Micro Real Estate

What is it like Owning a Vending Machine?

Woman at a vending machine

Stop trading time for money by putting a vending machine to work

If you are interested in passive income then you’ve probably heard that you should make money while you sleep. But what this really means is that you need to separate your time from how you make money. Vending machines are a great way to reduce your sales effort, and increase your time to money ratio, aka your hourly wage.

Vending machines are not true passive income generators because there is still effort in finding a suitable and inexpensive vending machine (buying a used vending machine – especially for ice cream vending machines – will help maximize your return on investment (ROI) for your micro real estate business), finding a location, and regularly re-stocking the products in the machine. You’ll want to start out with a location that is near your home or office, so that you don’t have to spend a lot of time and gas to drive to the location.

The Robots are Here to Stay

Owning a vending machine is like feeding human food to a robot and getting cash in return. Luckily, once you feed the robot, the robot feeds real live people, which is a relief because then maybe sentient AI vending machines will be on our side in the robot vs. human wars in 2122.

I’ll set my sci-fi writer aspirations aside for a bit and write about what you can expect from owning a vending machine. You can expect to make a profit, but whether you actually make a profit or not is ultimately up to how much effort you put into your vending machine business.

It’s all about the Benjamin’s, baby

If you are not making a profit in the location that your vending machine is first in, there’s no shame in looking for a better spot or hiring a vending machine locator and moving your machine there. Typically, the owner of the establishment that your vending machine resides in will want a cut of your monthly sales in the 5% to 15% range, so you’ll just have to end whatever contract you have with them. Hopefully, you have a month by month contract so there is not any penalty for ending your contract early.

If you have a year long or multi-year long contract with penalties for breaking it and the spot is not making you any money, well, you’re in a bad spot. Might be a good idea to talk with the owner of the establishment or a lawyer.

Day to day costs for owning a vending machine

From the day to day business side of it, you need to keep track of your costs and revenue. Remember that gas for you car so you can drive around to fill up the vending machines can add up, and also record the number of miles you drive to fill up your machine, since the more miles a car has the less it is worth, so that is a long term cost.

Your other costs will be the cost of the products that you vend from the machine, and any repairs that need to be made to the machine to keep it functioning. If you decide to buy an older machine, it is definitely a good idea to learn how to perform some common vending machine repair procedures on your own. Youtube is a great resource for any vending machine business owner.

Vending machine insurance is an additional cost, along with any fees from your credit card reader, which could be in the range of 2-5% of credit card sales.

Wads of Cash from Vending Machines

Now the fun part – you will be drowning in dollar bills. And quarters. Since most people use exact change in a vending machine, you’re going to get exactly that – change. You can expect to make about $100 a month when you first start at a decent location, and potentially a lot more if you find a really good location like a warehouse with 100+ employees or are able to establish the epic full line of a pizza vending machine, beer vending machine, and art vending machine.

If you have the funds available to buy an already established vending machine business, then it is probably a good idea to drive around with the previous owner on the route and introduce yourself (and/or the employee who will be restocking the machine) to the managers of the buildings along the route. This helps ensure a smooth transition.

Hopefully, this gives you a sense of what it’s like to own a vending machine, but honestly, as with just about anything, you’ll learn a lot more actually going through the process than you ever could by just reading about it.

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