People new to vending always want to know how much money they can make and when can they quit their day jobs.
This isn't a bad question to ask, but perhaps the better question would be, how long will it take to get there and is vending a good choice for me? A lot of people hoping to enter into vending aren't aware of the work involved in growing a vending business and how much money it can take.
Even if you start small and expand slowly, the process can take several years until you make enough money to support yourself and your family.
Plus, the number of machines and locations needed to make a decent living are daunting.
Believe me when I say you will need over 400 locations to start making money.
The average vending machine makes $7 per head, so a double head machine makes about $14 per month.
Once you consider gas and candy expenses, this isn't very much money.
Now you see why you need so many machines.
Consider too that you will probably be making less than the national average when you first start out.
You really only have two choices when starting out, start small and take a lot of time or invest big money and start full time right away.
The vast majority of people starting out opt for option one - starting small.
Let's run some quick numbers so you can get a feel for the time involved in building a route.
You can easily find used vending machines for sale on Craig's List or in your local paper for $50-$150 a piece, so let's start there.
Let's say you get the dirt cheap machines and even commit the time to locating them yourself.
You buy 30 and get them working for you on location.
If you are lucky, you will be making about $300 per month and from my own personal experience you'll actually be making closer to $200 per month.
Let's initially be optimistic and take the rosiest view first, then I'll tell you how it more realistically will go down.
To make the math easy I need to assume you have all your 30 machines plus the 4 new ones located each month you get them.
So, in month two you are now making 34 (machines) x $10 (profit) = $340.
You can now buy 6 machines with $40 left over.
I'll put this in a chart so you can see the general progression.
Month Total Machines Profit $50 machines Purchased Money Left Over
At lot of people get very excited when they first sit down to do the math on a vending route.
It seems almost too easy.
Too good to be true.
It is.
This is in no way close to how your first year will progress.
This model makes several basic assumptions which may or may not end up being true.
In all fairness, they will NOT happen.
The first assumption is that you reinvest 100% of your profits.
Maybe you simply can't afford to, maybe you have other obligations.
The second assumption is that you will make $10 profit per machine.
Maybe you will, but more likely than not, starting out you may only net $7 per machine until you locate your under performers and stabilize your route.
The third assumption is that you are buying the cheapest machines available, used machines at $50 a piece.
Deals like this are available, but not month in month out, so you may end up paying closer to the $100 - $150 price range.
The last and most improbable assumption is that you will be able to locate all these machines within a month of buying them.
If you are working full time job and doing this on evenings and weekends, you will be working quite hard to get even 2-3 locations per week.
The success rate with placements is about 10%, so for every 3 locations you get, you will approach 30 businesses.
This is a lot of schlepping around.
My own experience indicates that to get 400 machines bought and on location will take several years, so don't quit your day job just yet.
Yes, the vending machine business can make you money.
You can start part time with used vending machines, but to achieve any real growth will take a substantial time investment if you are starting small with a small initial cash investment.
This is not meant to discourage you from getting starting in the vending machine business, but only to keep you grounded so that you can set realistic goals.
Personally I love vending, I find it tough but fun and I hope you will too.
This isn't a bad question to ask, but perhaps the better question would be, how long will it take to get there and is vending a good choice for me? A lot of people hoping to enter into vending aren't aware of the work involved in growing a vending business and how much money it can take.
Even if you start small and expand slowly, the process can take several years until you make enough money to support yourself and your family.
Plus, the number of machines and locations needed to make a decent living are daunting.
Believe me when I say you will need over 400 locations to start making money.
The average vending machine makes $7 per head, so a double head machine makes about $14 per month.
Once you consider gas and candy expenses, this isn't very much money.
Now you see why you need so many machines.
Consider too that you will probably be making less than the national average when you first start out.
You really only have two choices when starting out, start small and take a lot of time or invest big money and start full time right away.
The vast majority of people starting out opt for option one - starting small.
Let's run some quick numbers so you can get a feel for the time involved in building a route.
You can easily find used vending machines for sale on Craig's List or in your local paper for $50-$150 a piece, so let's start there.
Let's say you get the dirt cheap machines and even commit the time to locating them yourself.
You buy 30 and get them working for you on location.
If you are lucky, you will be making about $300 per month and from my own personal experience you'll actually be making closer to $200 per month.
Let's initially be optimistic and take the rosiest view first, then I'll tell you how it more realistically will go down.
To make the math easy I need to assume you have all your 30 machines plus the 4 new ones located each month you get them.
So, in month two you are now making 34 (machines) x $10 (profit) = $340.
You can now buy 6 machines with $40 left over.
I'll put this in a chart so you can see the general progression.
Month Total Machines Profit $50 machines Purchased Money Left Over
- Month1 30 $300 6 0
- Month 2 34 $340 6 $40
- Month 3 40 $400 8 $40
- Month 4 48 $480 10 $20
- Month 5 58 $580 12 0
- Month 6 70 $700 14 0
- Month 7 84 $840 16 $40
- Month 8 100 $1,000 20 $40
- Month 9 120 $1,200 24 $40
- Month 10 144 $1,440 29 $30
- Month 11 173 $1,730 35 $10
- Month 12 208 $2,080 41 $40
At lot of people get very excited when they first sit down to do the math on a vending route.
It seems almost too easy.
Too good to be true.
It is.
This is in no way close to how your first year will progress.
This model makes several basic assumptions which may or may not end up being true.
In all fairness, they will NOT happen.
The first assumption is that you reinvest 100% of your profits.
Maybe you simply can't afford to, maybe you have other obligations.
The second assumption is that you will make $10 profit per machine.
Maybe you will, but more likely than not, starting out you may only net $7 per machine until you locate your under performers and stabilize your route.
The third assumption is that you are buying the cheapest machines available, used machines at $50 a piece.
Deals like this are available, but not month in month out, so you may end up paying closer to the $100 - $150 price range.
The last and most improbable assumption is that you will be able to locate all these machines within a month of buying them.
If you are working full time job and doing this on evenings and weekends, you will be working quite hard to get even 2-3 locations per week.
The success rate with placements is about 10%, so for every 3 locations you get, you will approach 30 businesses.
This is a lot of schlepping around.
My own experience indicates that to get 400 machines bought and on location will take several years, so don't quit your day job just yet.
Yes, the vending machine business can make you money.
You can start part time with used vending machines, but to achieve any real growth will take a substantial time investment if you are starting small with a small initial cash investment.
This is not meant to discourage you from getting starting in the vending machine business, but only to keep you grounded so that you can set realistic goals.
Personally I love vending, I find it tough but fun and I hope you will too.