Owning a business is a dream for millions of Americans and the vending machine business offers great opportunities for entrepreneurs who are looking for freedom and flexibility while earning good money. One of the first questions most people ask when considering starting one of these businesses is, “How much do vending machines cost?”
What is the Average Cost of A Vending Machine?
This is a straightforward question but the answer isn’t quite as straightforward as you might think. The vending machine business isn’t cookie-cutter. There are a lot of variables that go into the equation for figuring out the average cost of a vending machine. The fact is, you can buy a used, decades-old snack vending machine for a few hundred dollars on the secondary market, or you can spend over $10,000 for a new, high-end machine that dispenses hot food and beverages.
The average cost of a vending machine depends on the type of machine you want, the products you wish to sell, and the technology that the machine uses to accept payment, vend items and keep those items fresh.
We can say the average cost of a vending machine falls below $10,000 but above $1,500, but let’s dig deeper to help you calculate your costs.
What Are the Costs of Running a Vending Machine Business?
These are some of the costs associated with running a vending machine business.
Vending Machine Units
You can’t start a vending machine business without the vending machines, and these will be the largest investment you make into your business. The price ranges for vending machine units can vary significantly based on the type of products you are selling. For example, a snack machine typically costs less than a machine that dispenses ready-to-eat meals. An older model machine that only accepts cash and leverages standard push-button operation will cost less than a modern machine that is more intuitive and accepts credit and debit swipes.
Because the costs can vary significantly, it’s best to estimate anywhere from $1,500 per machine on the low end to $10,000 on the high end, depending on the products and type of vending machine you are buying.
Restocking Vending Machines
Keeping a vending machine well-stocked is necessary. Without food or beverages, people have nothing to buy from you. Restocking vending machines requires an ongoing investment, and it can take a little while to find the right mix of products and inventory you keep on hand.
In the startup phase of your vending business, you will want to be careful about overstocking items. It will take a while to get a feel for your best-selling items and to identify patterns among your customers. Some items will sell well in one location but will be complete duds in others, and you don’t want to buy too much inventory that you cannot move.
If you choose to work with a vending machine company that offers extensive support services, they can typically provide you with some initial data to start out with so that you’re making smart choices for your budget. A vending machine company that offers franchise benefits will also typically sell you products at wholesale or reduced cost, leaving you more room to mark up products and achieve healthy margins. Their advisors can work with you to determine the right pricing model for the machines and locations you secure.
Vending Machine License
Business licenses are required for vending machine operators, and those licenses cost money. Costs will vary based on the state and municipality where the vending machines will be located, so it’s important to read and understand all of the legal requirements ahead of time.
In most cases, you will need to visit your city or county office to secure a license. If you are required to collect and pay state sales tax, you may also need to secure a seller’s permit. Perishable items may also be subject to health and food permits, as well. The cost of a business license and other permits can range from as low as ten dollars and as high as several hundred dollars and you will need to renew your license every so often, depending on your local regulations.
When it comes to running a profitable vending machine business, one of the pillars of success is location, location, location. It would be nice if you could put a vending machine anywhere you wish, but you need permission from property owners who often want a portion of your profits (a commission).
Ideally, you would negotiate a contract that does not include a commission for the location owner, but it’s often a good idea to provide a commission if you want to build a great relationship and if you want to maintain priority space on their property. Commissions are just pennies on the dollar and if a location is generating 100-plus vends per day, those pennies won’t cut into your long-term profits in any significant way.
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 location procurement assistance to help you build a profitable business.
Different Types of Vending Machines and How Much They Cost
As we have previously discussed, the cost of a vending machine will vary based on the type of machine you buy. If the machine must be refrigerated, it costs more than one that does not require refrigeration, for example. Here are some of the different types of vending machines and some cost considerations for each.
Soda machines are a staple of the vending machine industry. They can produce a high volume of sales and a well-placed soda machine can generate significant profit. They do cost a little more to purchase because they require refrigeration. They can start at $3,600 for an older, bare-bones model and prices can skyrocket based on the technology and features you want your machine to have.
Traditional snack machines vend grab-and-go items. They can be “junk food” snacks like chips, healthy food snacks like bags of nuts and trail mixes, or some mix of the two. These units can start around $3,000 on the low end and can go as high as $8,000 or more depending on the technology.
Candy machines can either vend single-serve candy bars and snack-sized bags, or they can be bulk machines that vend just one item (like a gumball machine). Bulk machines cost far less than traditional vending machines, but the profit margin can be significantly lower. If you’re selling gumballs for a quarter, you aren’t likely to make as much as someone who sells full-size candy bars.
