Short Answer: Vending machine profits depend on the traffic each machine receives. You can make anywhere from around $5 per week from low-traffic vending machines to several hundred dollars per week from machines in prime locations. The cost to lease or purchase a vending machine also varies greatly. You can lease a machine for around $100-$150 per month. Used or new vending machines can range from under $1,000 for basic models to as much as $20,000 for more advanced machines. After expenses and upkeep, the average profit margin for vending machines is around 2.4% — but your mileage will vary.
For more information on earning a profit with vending machines, plus information on where to buy or lease one, see below.
Are Vending Machines Profitable?
Vending machine profits vary greatly depending on the location of the machine, its contents, and the amount of traffic it receives. In 2011, a National Automatic Merchandising Association (NAMA) study tracked a vending machine business in Texas. It found annual revenues of the vending machines varied from $904 to $9,944, or between $17 and $828 per week. After factoring costs to service and stock the machines, the vending machines that were in the NAMA study averaged an annual profit of $1,153.
VendSoft, a company specializing in vending machine inventory software, cites a more modest profit range. Hypothetically, it claims vending machines in low-traffic areas may make no more than $5 per week, while machines in popular areas can net over $100 per week.
How to Make Money With Vending Machines
The most important step in making a profit with vending machines is finding good locations to place them. The locations should match your intended market. For example, stocking junk food outside of a fitness center may not yield as many sales as a machine offering healthy snacks and cold beverages. A convention center may be a great location for a coffee vending machine. Candy and chips may get the best sales in a shopping center where people are looking to grab a quick snack.
A profitable vending machine has a location that sees high traffic and offers products targeted to that traffic.
Vending Machine Operating Costs
Vending machines are fairly passive income sources, but they do come with expenses you need to consider. First, vending machines need to be restocked as often as one to two times per week. The cost of goods will depend entirely on what products you are selling and how many are needed to fill the machine.
You will also need to establish a contract with the property owner where you are placing your vending machine. Typically, this includes a commission paid to them as a percentage of sales. This percentage can range from around 5% to 20%.
If your machine accepts credit cards, you may be subject to transaction fees. And, you will need to pay taxes just the same as any other business. You may be subject to additional state taxes depending on where you live, so be sure to check with local legislature for details.
Finally, you’ll need to account for any maintenance such as broken parts, electrical malfunction, or even vandalism. Some things may be covered under the machine’s warranty, so be sure to check it before paying for any repairs.
Are Vending Machines a Good Investment?
Purchasing a vending machine can cost anywhere from $1,000 for a used model to $20,000 for a specialized unit that serves fresh or heated food. You can also lease a machine for around $100-$150 per month. Because there is such a broad range of upfront costs, plus maintenance, it could take anywhere from a few months to a few years to recoup your startup investment and earn a profit.
Generally, vending machine profit margins are low. According to the National Automatic Merchandising Association, on average, a small vending machine business (classified as a business with under $2 million in annual revenue) has a net profit margin of 2.4%. Meaning that for every $1 paid into the vending machine, the vending machine owner receives 2.4 cents after accounting for expenses such as the costs to reload and service the machine. (This percentage was reported in 2011, but we were unable to find an updated statistic.)
However, you can improve your margins by servicing the machines yourself (rather than hiring staff), finding high-traffic locations, and stocking higher-margin products such as fresh food or specialized drinks. Keeping the above considerations in mind, a vending machine can be a good passive income stream.
Where to Get a Vending Machine
The largest expense in a vending machine business is the vending machine itself. There are multiple ways to get started in the vending machine business, each with pros and cons based on your finances.
Buying a New Vending Machine
As previously mentioned, the costs to buy a vending machine vary widely depending on the type of vending machine you need. Standard vending machines that sell basic prepackaged foods cost between $1,500 and $5,000, while specialized vending machines that serve hot food can cost as much as $20,000. Vending machine manufacturers may be able to offer financing to help those with limited money get started.
Vending machines are available for purchase from the manufacturers outlined below. Note that pricing is not published online; you will need to contact the company directly to speak with a sales representative.
- Types of machines sold: Cold beverages, prepackaged snacks, healthy items, and prepackaged deli items such as sandwiches. Custom wraps and logo applications are available in select units.
- Visit the AMS Machines website for available products
Crane Merchandising Systems
- Types of machines sold: Hot and cold beverages, prepackaged snacks, and prepackaged deli items such as hot dogs and sandwiches. Customizable graphics and rotating shelves are available in select units.
- Visit the Crane Merchandising website for available products
- Types of machines sold: Cold beverage vending machines and standing freezers
- Visit the Royal Machine website for available products
- Types of machines sold: Hot and cold beverages, prepackaged snacks, glass door refrigerators, coin counters, and industrial vending machines that dispense items such as office or medical supplies.
- Visit the Seaga website for a list of products
- Types of machines sold: Hot and cold beverages, prepackaged snacks, and refrigerated and frozen foods. Custom branding and digital interfaces are available in select units.
- Visit the USI website for available products
- Types of machines sold: Cold beverages and prepackaged snacks
- Visit the Vendo Sanden website for a list of products
Buying a Used Vending Machine
Used machines can often be found for under $1,000, but exact prices will depend on the age of the machine, type of machine, and its condition. Special financing is not available when buying used.
Some locations to purchase used vending machines include:
Buying a Vending Machine Route
Another option to enter the vending machine industry is to purchase an already established vending machine business. This removes the hassle of finding locations and negotiating agreements with property owners. It also allows you to see current sales numbers for the machines to ensure the locations are producing adequate returns. However, this option also requires a larger initial investment compared to just buying a vending machine.
Buying a successful vending machine route will be expensive, likely costing several times the route’s annual income. However, the proven locations and established operating agreements may make buying an existing vending machine business less risky.
In addition to using local resources such as your local newspaper, there are several sites for those looking to purchase already existing vending machine businesses:
Leasing a Vending Machine
Another option to get started in the vending industry is to lease a vending machine. Under a lease agreement, you would agree to pay the vending machine owner a fixed fee to use their vending machines. A lease allows you to keep your vending equipment up to date and requires less money upfront. Long term, however, leasing a vending machine may lead to increased total costs since you will always be paying for your machine.
Monthly lease costs for new vending machines that sell cold drinks or prepackaged snacks are typically between $100 and $150 per month, however exact costs vary depending on the vending machine model.
Vending machine manufacturers may offer leasing options, along with the following retailers:
- Friendly Vending – New Jersey and New York only
- Vending Group
- There are many vending machine leasing companies that only serve local areas; Manta has a list of over 1,000 regional vending machine rental companies to look through
If vending machines aren’t for you, our article details many other ways to make money on the side.