- Starting a vending-machine business can be a lucrative side hustle or full-time venture.
- Finding a good location is key to earning a profit, Crystal Warren, who runs such a business, said.
- Here are five top locations for vending machines chosen by in the business.
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One of the most important steps to starting a vending-machine business is assessing your locations
That’s a lesson Crystal Warren learned the hard way when she started her company, Vending Factory, which made six figures last year. She lost about $5,000 from a vending-machine route that she purchased without fully vetting the three locations and five machines.
“It was missing a lot of key things that I didn’t know,” she said. “As soon as I purchased the route, I got kicked out of those locations because the owners were moving.”
She also hadn’t tested parts of the machines, like the coin mechanism and bill validator. Instead of trying to repair the machines and salvage the route, she sold everything for $459, which was lower than what she should have gotten for them, she said.
Today, Warren’s business scouts locations and places machines for entrepreneurs who are looking to get into the industry. She encourages founders to ask for help when they’re starting out.
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“You need to go to the machine and see what it’s worth,” she said.
While many vending entrepreneurs look for locations with a lot of foot traffic, Warren evaluates locations based on the target audience for the product. Foot traffic is still important, but it depends on what you’re selling. For example, more people buy eyelashes at airports than they do at hotels, she said.
“Your audience is really going to determine how much money you’re going to make,” she said. “You can have a thousand people walking in front of your machine — it doesn’t necessarily mean they’re going to buy.”
Vending machines can be a lucrative side hustle for entrepreneurs looking to earn passive income, especially as economic experts warn of a recession this year.
Here are the top five locations for a vending machine, according to vending-machine entrepreneurs.
1. Schools and universities
When most educational institutions closed for remote learning earlier in the COVID-19 pandemic, schools lost their appeal for vending-machine placement. Now that students are back in classrooms, schools are back at the top of Warren’s list.
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Snack and drink machines do well at any type of school: middle schools, high schools, and colleges, Warren said.
According to the vending entrepreneur Marcus Gram, younger people use vending machines more than other age groups.
“Students have access to the vending machines in their dorms 24/7 and even late at night for classes,” he said.
2. Warehouses
Since warehouses typically have a large number of workers, there’s plenty of traffic for vending machines, Warren said.
Additionally, warehouses tend to have long operating hours and multiple shifts, so employees are more likely to use vending machines, Gram said.
“Physical labor causes people to burn calories, and when you burn calories, you’re hungry or thirsty,” he added. “Breaks aren’t typically long enough for people to go to the store, so they turn to the vending machine.”
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He said that caffeinated beverages and sports drinks were good products to stock at a warehouse for employees looking to boost their energy.
3. Hotels and vacation rentals
Warren said that hotels could be a good place for a vending machine, adding that you’d have the most success with simple products, rather than niche items.
“If you have lashes inside of the vending machine at a hotel, it doesn’t necessarily mean that that’s going to sell,” she said.
Steve Slagle, a vending entrepreneur, set up water and ice machines at two large condominium complexes in Panama City Beach, Florida. The condos are booked as vacation rentals on Airbnb and Vrbo, and he made more than $30,000 in revenue in one year, he previously told Insider.
4. Large offices
Gram said that offices with more than 100 employees were good places for vending machines, though business offices don’t usually perform as well as warehouses. For the entrepreneur to earn enough profit, the office space should have double the people compared with a warehouse, he added.
“People in offices tend to not have the same snacking habits as people at warehouses, especially if the office is a 9 a.m. to 5 p.m. or 8 a.m. to 4 p.m. location,” he said. “This is different if the location is open for multiple shifts such as 9 a.m. to 9 p.m.”
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5. Gyms
Gram said you could make decent money at gyms because, like warehouses, people are burning calories and likely looking for an energy boost or to quench their thirst. He recommends stocking water, Gatorade, and Vitamin Water.
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“Whether it’s soccer, baseball, or LA Fitness, you will make good money at these places,” he said. “On average, you make more money from beverage sales than snack sales.”
