To put it bluntly, the Micro Real Estate website would not exist if you can buy a vending machine and put it anywhere. If you are the owner or operator of a vending machine, then you need to make a deal with a willing commercial property owner or renter – say you want to put a vending machine in an independent pizza restaurant (but watch out – pizza vending machines are on their way) and they rent their space from a landlord, then you would need to talk to the pizza restaurant owner, but probably not their landlord.
You could cold call businesses yourself, or hire a vending machine locator service – but, Micro Real Estate is building a competitor to traditional vending machine locator businesses that has listings for vending machine locations.
If you want to put the vending machine outside of the pizza restaurant (maybe a frozen dessert vending machine?), then you might need to also talk to the landlord because they may have the final say on the outside appearance of the building. So, no you can’t buy a vending machine and put it anywhere, but you can put it anywhere that will accommodate your vending business.
Location, Location, Location
There are a few other things to consider when choosing a location, and first and foremost is foot traffic. Without foot traffic you will not make any money, so you need to pick a place that a lot of people are likely to visit. Second, you need to determine the product you’ll be able to sell at that location – if it’s just snacks and drinks then it can go almost anywhere, but sports fields, hospitals, schools, and office buildings are probably your best bets.
If you’re planning to sell high priced electronics, you’ll need to put a greater emphasis on security measures for your vending machine like security cameras and vending business insurance, that’s why these machines are typically in airports. There are other more unique situations as well. Pool toys at a pool? Sure! Pool toys at a hospital? No way. This is just basic product-market fit.
There are a million examples of where to locate a vending machine and items to vend, but one of my favorites is vending machines for alcohol. The product-market fit is even more nuanced, because would you put a luxury alcohol vending machine in a dive bar? Probably not. But it might make sense to provide a few alcohol vending machines to the organizers of a classy (but very boozy) event, like the Kentucky Derby or Princeton University Reunions.
There’s a variety of creative things you put put in a vending machine like dog toys at a dog park or armor-all at a self service car wash, and useful things like school supplies and small electronics like USB flash drives on college campuses.
The number of creative things that you can sell from a vending machine is only limited by your imagination. Just about any product that you can find on the web could be sold from a vending machine if it’s in an appropriate location. Picture this: a fruit vending machine for health food lovers in a yoga studio or gym. Or better yet, just a giant corn vending machine that sells corn feed to farmers. Okay, maybe you don’t live in a rural area, so a corn vending machine wouldn’t be too enticing, but what about a mystery vending machine in a bar? Now that I’ve caught your attention, maybe a milkshake vending machine would also be of interest?
Recurring Costs at any Location
You will also need to consider the rent you need to pay on your micro-property (the spot where the vending machine will be placed). You will essentially have a landlord that will ask either for a fixed fee per month (this could vary wildly depending on who you talk to) or for a cut of your sales every month (this could range from 2-15%). If the vending machine you’re using has a credit card reader, there will also be a transaction fee of 3% to 5%. Since your credit card reader’s monthly expense is not trivial, makes sure you get the best credit card reader that fits your budget.
The “rent” you pay on a vending machine location is often called ancillary income for the landlord. The landlord will make most of their money from the main tenant of the building and the rent you pay to place your vending machine there is fairly minor is comparison, hence the term “ancillary”.
You also need to consider how much it will cost to stock you vending machine. And, if you end up throwing down for a brand new vending machine, just realize that it will depreciate. Obviously, if you buy a used machine, the depreciation will be less. Also, if you opt for a mini vending machine, you can fully stock it with less product (empty spaces look bad, so if you don’t have the funds to fully stock a large machine, then go for a mini vending machine).
The vending industry is much larger than just business that own and operate vending machines, so if you’re looking to get into the industry, but don’t have the capital to buy a vending machine outright, there are still ample opportunities in other types of vending businesses. For example, if you are very tech oriented, Big Data and AI are great areas for growth, along with augmented reality (AR) products or using AR for advertising. If you’re an artist and not a techie, then art vending machines might be your niche. Or you’re just really big and strong, you could get into the specialized moving business because vending machines are very heavy.
Leptonic is Process Oriented
Since the process of finding a vending location typically involves a lot of phone calls and lost time, Leptonic, Inc. has developed the Micro Real Estate website to help link together vending machine owners/operators with commercial property owners/managers to facilitate the placement of vending machines. There is also a section for vending machine classifieds and similar micro real estate marketplaces.
We view this transactional process similar to renting an apartment in a building, except that there would not be a person living inside the vending machine (at least we hope no one is living in a vending machine).