Would you like to run your own business? Or maybe you just need some extra income? Have you considered running a soda can vending machine business? In this post I will take you through exactly what you need to know to get started with this type of business.
The good news is that the soda machines business model isn’t going to break the bank. And like most vending machine businesses, it can be scaled quite quickly.
Work out profit potential first
If you plan to buy your own cold drink vending machines and scale up from there, you have to develop a business focus. And that means working out your annual revenue and profit potential. Take a quick look at the profit calculator here to gain a rough idea of what you can expect once you are up and running.
Your first machine could cost upwards of $3000 (new) and you need to know that you can expect some profit within the first year. Compared to other industries, there are low startup costs, but don’t buy a new vending machine unless you are happy with the profit potential.
Soda can vending machine business: the location
You will first have to find the best location for your machine. Your biggest worry here is that you install a machine that has competition nearby. Your spot needs to be as far away from other machines as possible. At the same time, it needs to be somewhere that has plenty of potential customers.
This is a huge part of the process. For example, you wouldn’t place a soda machine in a busy cafeteria, where customers will buy their soda from the staff. And it would be ridiculous to install a soda can vending machine in a gym. Soda is not the first thing on a gym user’s mind.
Your best bet is to focus on small businesses first of all. These will have a good number of employees that are a potential customer group for your drink selections.
Then make some calls. Contact the businesses and ask to speak to the manager or owner. Discuss the prospect of placing a vending machine on their premises.
- Dress nice. Professionals expect to work with professionals. Dress smartly and ensure you look like someone they can do business with
- Take a flyer or brochure of whichever machine you have to show the manager/boss. Again, this brings an air of professionalism to the situation
- After discussing the proposition, don’t leave without giving them your business card. Don’t have one? Get one. You’re running a business.
- The business will most likely have a vending machine or two in place already. However, there is a chance that it will be old and still use coins for vending. Your vending machine will be new, and have a number of payment options, including credit card readers
To help you along your way, here is a list of potential locations for your new machine. The list is more than enough for you to get a plan together and start contacting businesses today.
- Amusement Park
- Apartment Building
- Assisted Living Center
- Auto Brake Shop
- Auto Dealership
- Bingo Hall
- Bowling Alley
- Bus Station
- Business Office Building
- Car Wash
- College/ University
- Community Center
- Community Swimming Pool
- Computer Store
- Dental Office
- Department Store
- Doctor’s Office
- Driver’s License Division
- Dry Cleaner
- Fire Station
- Fraternity/ Sorority
- Furniture Store
- Gift Shop
- Golf Course Lounge
- Government Office
- Health Club
- Humane Society
- Ice Skating Rink
- Industrial Park
- Manufacturing Plant
- Medical Building
- Meeting Hall
- Military Reserve/ Guard Center
- Military Enlistment Office
- Military Treatment Facility
- Miniature Golf
- Motor Vehicle Division
- Motorcycle Shop
- Muffler Shop
- Night Club
- Nursing Home/ Retirement Home
- Oil & Lube Center
- Office buildings
- Police Station
- Private School
- Public Utility Office
- Railroad Station
- Recreation Center
- Rental Yard
- Rest Stop Facility (off Highway)
- Roller Skating Rink
- Senior Center
- Shopping Center
- Ski Resort
- Stock Brokerage
- Telemarketing Office
- Tire Store
- Tourist Attraction
- Truck Stop
- Trucking Company
- Veteran’s Affairs Facility
- Veterinary Office
- Waiting Room (any kind)
- Youth Center
If you are committed to buying a vending machine and organizing the location of it, it’s important to understand that it can be a bit of a challenge at first. You will spend some time on the phone and walking into locations to speak to the manager.
Want to start your very own vending machine business?
Why not learn from the experts at iKrave Vending.
Featured in Business Insider and CNBC.
However, there are ways to make the process a lot quicker and easier.
Think about the places where you visit regularly, like your local gym or sports club. You might also consider your local doctor’s surgery. Because you visit regularly, you will know the people who work there pretty well, or at least be a familiar face. That makes it less awkward when approaching them about the machine.
Don’t forget to ask family and friends too. They will have workplaces where they know people who want a convenient way to buy a perfect cold drink from time to time. And they can spread the word about the vending machine.
A Chamber of Commerce may also be able to help you. Using their services, you can find out about business owners in your area, giving you some ideas for potential locations for vending machines.
