We see them everywhere — snacks and drinks here, coffee and hot beverages there, vending machines are always at the most convenient places. But have you ever wondered, how much does a vending machine make?
In the article below, you will be able to read about vending machine profitability, as well as the factors that influence their earnings. Feel free to check it out and explore the financial potential that they offer.
How Much Can You Make From Vending Machines?
While the average vending machine makes between $10 and $50 per day, the most profitable vending machines can generate up to $100 or even $150 of daily revenues.
There are several factors that impact the profitability of a vending machine, though the three key factors that make the biggest difference are:
- Location – Strategic placement in high-traffic areas such as office complexes, schools, transportation hubs, and shopping centers significantly boosts sales potential.
- Product offerings – Stocking the machine with popular, in-demand items products that cater to a target market preferences can contribute to increased profitability.
- Operating expenses – Effective management of operating expenses like restocking of fresh products, routine maintenance, and route planning can impact the bottom line.
By optimizing your business model around these three factors, you can increase your vending machine income, while decreasing the costs, resulting in larger profits.
What is the ideal vending machine location?
In the simplest terms, any high-traffic area where a large number of people frequent on a daily basis can be a great choice. The idea is to place the machine at a spot where many people will regularly pass it by, and potentially make a purchase.
Schools and Universities
Educational institutions offer a consistent flow of potential customers, including students, teachers, professors, and staff, who often spend hours on campus each day.
Offices and Business Complexes
Workplaces are filled with people who seek quick snacks and refreshments throughout the day. Placing vending machines in break rooms, lobbies, or common areas can rack up vending machine profits.
Hospitals and Healthcare Facilities
People visiting or working at medical centers appreciate convenient, on-the-go options for snacks and beverages.
Transportation Hubs
Airports, bus terminals, and train stations see continuous foot traffic, making them ideal spots for vending machines catering to travelers’ needs.
Shopping Centers
Busy malls and shopping districts draw large crowds, creating ample opportunities for sales and maximizing vending machine income.
What should my vending machine offer?
Beyond providing popular, in-demand options, creating a product selection that caters to the preferences of the target clientele can help boost a vending machine’s profit. Depending on its placement, different people prefer different vending machine types.
Classic Snacks and Beverages Vending Machine
Placing a classic snacks and beverages vending machine can be highly successful in office buildings, factories, and business complexes. Stock up on quick breakfast items, energy-boosting snacks like chips and cookies, and provide a variety of beverages for busy professionals, looking for a quick snack during their break.
Healthy Snack Vending Machine
Healthy snacks are ideal for schools, universities, hospitals, gyms, fitness centers, and other busy areas filled with health-conscious individuals. Filling up a healthy snack vending machine with nutritious options such as granola bars, protein bars, trail mix, bottled water, and fruit juices can do very well and exceed the average vending machine profit.
Coffee and Hot Beverage Vending Machine
Strategically placing coffee and hot beverage vending machines in office buildings, educational institutions, and transportation hubs can be highly profitable. Offer a variety of coffee, tea, and hot chocolate options to cater to diverse tastes and demographics.
Ice Vending Machines
Ice vending machines do very well in recreational areas, parks, beaches, and other highly-frequent outdoor venues. Providing ice to satisfy the cooling needs of visitors can be quite rewarding, as these machines have a notably high vending machine profit margin.
Electronics and Gadgets Vending Machine
As they don’t offer food or drinks, choosing the right location for specialty vending machines is even more crucial. They can be highly profitable when placed at airports and other transportation hubs, as travelers may need spare chargers, cables, headphones, adapters, etc.
How Much Do Vending Machines Make a Month?
While this business won’t make you rich overnight, it is reasonable to expect a monthly profit of between $300 and $600 per vending machine.
Although there are people who make their living solely by running vending machines, for most, it is a side hustle – a low-maintenance endeavor that will bring in a few hundred extra bucks.
Owning multiple vending machines at multiple locations can easily become a full-time job, with responsibilities such as:
- Planning efficient routes
- Frequent restocking at distant locations
- Maintenance and repairs
- Staying updated with product trends
Put simply, when running a vending machine business, the profit will be larger, but also, it will be more time-consuming and more expensive to maintain. On the other hand, if you already own a business, adding one or two vending machines on your property can help you make extra profits without too much hassle.
