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How to Start a Vending Machine Business



How to Start a Vending Machine Business

The vending machine industry brings in more than $6 billion annually. Though revenues have declined a bit in recent years, there are some industry trends and interesting niches that could make it an appealing opportunity for aspiring entrepreneurs.

On April 24-26, NAMA (National Automatic Merchandising Association) will host its annual trade show in Las Vegas. More than 5,000 operators, vendors, and industry experts will be on hand to discuss the state of the industry and share resources for business owners.

Ahead of that event, Small Business Trends spoke with Jeffrey Smith, NAMA Chair and CEO of All Star Services, a vending machine supplier in Michigan. He offered some industry tips and insights for those who may be interested in breaking into the industry. Here are some of the most essential steps to be aware of.



Tips on Starting a Vending Machine Business

Research the Market

Smith says, “Research your location and your market. Find out who the players are.”

Every specific market is different when it comes to vending machines. In your area, there may be a shortage of a particular vending machine style or a specific type of product. Before jumping in, it’s important to look into all the options available and what type of competition is around your location.

Find Your Niche

Knowing the landscape in your area can help you choose an area of focus. Of course, there are general snack food vending machines. But there are also machines that include specialty food items, personal care products, items like Aspirin, and even tech gadgets.

Smith adds, “A big thing we’re seeing right now is healthy options. When people think about vending machines they normally think snack foods. But now we’re seeing more of a variety, especially with target consumers that want to provide healthy options.”

Save Up

Of course, you will need to purchase all of your machines and inventory before getting started. This can be a decent investment, so you may want to start planning and saving early in the process.

Smith says, “It’s a very capital intensive business. Each vending machine you buy new can range from about $5,000 to $20,000.”

Compare Machines

The investment can vary depending on what type of machines and inventory you choose. You’ll need to find machines that work with the type of product you plan on selling, accept the right payment options for your needs, and offer the features you need to run your business effectively. Basic models will be significantly cheaper than those with advanced features. However, the newer machines also offer improved functionality and tech capabilities that may appeal to you.

Learn About the Technology

More specifically, there are tech options for helping you track sales and inventory. These options can cost you a bit more, but may be worth it in the long run.

Smith says, “Before, operators would just have to visit each location and bring extra stock with them just based on what they thought was needed. Now you can monitor what’s selling right from your office so you know exactly what needs to be stocked and when.”

Solicit Locations

From there, you’ll need to actually find locations to place your vending machines. Office buildings, malls, hotels, schools and public buildings all usually accommodate some type of vending machines. This might also be part of your niche. For example, you could start a company that targets offices with healthy snack options.

Whatever you decide, you’ll need to speak with building owners to work out placement details. Smith says that his company uses telemarketers to find property owners who are interested and set up appointments. Then a company rep will go meet with them. This eliminates much of the work for his actual team and allows them to focus on prospects that are more likely to be interested in their offerings.

Consider Adding Extra Services

Vending machine operators can also add other complementary services to their list of offerings. Specifically, Smith says his company offers a “pantry” service for offices. They basically stock the office kitchen with a variety of snacks and other food items that employees can enjoy free of charge. This basically helps the business keep their employees happy and healthy. And this is just one option for using your access to food and convenience items to add extra services for your clients.

Connect with Larger Firms

Smith added another tip for small vending machine operators interested in growing their customer base. He said that some larger firms like his will only work with accounts of a certain size. So they often like to connect with smaller operators where that they can pass those small jobs. This allows them to keep those customers happy and allows newer operators to build up their business.

Maintain Your Machines

Once you’ve started placing machines, you need to have a schedule for re-stocking them and providing any necessary repairs or maintenance. You’ll also want to have customer service reps in place so the contacts at each of your locations can reach out to you if there are any issues.

Image: Depositphotos.com

3 Comments ▼

Annie Pilon - Staff Writer


Annie Pilon Annie Pilon is a Senior Staff Writer for Small Business Trends, covering entrepreneur profiles, interviews, feature stories, community news and in-depth, expert-based guides. When she’s not writing she can be found on her personal blog Wattlebird, and exploring all that her home state of Michigan has to offer.

3 Reactions

  1. Vending machines are a long game. Make sure you’re in it for the long haul.

  2. Aira Bongco

    The best part about this business is that it is passive. You just need to set it up in the right location.

  3. Awesome post! Thanks for sharing the knowledge and keep up the good work.

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