The vending business is attractive to entrepreneurs because it creates a mostly passive income. There are nearly 5 million vending machines in the United States right now, generating over $7 billion in total annual sales and $64 million a year in profit for the snack niche alone.
However, it takes work to get those vending machines generating income while you sleep. The first step in creating a profitable vending business is to choose the right location. A vending machine that no one sees cannot generate any revenue. If you are considering starting a vending machine business, this is what you need to know about selecting profitable locations.
Can You Place Vending Machines Anywhere?
You probably could technically place a vending machine anywhere, but it’s not quite so simple. First and foremost, you cannot legally place a machine on someone else’s property and use their utilities without their permission or a contract. Second, not every location is ideal for a vending machine. What good is a vending machine that sits idle with no passersby? When starting or expanding a vending business, it is important to find the most profitable potential locations.
How to Choose a Profitable Vending Machine Location
In the vending business, as in the real estate market, success is all about location, location, location. A profitable business begins with choosing the right locations, which involves some research and some legwork to evaluate traffic, study your competition and secure permission from property owners.
Without people, you cannot have a profitable vending business. Foot traffic is the key ingredient to a successful vending machine. Remember, vending purchases often fall into one of two categories – impulse buys or habitual buys. People either grab something when they are in need of a quick pick-me-up and a snack catches their eye, or they get in the habit of making a purchase from a machine they see every day like in their break room at work, their school or in their apartment or condo building.
When it comes to foot traffic, you want to find locations where a large number of people walk by every single day like shopping centers, schools, gyms, etc. For places like offices, you need a minimum of 50 full-time employees to generate revenue and profits.
If you can be the first business to place vending machines in a building or public location, it can help lock down your hold on that location. However, it can also be a wise move to slide into a location that already has vending machines installed. Competition is actually positive – especially if your machines fill a niche not covered by the existing set of machines or if your machines are much newer, attractive, hold a new assortment of products and allow for different payment options other than dollar bills and change, which many people never carry.
If you find a great location but you’ll be in competition with other machines, evaluate those competitors for:
- Condition of their machines
- Maintenance of the machines
- Existing product selection
- Existing payment options of machines
- Price points of existing products
It is nice to have zero competition, but the right competition can be just as profitable for vending business owners.
It would be ideal if you could just plug in a vending machine anywhere you found a spot and start earning money. However, you do need permission from property owners and a contract in order to place your machines.
In some cases, it will be very easy to land a contract and in other cases, you’ll have to jump through quite a few hoops. In many situations, business owners will also want a percentage of the profits of your machines to offset the cost of their utilities and generate some passive income of their own.
10 Best Locations for Vending Machines
So, just what are some of the best locations for vending machines? Every site a vending operator considers should be evaluated individually, but these are ten of the most ideal locations to pursue.
Restaurants are a great location for vending machines. Anyone who has ever worked in a restaurant knows that shifts are long and breaks are nearly impossible to guarantee. Vending machines in employee break rooms give restaurant staff a way to stay energized and full during service.
Apartment complexes are a flurry of activity with people constantly coming and going 24 hours a day, seven days a week. Many complexes also have laundry rooms, common areas, playgrounds and parks, party rooms, or gyms. These are great locations for vending machines since all members of the community have access to those spaces and many residents utilize those areas on a regular basis. One or more locations on the property can be ideal spots to place vending machines with a wide selection of food and beverage products.
Boys and Girls Clubs
Boys and Girls Clubs give children safe places to go after school where they are supervised by mentors who help them with their homework, organize games and activities, help them with life skills and more. And what does every child want and need after school? A snack. However, because Boys and Girls Clubs and similar community organizations are about helping children reach their potential, junk food vending machines are not great choices. These organizations are a great location for healthy vending machines to give children better options for after-school snacks – especially considering many of those same children come from food-insecure homes and they may not eat much – if at all – until they go back to school in the morning.
