How To Make Extra Money By Investing In An ATM
You probably think of vending machines as your snack outpost of last resort when you’re stranded in an office or airport. You probably don’t think of them as a cutting edge, cash-producing business venture, but maybe you should. Did you know that these oases of snack vending machines are often owned by independent owners? Rather than being hired by the Coca-Cola Company, they can be profitably run by individuals like you and me (assuming you’re not the CEO of PepsiCo).
Earlier this year, NerdWallet analyzed the costs and benefits to operate vending machines like a small business, offering a step-by-step guide to help you judge whether the investment makes sense to you (possibly beyond realizing your childhood dream of owning a candy). Here are the main things to consider if you want to become an ATM tycoon in your neighborhood.
Vending Machine Trend: Are They Really Profitable?
The pandemic significantly increased interest in the business of individuals owning and maintaining their own vending machines, especially among Gen Z members who watch their peers display their purported resulting cash flows on TikTok and Youtube. Last year Covered vox how now 20-year-old YouTuber Jamie Ibanez would have made six figures from practice; in fact, the coin revealed, most of its income comes from from his YouTube channel. Yet in this interview, Ibanez tells Vox that he bought his first vending machine after watching this. Someone’s YouTube Video get all that money out of their machines. Inspiring!
Let me be the first person to point out that TikTok and YouTube are not real life. How lucrative is this business venture really? Well, according to Sales market watch: very. Their latest report on the “state of the industry” qualifies 2019 as a “record” year for sales by local service operators. There is no new report on this side of the pandemic yet, but general consensus online is that a return to work in person and to travel holds promise for the vending machine industry.
However, given variables such as location, number of machines, and type of products sold, it is difficult to find an accurate estimate of how much income you can actually generate by owning a machine. Nerdwallet reports that the average vending machine makes $ 35 per week, but vending machines that are “well stocked and placed in safe, high-traffic areas” can earn you nearly triple that amount, or over $ 400 per month.
Low start-up costs
The main costs of your vending machine business come from the initial investment in the machine and then storing it. A new machine direct from a manufacturer can cost up to $ 8,000, but used machines are on Craigslist or Facebook Marketplace for as low as $ 300. You want to strike a balance between a fancy, expensive machine and a piece of junk that ends up causing more trouble than it’s worth. To test the waters, try buying a vending machine and initial inventory for under $ 2,000. Of course, these inventory costs will depend on what you choose to sell.
Inventory of your choice
You’re not limited to snacks and soda, especially if you want to target a specific market. According to Nerdwallet, it’s a good idea for new vending machine operators to start with a specialty, whether it’s healthy snacks, drinks, or even fresh food, until you learn more about it. ‘industry. In addition to the usual ones, here are some avenues for reflection that might be suitable for your business:
- Protein bars
- Hot drinks via a specialized machine
- Inedible items, such as tobacco (if legal in your state), phone chargers, or laundry products
Location, location, location
Your choice of inventory should come from what is in demand in your area. Think about places where you bought something from a vending machine. Viable places are likely to be near schools, hospitals, train stations, laundromats, or anywhere else you’re either in a rush or stuck with no other choice of food.
If you’ve found the perfect spot, you can’t just drop your machine out of nowhere. You will need to get contact information and contact property owners and managers. Before that, prepare yourself with information on how your state licenses and regulates suppliers by contacting your local chamber of commerce or looking online for your state’s small business regulations.
In addition to the start-up costs, you need to think about the sustainability of a particular vending machine business for you.
- You need license and tax identification number do it legally (although it seems easy enough to do).
- You need to secure the vending machine house in a profitable area with enough recurring foot traffic.
- You need a certain level of fitness, since machine maintenance involves a fair amount of walking and transportation products.
With enough market research and careful decision making, the vending machine industry is accessible to almost anyone. If you are convinced that owning a vending machine is your next entrepreneurial adventure, definitely read on. The Complete Step-by-Step Guide to NerdWallet. And please, for me: Stock salt and vinegar crisps.