How to start a vending machine business in 2024

Becoming a vending machine operator can provide exciting opportunities for both novice and seasoned entrepreneurs, whether it’s a full-time job or a side gig. The industry has seen steady growth in recent years and is projected to be valued at $37.2 billion by 2032, according to Allied Market Research. 

However, like any startup venture, launching a new vending machine business requires careful planning and strategic execution to ensure long-term success. The following guide explains what you should consider before entering this market and gives an overview of the process involved in starting a vending company.

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Pros and cons of a vending machine business

To determine if owning a vending machine business is a worthwhile endeavor, it’s important to weigh the pros and cons. Here are some of the main benefits of having a vending machine business:

• Low startup and overhead costs: Vending machine companies don’t require the same initial capital or operating expenses that many other businesses do. Rather than having to pay typical overhead costs, such as a dedicated commercial space, employee salaries and office equipment, your main investment will go toward the machines themselves and inventory. Other fees generally include licensing, insurance and maintenance.
• Flexibility: As a vending machine operator, you won’t need to work specific hours or days. You’ll have the flexibility to check the machines on a timetable that fits into your schedule and restock or perform maintenance when necessary. 
• Passive income: Since vending machines don’t need someone to monitor them regularly, they can be installed and left alone to generate income on their own. This will give you more free time to spend elsewhere.
• Scalability: The vending machine business model offers simple scalability once machines become profitable. It’s not difficult to add more machines and expand into new locations at a pace you feel comfortable with.

As with all types of businesses, there are also drawbacks to running a vending machine company. These include: 

• Competition: With the vending machine industry becoming increasingly popular among entrepreneurs, it can be challenging for newcomers to secure some of the more profitable locations. Areas that see a great deal of foot traffic, such as hospitals, hotels and airports, are highly competitive to get into and may require operators to pay a substantial fee. 
• Maintenance: To be a successful vending machine business, you must make sure your machines remain in good working order. This means tending to ongoing maintenance needs, especially as machines get older. Paying for repairs, even if doing them yourself, can take a good portion of your profits. Additionally, machines can be vulnerable to vandalism without full-time surveillance.
• Inventory management: Vending machines should be well stocked with a variety of options at all times to reduce customer complaints. As such, it’s vital to stay on top of your inventory and be organized enough to know when it’s time to restock or order replacement products. For some, this can be a time-consuming aspect of ownership.

Steps to start a vending machine business

Before you can begin profiting from a vending machine business, there are certain guidelines you must follow to ensure your company is set up legally and fully ready to operate.

1. Choose a business structure

Formally registering your vending machine business can help you save money on taxes, make it easier to access loans, reduce your personal liability and improve the company’s credibility. When choosing a business structure, the majority of vending operators decide to go with an LLC (limited liability company) or sole proprietorship. 

Sole proprietorships apply to organizations that are owned and operated by a single person. This is the simplest choice, as it requires minimal paperwork. However, there is no separation between the owner and the business, which means they hold all of the liability in the event of a lawsuit.

LLCs have more paperwork involved, but business owners receive personal liability protection since they’re considered a separate entity from the company. With an LLC, there’s also the option to be taxed as a pass-through entity or S corporation to allow for more tax benefits. 

2. Determine what you will sell

There are a variety of products that can be sold in vending machines. Before deciding what you will sell, conduct market research to determine which locations are available and what the demand is for those areas. You’ll want to make sure your machines are stocked with items that appeal to your target audience. 

While snacks and drinks are the most common options, you may also consider bulk vending with products such as toys and stickers or specialty vending machines that dispense items like laundry supplies, electronic accessories or toiletries. 

3. Select the right location

Location is key for any business — therefore, it’s essential to give significant thought to where you’ll install your vending machines. Look for spots that have high foot traffic, are easily accessible and have little to no competition from other vending companies. Some of the most sought-after sites include office buildings, schools, transportation hubs and shopping centers. Once you’ve picked a place, you’ll need to get permission from the property owner and sign a contract. 

4. Get any permits needed to operate

To operate your vending machine business in compliance with the law, you’ll need to obtain proper licensing. Depending on your location and what you’re selling, permits may come from the federal, state or local city government. 

You’ll have to research the specific requirements for vending companies at each level. For information on state licenses and permits, you can visit the IRS website, click on your state and then select the licensing link under “Doing Business in the State.”

5. Stock your machines

After figuring out the legalities, it’s time to fill your vending machines with products. You may purchase supplies from a number of sources, such as wholesale distributors, manufacturers, brick-and-mortar or online retailers and local convenience stores. Be sure to do price comparisons and negotiate the best deals to maximize your profits. 

6. Track sales and adjust inventory

Even though vending machines don’t need around-the-clock attention, it’s important to keep track of how well they’re performing. Recording and analyzing sales data will give you insight into areas that could use improvement. 

For example, if there are products that don’t seem to sell as well, you might want to switch those out with other items that have proven to be popular to help increase revenue. It can also help you identify which products should be restocked more frequently.

7. Maintain and restock your machines

Despite being fairly low maintenance, vending machines aren’t something you can install and completely forget about. Servicing and restocking your machines on a routine schedule will keep them operative and prevent a loss in profits from out-of-stock or expired products. 

Are vending machines profitable?

The profitability of vending machines depends on several factors, including where they’re located, the products that are offered and how many you operate. Standard vending machines typically bring in more than $75 per week, earning anywhere from $300 to $1,500 per month on average. Some can make much more if properly maintained, stocked and installed in areas that cater to a high volume of potential customers. 

Vending machine startup costs

Startup costs for a vending machine business will vary greatly based on whether you lease or purchase the machines, how many you get and what features they have. Purchasing used equipment could cost as little as a few hundred dollars, while new machines can run several thousand dollars. Leasing will require a monthly fee. 

You’ll also need to factor in expenses for:

• Inventory.
• Licensing and permits. 
• Insurance.
• Transportation for installing and stocking machines.
• Location fees.
• Marketing or advertising costs to get the word out about your new business.

Featured registered agent service offers

ZenBusiness

Learn More

Via ZenBusiness’ website

Cost

$199 annually

Same-day document delivery

No

Phone support

Yes

LegalZoom

Learn More

Via LegalZoom’s website

Cost

$199

Same-day document delivery

No

Phone support

Yes

Northwest Registered Agent

Learn More

Via Northwest Registered Agent’s website

Cost

$125

Same-day document delivery

Yes

Phone support

Yes

Frequently asked questions (FAQs)