Hotels and Motels
Hotel and motel guests are captive audiences. Even if a hotel has a restaurant, not every guest wants a full meal or wants to pay for a full meal. Some hotels have micro-markets, but those are typically in the lobby and not every guest wants to make the trip for a quick snack – especially if they can grab one on their floor. Placing vending machines in the lobby, side entrances and ice machine areas can be a great way to generate continuous revenue.
People who go to gyms work up an appetite and post-workout they don’t necessarily want to stop at the drive-through next door, they want something healthy. Gyms and fitness centers are ideal locations for vending machines that offer healthy snacks and drinks that can help people refuel after working up a sweat. The employees who work there also appreciate a vending machine with healthy options, since they are typically hourly workers who only receive short breaks.
Businesses with 50 or more employees are great locations for vending machines. Employees get hungry and thirsty throughout the day and vending machines provide options for people who don’t pack drinks, snacks or lunches for themselves, which in today’s busy world, includes most people.
Similarly, manufacturing facilities and industrial parks are also great locations for vending machines. These businesses employ hundreds of people (typically 24 hours a day) who get short breaks but need to stay on their toes. Placing vending machines in the break room gives them options – and provides the vending business with a great source of steady income.
Supermarkets and Retail Stores
In a supermarket or retail store, there are two specific audiences for vending machines. First, the customers coming in and out of the store. People often get hungry and thirsty while they are running errands and a vending machine placed near an entrance can be a great way to capture foot traffic and leverage impulse buys. The second audience is the employee base. Retail employees usually get one or two ten-minute breaks a shift and a short meal break. They usually don’t have time to run to a restaurant to grab a meal or snack, and vending machines provide an affordable opportunity to fuel up before going back out on the floor.
It can take someone anywhere from one hour to four hours to do their laundry in a laundromat. If you look, you’ll see people doing homework or work, reading books, watching movies or playing games to pass the time. Those people also get hungry and thirsty while they wait for the laundry to finish. Vending machines with a selection of beverages and snacks ensure customers don’t have to abandon their laundry in search of food or drink. Laundromats are also a great place to cultivate repeat business, since most customers do their laundry at the same location at the same time, each week. Vending machines can become a natural part of their weekly routine.
Schools, Community Colleges and Universities
Students are busy – and they have healthy appetites. Schools, community colleges and universities are a flurry of activity every single day. Vending machines in the right locations on a school property can be an excellent source of revenue as hundreds of people pass by every day who are in a hurry, who are likely hungry and who want a quick snack while they do work between classes or are in a hurry to get to class. Schools are particularly ideal for vending machines that sell healthy products because parents and administrators want to ensure students have access to better options than chips, cupcakes and sodas during the day.
College dorms are also excellent spots for vending machines. Students stay up late and they don’t always want to run out for a snack while they are up working or hanging out with their friends. It’s easy to go to a vending machine – especially if the machine can be programmed to take bank cards, credit cards or even school meal plan cards.
Shopping Centers and Malls
Vending machines provide mall shoppers with a fast, convenient and more affordable option for a snack or beverage than the food court. Machines placed at entrances and exits and strategic locations throughout the center gives those shoppers a way to grab something quick without standing in line or waiting for meal prep. Healthy vending machines are a great option for shopping centers because more consumers are demanding healthier options and many shoppers are there with their kids. Many parents today would rather give their kids something healthy to munch on to keep them occupied than handing them something sugary and full of empty calories.
Malls are also a great place to get creative with your placement. Abandoned storefronts that are generating no revenue for the center can be a smart place to position your vending machines. It helps the shopping center generate some revenue out of the empty store and gives shoppers a reason to keep walking past the abandoned store to other areas of the mall.
Need Help Finding Profitable Vending Machine Locations?
Profitable vending machine locations are plentiful but identifying them and securing them can take some legwork. The vending business can generate significant passive income once you put in the upfront work to secure great locations. Make sure you’re continually scouting new locations and building connections in your community to open new possibilities for revenue and profits.
If you’re new to the vending business and you want help finding profitable vending machine locations, Naturals2Go is here to help. As a member of our team of entrepreneurs and an owner of our machines, you will have access to full training and ongoing support to help you secure top locations and build a profitable business.
Contact us today to learn more about starting your own vending machine business.