What do you guys know about the vending machine business?

Rick Lee · Rick Lee's Garage

I'm getting bombarded with emails from a place that says they'll set you up with your own route, machines, etc. Of course, I don't buy any of it, but am kind of interested in maybe buying a few used machines and placing them myself, just to see how they do. I will talk to the mgr. at the local grocery store tomorrow, as he's always there. But I'm just wondering what kind of split the store owners want from the vending machine owners. Anyone you know do this?

HardDrive · 04-05-2009, 10:36 AM

Aren't vending machines frequently a small time mafia business?

pavulon · 04-05-2009, 10:37 AM

I know that the things that come out of them are generally over-priced...and they get used less if there are better/cheaper options nearby. Location, location, location.

Zeke · 04-05-2009, 10:42 AM

If you've been around the business for awhile and know the ropes, it can be lucrative. Vending is more like an art to get the best locations and out wit the lamer operators.

What kind of machines are you considering?

Jim Sims · 04-05-2009, 10:44 AM

If it was such a great moneymaking proposition they'd keep all the action for themselves. One of my colleagues lost a significant sum investing in vending machines. Another is about to lose his shirt with a video tape movie rental store; NetFlix and the advent of other technologies are doing him in.

Zeke · 04-05-2009, 11:04 AM

True, Jim, very true. Actually the most successful vending gut I met bought, sold and repaired machines.

I was thinking that the coin counting machines are probably good. NO inventory and a 10% gross take.

futuresoptions · 04-05-2009, 11:11 AM

I think it is like most things... it depends how much you want to dedicate to it and work it... the more you do and become good at it... the more rewards you will see.... I think that from what I know of you and your posts, that your time could be better spent in a different form of business.... IMHO...

Rick Lee · Rick Lee's Garage

Well, this place, Vendstar, is obviously making their money by supplying the vending machines and then a "consulting" service to help build the routes. I've read some horror stories online about this. I think the entry price is $10k for 40 machines. I don't know if that single, double or triple machines. The average in a good spot is 10 vends per day, which would be in the $2.50 range per machine, per day or $100 per day. Obviosuly, the candy is dirt cheap, even if Costco were my cheapest option. I'm wondering abotu splits with the store owners though.

I looked into the Red Box DVD rentals, but only skimmed it online. Looks like you need a business that see 15k customers per week for that one. My local grocery store just got rid of their Red Box. It was $1 for a DVD rental for one day and there was always a line of people looking through the choices. Of course, you pay with a credit card, so if you're late, you keep getting charged $1 per day. Seems like it would be better for some folks than Netflix, since you'd have no monthly commitment.

m21sniper · 04-05-2009, 11:19 AM

Video poker machines is where ALL the money is at.

It's also where all the 'shady' competition is at too.

on2wheels52 · on2wheels52's Garage

I suppose there could be some advantage to a business that doesn't take checks or credit cards for payment.
Jim

stomachmonkey · 04-05-2009, 11:22 AM

Bent noses and cauliflower ears, least that's what I ran into many years back when I had an innovative concept for a vending business.

Oh Haha · 04-05-2009, 12:02 PM

Rick,
I am in the vending industry as a manager at my former company and now i stock the machines at my new company. Beware of these "lucrative business opportunities". Like anything, if it sounds too good, it probably is.

Sure, you can make money but it won't happen overnight and the competition with larger vending companies is fierce.

There is WAY more to it then just stuffing candy bars in machines. you need to consider the upkeep and maintenance of the vendors.

I would be glad to hear your ideas or give you any help I can. I 've been in the business 18 years and have been priveleged enough to have been around someof the best vending guys in the country.

Don Plumley · Don Plumley's Garage

You should contact Ken Shahoian, he owns a small vending machine company. He posts over on Rennlist under Race911. Nice guy.

Rick Lee · Rick Lee's Garage

I'm talking about the gumball-type machines that take a quarter or two, not the ones that sell sodas or candy bars. The gumball machines appear to be a lot less maint-intensive.

Oh Haha · 04-05-2009, 01:58 PM

That's much different, in that case. Those are very low maintenance vendors.

Check with local stores to see if the ones they have are owned or the proceeds go to a local charity. it may be difficult to persuade someone to place yours just to make YOU money and not a charity.

Sorry if I sound pessimistic but if the vending business was easy I would have stared my own company instead of going to work for another.

It CAN be done.

Rick Lee · Rick Lee's Garage

I know it's not a get-rich-quick thing. But I figured it could be a side income builder with some initial investment. I'd much prefer to get a few side income things going that I could dedicate all my time to instead of finding another job working for the man. I can always get health insurance from my wife's employer. I'm not in a financial position to start my own business or go too long without a check. I gotta start something, somewhere though. Trading hours for dollars, making someone else rich is getting old faster than I'm getting old.

futuresoptions · 04-05-2009, 02:14 PM

Rick, if I were to get involved with such an adventure.... I would keep everything in house... I would purchase my own machines through Sam's club / Costco, and I would buy my product in bulk from the same... I would then contact other businesses/owners and get permissions to set up my machines at their locations... From what I understand, this requires giving them a cut in the profits.... but, I would do everything myself.... I would also recommend taking some classes in electrical/refrigeration so that you can troubleshoot and repair your own equipment starting out... just my .02

Rick Lee · Rick Lee's Garage

I'm not aware of any electrically-operated gumball or candy machines. Again, these are the one or two quarter turn-crank ones. The problem here in AZ would be sun protectors on the backsides facing the store windows to keep the candy from going stale.

I wish there were a way to really research the stats on machines in existing locations, like how many vends per day they get. There are plenty of these things on eBay for decent prices and even with free shipping. I'd be kind of worried about them getting stolen, since they tend to be the exits/entrances in whatever businesses they're placed.

I'll talk with the mgr. tomorrow at the local grocery store. He's always there and is a good guy.

futuresoptions · 04-05-2009, 02:36 PM

Well, I know that they do sell the type of machines that you are referring to at Sam's club... as far as the sun protectors... you could probably design your own cheaply..... if you didn't want to move into the electrical vending machines as of yet, I know that they do make a table top model that holds about 10 or so items from cookies to chips.... I would figure that these would probably turn a better profit for you placed in break rooms around your area... or possibly on the counter of say a mom & pop auto parts store for instance... just trying to help and give you some ideas...

Rick Lee · Rick Lee's Garage

Thanks. I will have my wife ask around to see who manages the machines in her break room.