Category Archives: Soda Vending Machines

How Much Do Vending Machines Make

Have you been searching for an investment opportunity that you can run on a part-time basis and one that does not need any special training? Then you should consider investing in a vending machine business. You don’t have to hire anyone to manage a vending machine as you can do it yourself or ask a member of your household to do it. This saves on labor costs.

Today in the United States, there are roughly 5 million operational vending units. Unsurprisingly, a 2018 report shows that food and beverage vending machines are leading the line. They occupy 56% of the market share. So, if you are looking to start on a business line that’s tested and proven, then you should try the food and beverage product line. You can dispense anything from snacks to soft drinks.

Maybe you are thinking that vending machines only sell sugar stuff like candies and chocolate bars. This is not entirely true as you decide on what foods to stock. So, you can sell healthy choices if you want to. Other benefits that come with a vending machine include scalability and cash-based transactions. You only need one vending machine to start with and it can generate the capital you need to set up another.

As for the payments, customers can’t buy on credit. The machines can only dispense when cash is slotted or when a payment card is swiped. Moreover, a vending machine is simple to maintain. All that is needed is regular restocking and maintenance. After all this, you must be asking, are they profitable? Let’s answer the question below.

Establishing the Profit Index

The National Automatic Merchandising Association (NAMA) estimates that roughly $20 billion is generated in the United States yearly by the 5 million active vending machines. On average, this means that each vending machine barely makes $5 a week. The survey shows that vending machines are not an instant jackpot and so you shouldn’t expect to make thousands of dollars from them.

Most vending machines entrepreneurs think that setting up several machines is critical in generating more revenue. This might be true but it’s necessary to establish your profit index first. Look at it this way:

Setting up a beverage dispensing machine allows you to sell 20 bottles per day on average. If your unit price is $1, this means you’ll be making $20 daily in sales. But suppose each bottle cost you $0.80 – you’ll only make $4 a day. This implies that you’ll be making $28 a week and $120 a month.

But remember, there are a few costs that are tantamount to deductions on your sales. For example, you’ll have to cater for electricity cost if your vending machine is an electronic type. You’ll also have to pay a vending machine professional to inspect and maintain your unit once. Furthermore, sourcing your supplies from afar means you’ll have to incur transportation costs if they don’t offer free shipping.

Steps to Making Money

Since a vending machine can be profitable, it all boils down to the decisions you make before and after setting up the business. To improve your chances of making money, here are key steps to follow:

  • Detailed research – When it comes to buying a vending machine, you can buy a new machine and build the business from scratch or buy an already operational vending machine. The latter means having access to immediate and consistent cash flow. If you decide to settle on the former, you’ll have to wait before cash can start flowing.
  • Identify a niche – You should identify a gap in the market that you can exploit. If it’s food that you want to sell, go for healthy options. You can also diversify to offer hot options. This decision should be arrived after studying your target audience.
  • Moving items – Buyers are always looking for snacks, hot drinks, and cold beverages. So, dispensing such options means more opportunities to make more sales. You can also dispense personal items like OTC drugs, toothpaste, and hygiene supplies. They also move easily.
  • Strategic location – You may be selling moving items but fail to generate as much money as you want if your vending machines are not strategically located. You need to set up the machines in heavy-traffic areas like shopping malls, bus terminals, airports, and main streets. You can also set up your business in a school, hospital, an office complex or within a company.
  • Extra investments – Though you may not be there all the time, you should hear the grievances and suggestions of your customers. This means investing in the right customer service. You can attach an SMS number or email address on the vending machines that they can use to talk to you.

You also need to invest in the right VMS (Vending Management System) if your vending machine is electronic. This allows you to manage your inventory and monitor your revenue seamlessly. Last but not least, you should invest enough time into the business. You need to be checking up on the machine as frequently as possible.

  • Bulk sourcing – When sourcing your products, you should learn to do it in bulk so as you can earn a valuable discount. This allows you to improve your profit index. You also save on transport cost.
  • Proper maintenance – No customer likes a poorly maintained or filthy-looking vending machine. It’s a turn-off. You need to clean your vending machine regularly and have it serviced by an expert occasionally. If any repairs are needed, you should learn to respond punctually.

Startup Costs

The first and most important startup cost is the cost of the machine. Generally, the price of buying vending machines depends on machine type, brand, size, and customization. On average, you’ll spend $2,000-$3,000 on a mechanical machine and $3,000 or more on an electronic type. Other notable startup costs include:

  • Stock – For your vending machine to be operational, you must stock it. At least, you need to budget for the opening stock. What you earn from it can be reinvested into the business.
  • Installation cost –If you are installing a vending machine within an existing business such as a shopping mall or a company complex, you may be required to pay rent. This is a major cost you need to budget for.