You will also have to think about other costs, including those that may come with placing the machine. You must pay commissions to the owner of the vending machine location and fund the energy needed to run the machine before you can pocket the earnings. The property owner usually receives 10% to 25% of the revenue generated by your vending machine.
When choosing a location, make sure it benefits from some crisp lighting. Also bear in mind that machines come in various sizes and styles. For example, many machines have a small footprint, but some don’t. Your location and the placement itself have to take size into account.
Can vending machine business: Buying one
You can find your first can vending machine through one of the following methods:
- Vending machine manufacturers and wholesalers provide the largest selection of vending machines, the latest technology, and the most comprehensive services for delivery, repairs, and training. This is generally viewed as a more expensive option. The reason for this is that franchises and companies may ask that you purchase a set number of machines as a minimum. There may also be fees around servicing and so on.
- You can browse different vending machine brands and models at secondary market sellers or specialty online retailers, and they often have business owner resources.
- There are thousands of vending machines for sale on platforms like Craigslist and eBay. You can also try online marketplaces such as Sam’s Club. It is possible to filter results by merchant and owner location, so you don’t need to worry about large shipping fees. This may be a good option for the first-time entrepreneur. These places also tend to offer a wider range of cold beverage products too for your vending business.
You will find that, as with all established business opportunities, vending machines do offer plenty of ‘bells and whistles’. Just like with phones, there are even smart vending machine options. These extra features and types of machines include:
- Machines that serve snacks and drinks (some machines offer candy bars for example)
- Ability to accept credit cards and large bills (and other cashless payments)
- The latest vending technology, including accessibility via touch or voice
- Monitor your inventory remotely and receive alerts when it is low
- You can brand the front of your machine with “wraps”
- Interactive full-color display (such as a full-color touch screen)
- Special high capacity machines
- Low power consumption models
- Custom vending machines that make a visual impact
- A large delivery bin option (some customers prefer this)
- A vending management system (for stock control etc.)
But don’t get sucked into spending too much on these extras, since they can quickly add up. Consider what you can afford at the moment, while also choosing the vending machine that best suits your products. Spending an extra $100 because you like the look of the keypad of the vending machine doesn’t make sense when you are chasing profits.
Some secondary market sellers offer support for people new to the vending machine industry. This will allow you to tap into years of experience before you jump in.
Like most people, you will have to find a way to finance your new can machine venture. Your best option may be to secure a short-term loan to finance your vending machine if you’re already a business owner and have a history of business financial success.
You don’t need a lot of money to start a vending machine business that makes money. An equipment financing loan can help if you need it. In addition to being collateral, your equipment is also the factor determining the terms of these loans.
Can vending machine business: some FAQs
Can I make money with this business?
Vendors earn $35 on average each week, but machines placed in safe, high-traffic areas can generate $400 to $500 per month. Like all businesses there are a number of factors that will determine your profit. For example, your soda selections could have a significant impact on revenue. Something as small as offering 12-ounce cans instead of 24oz bottles may make a difference financially.
What about tax?
Sales tax is charged on the revenue generated by beverage machines. The amount depends on your state. The amount of sales tax varies depending on your state.
How much does it cost to stock a soda can vending machine?
Used or refurbished vending machines can be found for between $1,200 and $3,000. Vending machines range in cost from $3,000 to $10,000, depending on their features and size.
When will my machine make it’s money back?
Due to so many factors and issues it’s hard to predict whether payback will be shorter than 6 months (accepted industry average). It usually takes 12 to 14 months for a vending machine to recoup its costs.
Any further tips?
You can begin to generate a passive income from your vending machine business as you learn about its pattern of demand, without the need to take out a massive loan. You can increase the scope of the business gradually depending on whether you will continue to work another job, so you can take on more when you are ready or scale back if needed.
If you want to run your own can vending machine business, here is a quick outline of what to do:
- Consider vending machines in locations where you feel motivated to use them. Ask the owner to work out an agreement.
- A vending machine can be purchased from a manufacturer or wholesaler, or a secondary market retailer, or online.
- Explore your finance options: The ideal choices are a short-term loan and equipment financing.
- Keep it gradual, and scale when you are ready.
Enjoy this post? Why not take a look at my post on investing in ice vending machines?
Ever wanted to have your own franchise but don’t know where to start? Try my Beginners Guide.