As with other vending machines, candy machines can also vary in price based on whether the unit is refrigerated and the technology it uses to vend items. Prices can start as low as $1500 for a simple or used machine and run as high as $8,000 or more on the high end.
Coffee vending machines can be some of the most expensive to buy and to operate. In addition to standard electrical connections they require water connections, they have heating mechanisms and cup dispensers, they must be kept clean both inside and out and they typically require much more frequent maintenance than a machine that vends prepackaged beverages. A new machine on the low end can cost nearly $6,000 just to purchase, then you must factor in the ongoing costs associated with running each machine.
Cost of Partnering with a Vending Machine Franchise
Starting a vending machine business when you have no connections in the industry can be a significant challenge. Even if you purchase an existing route, your location owners may be wary of working with a new person with little experience and you never know for sure how well an existing route has been serviced before you took over.
Running a solo business also requires you to do all of your own research into the business, to try and scout and secure locations on your own, create your own contracts, develop your own sales process, etc. This can make it much more difficult to start generating revenue and profits.
A vending machine franchise opportunity helps remove all of those roadblocks. Working with an established company with name recognition, a proven business model and dedicated training and support teams gives you a competitive advantage in the vending business.
When you work with a vending machine franchise, you pay them a fee to secure your equipment, startup inventory, training, location support and more. And that support doesn’t end once you are up and running. You have ongoing access to their resources as their network of entrepreneurs to grow your business over time. The costs of buying into a vending machine franchise can range from $20,000 to $100,000 depending on the company.
Be careful when choosing a franchise opportunity and always make sure to read the fine print. Some companies charge small startup fees and then charge exorbitant ongoing fees throughout the life of your vending business. They may also require you to work full-time on your business which can be a struggle for new business owners who want to make sure they have enough cash to remain solvent during startup phases.
At Naturals2Go, you get the benefits of a franchise without those ongoing costs and restrictions. Our startup costs are not excessive by industry standards and we allow our entrepreneurs to start and grow their business at their own pace. We understand that our team members have lives and families and that’s why we provide the freedom to choose full-time or part-time, and a growth rate that suits your budget and goals. We believe in providing support and guidance, rather than pressure.
Because we understand that starting a vending machine business can be both exciting and stressful, we offer vending machine business financing options, as well. We want to make sure that our entrepreneurs are comfortable with the investment they are making and we will help you determine the right source of financing for your needs.
Are Vending Machines Profitable?
There are around 5 million operational vending machines in the US right now, taking in over $7 billion in annual sales. The snack niche alone generates $64 million in annual profits for vending machine operators.
That doesn’t mean every vending machine is cranking out profits. Product mix and location play a huge role in the profitability of a vending machine. A machine in a busy airport probably generates significant revenue while a soda machine in an apartment complex laundry room will generate less.
To generate profits, products must be chosen strategically and priced just right. Price your items too low, and you won’t make money. Price them too high in a competitive area and potential customers will choose another option.
In the vending industry, the average revenue for a machine is well over $75 each week and over $300 per month. Some vending machines generate much less than this, while some vending machines generate much, much more. The more well-placed, well-stocked machines an owner operates, the greater their revenue and the more profitable their business.
A well-run vending machine business can be very profitable for entrepreneurs. The keys to success lie in planning, support and the amount of work put into building the business. Investing in a franchise or business opportunity that provides resources for owners can greatly increase your chances of running a vending machine business that generates real income.
Another key to success is to pay attention to shifting consumer priorities. We are all old enough to remember when every vending machine we saw carried junk food –food that tastes great and offers no nutritional benefits, but those types of machines are very slowly but surely being replaced with healthier snack options like water, juices, nuts, meal-replacement options and items people can feel good about consuming.
There is always a time and a place for a soda and a bag of chips, but there is a real opportunity to capitalize on Americans’ desires for healthier, more natural choices. And a bonus for vending machine operators is those healthier options can often be priced to offer healthy margins, as well.
If you are interested in starting your own vending machine business, partner with Naturals2Go, one of the top healthy vending machine companies in the United States.
The Naturals2Go system is designed to set you up for success and get your business running quickly with equipment, qualified leads, sales appointments, training, support, education and more – all without the strict limitations and fees imposed by other vending companies. With Naturals2Go you get the benefits of:
- Setting your own goals without restriction
- Access to support staff and mentors at every stage of growth
- Help to secure financing
- Training and ongoing education through the life of your business
- No royalties or exorbitant ongoing fees
If you’re ready to get started, we are ready to talk to you. Contact Naturals2Go today to learn more about our proven track record for helping entrepreneurs achieve their goals.