Erie, PA · Member since 2018 · 413 posts · 348 votes
I know it isn't real estate but curious if anyone owns any vending machines.
I set the goal for myself to open up a new stream of income every year for myself. There are a few locally owned businesses that I thought a vending machine would do well.
I know it wouldnt create a large amount of income, but income nonetheless.
Like anything I get into I want to do the research before I act. Any advice or resources that would be good to help me get started? Thanks in advance
Glendale, CA · Member since 2018 · 60 posts · 13 votes
8y
Hi Joe,
I was doing a vending business for almost 2 years. I had 3 machines running for that period of time and had total 5 locations at different point of the past. I got to know many other people in the industry from the manufacturers of the machine to huge investors and guys who made 200k/year themselves. I personally didn't like it and closed my business 3 months ago. Now, THERE ARE people who love it and enjoy it. I just want to say that I'm not the one. Anyway, if you decide to dive into it here are some pieces of advice.
My first plan was to collect e-mails of nearest businesses like gyms, schools, salons, banks, etc. and sent them bulk offers to install the machine. I sent thousands of offers, the conversion rate is very low but sometime it works. Also, you also can just stop by and talk to managers and owners of businesses. That way I got into 3 locations. Also, you can buy the locations with the machines themselves. Average spot has to bring you at least 300$ NET. And those spots are not easy to find.
I personally didn't like it because you have to do everything yourself everyday - go buy all the products in Costco or other huge stores, looking for discounts and promotions to get a better price (because most of the profit in vending comes from a very cheap prices when you buy bulk). I don't like spend my life focusing on such things as checking new sales from Costco and going there at Tuesday because that's when you can get on 10 cents per coke less than in any other day. That just doesn't feel right to me :) So, if you want to hire somebody to buy and deliver stuff to vending machines you need at least 10 machines, because otherwise the salary of a person would be too high compare to profits you are getting from the sales. Most of the people you gonna meet in that business will be 45-70 years men. Now, I'm 24, so I could feel that age gap :) I decided to try that business out just like you, because it sounds interesting, easy and like it doesn't commit you much. As it turns out that will take A LOT OF your time and most of the time you'll be solving unpleasant problems. It doesn't really worth it unless you want to go really deep. If you want just a couple of machines to try it out - don't waste your time on it and find something better.
Manville, NJ · Member since 2015 · 140 posts · 59 votes
8y
The barrier for entry is so low in that industry. Its a bad business model. Too easy to get bumped/ Inventory loos and no leverage involved. Real Estate much better. Now a coin op laundry seems attractive to me. I would suggest other industry within real estate where you can leverage your business. i own a property management company, construction company, rental property, flip houses, mentor investors, and hopefully will own part of a brokerage within a year or so.