimize your vending machine business’s performance

Once your slot business is on track, you need to start making a profit. However, the work is not done yet.

The next focus is profit optimization. Here are some options to consider:

• Streamline inventory management: Many vending machines require manual inventory tracking. So if you have multiple machines of similar models, consider investing in inventory management software that can streamline or automate the process.
• Better customer service: Providing top-notch customer service is a powerful way to differentiate yourself from your competitors. This also means that the machine is always working, easy to use and fully equipped.