As a consumer, you can find vending machines pretty much anywhere people spend time. They’re located everywhere, from employee break rooms to car dealerships.
Plenty of people have, but it makes sense for you to look at the details before reaching a conclusion.
Are Vending Machines Expensive To Maintain?
In most places, you can expect to spend $50 to $100 on vending machine maintenance. Of course, several factors will influence how much you pay, including:
- Whether your area requires a business license to operate a vending machine
- How much, or whether, you pay someone for a place to keep your vending machine
- How advanced your vending machine is
If you already own the location where you plan to place your vending machine, you won’t need to worry about that cost. Otherwise, the real estate or business owner will probably expect a commission around 7% of your sales.
(Prepare to negotiate with owners so you can make more money while competing against other vending machine operators in the area. Even one percentage point could make a big difference as you grow your vending machine business.)
New vending machine models can include a lot of movie parts and electronics. While these models offer several advantages, repairing and maintaining them usually costs more than maintaining a basic vending machine. For example, repairs might require hiring someone experienced in replacing computer parts as well as mechanical parts.
At first, you will probably want to hire a contractor to maintain your vending machines when needed. Eventually, you could own enough vending machines that it makes more sense to hire a maintenance professional.
How Profitable Is Owning A Vending Machine?
Vending machines can generate profits without much oversight. As long as you stock them with items people want to buy and place them in high-traffic locations, you could make a few hundred per week.
Even a vending machine in a low-traffic area can generate $25 or more in profit each week. That might not sound like much money until you consider how little work it takes to keep a vending machine like that stocked. The less people use it, the less money you will spend maintaining and stocking the machine.
How Long Does It Take For a Vending Machine to Pay For Itself?
It’s reasonably safe to assume a vending machine can pay for itself within a year. However, a lot of variables will affect how long it takes your vending machine to pay for itself.
Let’s say you’re just entering the market, so you buy a refurbished vending machine for $1,200. As long as it can make a profit of $25 per week, you will break even by the end of the year.
A newer model with a lot of fancy features could easily cost $5,000 or even up to $10,000. In those cases, you would need to find highly trafficked areas where people want to buy snacks and drinks. Still, the machine could cover your initial investment within a year. It will take some careful planning, though.
Can I Put A Vending Machine Anywhere?
Technically, vending machines can work just about anywhere. As long as the machine has a power supply, it can do its job. Some vending machines don’t require any electricity, so you could put them anywhere.
Of course, you need to have permission from the property owner. If you own the space, that isn’t a problem. You can put vending machines in your business’s lobby to earn some extra cash. If you don’t own the property, though, you will need to pay someone to use the spot.
Property owners will either charge you a flat fee or a percentage of your sales. Expect to pay higher amounts when you ask to put a vending machine in a popular area where it has higher earning potential.
The amount or percentage you pay will depend on the agreement you reach with the property owner. If the area already has vending machines, the owner might have a contract that prevents them from renting spaces to you. You can only get these and related details by reaching out to the owner and starting a conversation.
How Much Electricity Does It Cost To Run a Vending Machine?
The amount of money you spend on electricity depends on your area’s electricity rate and how much energy your vending machine consumes.
On average, businesses in the United States pay about 13 cents per kWh. The actual rate you pay can vary significantly, though. Oregon and North Dakota have low electricity prices around 10 cents per kWh. In Massachusetts and Rhode Island, you will pay nearly three times that amount.
Luckily, most vending machines don’t use much electricity. A very basic, mechanical model might only need enough power to run a couple of lights. In that case, the cost of electricity could come to just a few dollars per year. A refrigerated model will consume more electricity, though, generally between 2,500 and 4,400 kWh per year.
Using the average cost of electricity, running a refrigerated vending machine will cost $325 to $575 per year.
Talk to your local utility provider to get an estimate of how much you will spend on electricity to run your vending machine.
How Much Does It Cost To Operate A Vending Machine?
Operating a vending machine will require several upfront and ongoing costs.
The upfront costs include:
- Purchasing a vending machine (anywhere from $1,000 to $10,000)
- Items that will appeal to buyers
Ongoing costs can include:
- Maintenance service that keep the vending machine operational
- Restocking the vending machine
- Rent or revenue percentage for the property owner
- Electricity (unless the property owner covers the bill)
You might also want to invest money in market research that helps you choose items that will generate higher profits. For example, you might learn that the people who visit the space prefer healthy foods. In that case, you could boost your return on investment by choosing fresh fruits and bottled water.
Other optional costs that you might encounter include:
- Paying someone to stock the machine and collect money
- Interest when you accept credit card payments
Are Vending Machines Profitable?
Vending machines are relatively low-cost opportunities for people who want to earn money or build businesses. Since you can purchase a vending machine for a couple thousand dollars, the cost probably won’t seem like a significant challenge. Finding places where you can put your vending machines might take some time and effort, though.
You might want to start by talking to business owners in your area. Find out whether they already have vending machines in their break rooms and lobbies. If they don’t, you might have found an opportunity for your new business.
Over time, you can use the profits from your vending machines to purchase models with built-in refrigerators and credit card readers. You can also use your success as a selling point to new locations. The more vending machines you manage, the more reliable your business looks. Eventually, what begins as a business that generates $25 a week could turn into a company that drives growth and serves communities.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.
