There are a ton of side hustle that can get you some extra cash, but a lucrative side hustle can start with forming a small business using vending machines.
You would think vending machines only make money through chump change but can actually be a lucrative investment. Owning and operating vending machines can be the start of a small business with minimal maintenance simply by restocking the machines and collecting the earnings.
It might seem not too many people use vending machines anymore but the latest “state of industry” claims 2019 was a “record-breaking” year for convenience services operators’ sales according to Vending MarketWatch. An average vending machine is estimated to earn $35 per week compared to a well-stocked vending machine in safe, high-traffic locations making $400weekly.
One of the best benefits of starting a small vending machine business is the low startup cost by investing in a vending machine and stocking the machine with drinks or snacks depending on the machine you get. A new vending machine can cost upwards of $8,000 but you can find functioning used machines online using Facebook Market Place or Craigslist that can help you save money on shipping/transportation costs.
After getting a vending machine, the next thing is stocking the machine with drinks and/or snacks that you can buy in bulk at your local wholesale store like Costco or Sam’s Club with low prices. New vending machine operators are offering more than just drinks or snacks incorporating other items like protein bars, juice, and healthy snack alternatives.
There are also more uncommon options for vending machines like hot beverages with a specialty machine along with non-edible items like laundry products, PPE, phone chargers, first-aid items, and toiletries. These uncommon options are better to use in commercial locations such as travel terminals or hotels.
One of the most important factors is finding a good location for your vending machine with some of the best spots near schools, laundromats, public transportation stations, hospitals, or anywhere else where people are in a hurry or have few options for food. An important part of operating a small vending machine business is making sure you’re following protocols to set up a vending machine at your desired location.
After finding the perfect spot, you’ll have to do some research on how your state licenses and governs vendors that can be done by contacting your local Chamber of Commerce or your state’s small business regulators. This information will be important to present to the property managers or owners where you would like to feature your vending machine.
Any vending machine in a public space can be subject to ADA compliance standards and you should keep accessibility when scouting for a location. Another consideration is whether you will have to pay commission to the property owner (typically 10% to 25%) of the vending machine location to pay for the electricity to power the vending machine.
It’s important to prepare a proprietor contract that will cover whether you establish an exclusive partnership with a location, terms you have with the location owner, contract length, and an agreed compensation rate. There are a couple of considerations before committing to a vending machine small business like:
• How sustainable this machine business is for you?
• Securing a profiting location for your vending machine.
• Physical fitness with a fair amount of hauling products.
• Acquiring a tax ID and license to legally operate.
The contract should also include provisions for breach of contract that will address obligations and expectations for restocking and servicing for the machine, the possibility of unprofitability, and vandalism or theft. If you can, have a lawyer look over the contract before signing to make sure all areas are covered.
Having a small vending machine business can be a lucrative side hustle that can bring in extra money through a passive paycheck. Once all these factors are covered, you’ll be on your way to running your own small business that can be quite lucrative. The research for this article was sourced from Nerd Wallet.