How Profitable Are Vending Machines?
To determine the profitability of vending machines, you can use a simple profit formula that consists of three variables:
- The number of products sold per day
- The vending machine’s profit margin
- The operating expenses for keeping the machine stocked up and running
Using this information, you can easily estimate the daily, weekly, monthly, or yearly profitability of a vending machine, simply by multiplying by the number of days it will be running:
Net profit = (number of days x products sold per day x profit margin) – operating expenses
If, for example, your machine sells 30 products per day, you have a profit margin of $0.80, and your operating expenses are $5 per day:
- Your daily profit would be (1 x 30 x $0.80) – $5 = $19
- Your weekly profit would be (5 x 30 x $0.80) – $35 = $85
- Your monthly profit would be (22 x 30 x $0.80) – $110 = $418
- Your yearly profit would be (264 x 30 x 0.80) – $1,320 = $5,016
It’s important to note that the above estimations, although they realistically illustrate averages, offer a snapshot of vending machine profit potential, subject to changes like maintenance issues, fluctuating sales, and other unforeseen circumstances.
Number of days in operation
You may have noticed, we used 5, 22, and 264, instead of 7, 30 or 31, and 365 to estimate the weekly, monthly, and yearly profit potential of vending machines. This is because, it is unrealistic to expect the average profit from vending machines every day of the year.
Machines placed near facilities and office buildings would normally experience foot traffic during weekdays, so it is important to take that into account when making estimations.
Products sold per day
We have already explained the importance of choosing the right location for maximizing vending machine income, and coupled with the right product offering, selling 30 products per day should be easy. At the right spot, it is not unusual for a vending machine to sell up to 50 products daily.
Some buildings are open for 10 hours per day, so during those hours, it would take only five sales per hour to reach 50. Many customers buy more than one product – a snack and a drink. So with multiple products sold per sale, it would be hard not to reach 30 products per day.
Vending machine profit margin
It is not uncommon for vending machine owners to mark up the price of their products by 200%, 300%, or more. After all, they deal with selling cheap products, so raising the price of a can of Coke from $0.35 to $0.70, or even $1, is absolutely viable.
Considering that vending machine operators have to pay sales taxes, on top of their operation expenses, a $0.65 markup on a soda can is actually the least they can take if they want their endeavor to be successful and profitable.
How Much Do Vending Machines Cost?
Fully functional, used or refurbished vending machines can cost anywhere between $1,200 and $3,000, depending on their type, size, features, and condition. The price of a brand new vending machine is north of $3,000 and can go up to $10,000 for specialized models.
Whether you opt for a lower-cost used machine or invest in a higher-priced new one, paying it off will be your biggest expense in the initial couple of years. After you get the total return on your investment, it will feel like you got a monthly raise of a few hundred dollars.
What are the vending machine operating expenses?
In addition to buying the machine, the day-to-day operating expenses for running a vending machine business include:
- Rent – Paid to the business or property owner where the vending machine will be placed. Typically around $50 to $100, per month, or 5% to 10% of the monthly vending machine income.
- Electricity – Usually covered in the rent, but operators who use their own properties to avoid paying rent, have to pay the electricity costs of running the machines.
- Gas – Depending on the vending machine type and location, operators may need to account for gas expenses if they travel to restock and service multiple machines.
- Credit card processing fees – A credit card reader on a vending machine is a must-have in today’s cashless society.
- Repairs and maintenance – Regular upkeep and occasional repairs to keep the machine in optimal working condition.
The costs for acquiring the products sold in the machine are not mentioned here as they were already covered in the vending machine profit margin section.
Are Vending Machines a Good Investment?
Whether you’re seeking a side hustle or envision building a substantial vending machine network, there is money to be made with vending machines. With the average profit from vending machines at around $300 to $600 per piece, it’s an avenue worth exploring.
However, it’s crucial to consider upfront costs, ongoing expenses, and the dedication needed for maintenance. If they align with your circumstances, managing vending machines can be a great way to start a small business and generate semi-passive income.
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