Closing Thought:

Without a doubt, vending machines can make you money. You just have to be realistic with your expectations and understand what the market needs. Selling the right items and targeting the right customers is critical in making money. So, it’s a decent business idea for someone looking to generate some cash on the side.

Benefits of Office Vending Machines

Today, a vending machine is not just a luxury at the workplace but actually a necessity. So, if you don’t have one in your business, then you are missing a lot. For starters, these machines can dispense different foods and drinks and not just candies. This means that your workers can grab a cup of hot cocoa or some cereals conveniently. This is not all.

The technology has advanced so much that vending machines of today can accept card payments. Therefore, change challenges are eliminated as it used to be the case of coin-operated vending machines. These machines are automated to follow the instruction of the customers. They are able to dispense what the customer wants to buy.

Moreover, the machines are quite mobile. This means you can change their positioning from time to time depending on where the market is concentrated. Though they may face issues like fraud and vandalism, vending machines are known to bring about so many benefits at the workplace. Here are the top 10:

To the Staff

  1. Accessibility

Vending machines are usually stationed in peculiar places to be easily accessible by the staff. During office breaks, employees can walk to the machines to buy whatever they want. To them, the machines provide them with a close solution as they don’t have to go out to look for foods and drinks.

  1. Reliability

The problem with most restaurants and supermarkets is that they are not predictable. One day they are opened and the next day they are not. As for restaurants, you may not get your favorite dish if you go during lunchtime as sometimes customers exceed the orders prepared. Vending machines, conversely, are very reliable. You’ll always get your preferred food or drink as long as it’s normally there.

  1. Product Variety

These days, vending machines are not just restricted to selling sodas and coffee. They can sell almost anything. From hot chocolate to cereals, employees can buy them all. This is actually one of the reasons why employees become motivated at work. Everyone wants the freedom to choose what to eat and drink.

  1. Cost-Effectiveness

If you have in-house vending machines, it makes sense to subsidize the cost of items so as to encourage your employees to buy from you. To employees on a budget, this is a cost-effective approach since they’ll be able to save. You’ll be surprised to find some employees buying food and drinks for taking home in the spirit of saving.

  1. Staff Camaraderie

The staff likes to make friends. They want to interact during their break and share a few things. Vending machines provide them with just the perfect camaraderie opportunity. They are able to crack jokes and forget about work stress if any. You too can have the opportunity with some of them during office breaks when you go to the vending machines to grab something to eat or drink.

To the Employer

  1. Work Morale

It’s widely known that happier employees are productive. So, you have to do everything possible to lift their work morale. One incredible way to do it is by stationing vending machines within the business area. Since they’ll have the freedom to buy whatever they want and are able to get them at subsidized prices, they’ll feel satisfied working for you. In the end, work productivity will improve considerably.

  1. Time-Saving

Generally, it’s time-consuming to go out to look for food during working days. As the employer, this is counterproductive since time is money. Investing in vending machines ensures that these employees don’t go out often. This is because they are able to get (in-house) foods and drinks that they would get outside the business premise. This is not all. They are able to buy them cheaply. This is a reason enough to keep them onsite. In the end, office hours are significantly saved.

  1. Corporate Wellness

Though vending machines of the old days were known to only dispense sugary and unhealthy snacks, what we call junks, the narrative has changed. Today, you can have your office vending machines selling everything that you can think of. This is meant to encourage corporate wellness. Employees will not be forced to look for healthier foods somewhere else since they’ll be available in-house.

  1. Customize Selections

When you approach a vending machine company, you can ask them to make you vending machines that meet your needs. For most business owners, customization means dispensing a variety of products. For others, it means the freedom to serve hot cocoa or coffee. For a few, it means to only accept card payments. Whatever customization means to you, it’s possible with vending machines.

  1. Extra Money

From an entrepreneurial standing, vending machines at the workplace are an extra way to inject money into the business. Since employees and visiting customers will be paying cash, you don’t have to worry about selling on credit. Though you may not get so much if vending machines are not the focal point of your business, what you get is enough to meet a few business expenses. Besides, your employees will be returning a fraction of their salary to you when they buy from the vending machines.

  1. Few Overheads

Unlike most mobile businesses, vending machines have close to zero overheads. For example, you don’t have to incur salary expenses as you can manage the vending machines yourself. All you have to do is restock the machines and come regularly to pick money collected. So, you don’t have to hire someone for this job. Additionally, there are zero advertising costs since the machines self-advertise.

  1. Cash Flow

The moment your vending machines start running and the first customer makes the first payment, cash will start to flow. Provided that the machines are placed in the right places and are running, there’ll always be money coming in. The advantage is that there are no collection issues. Unlike bank transactions, there are no bad checks with vending machines. Similarly, there are no fake currencies when it comes to vending machines. They are programmed to notice this. Thus, you are guaranteed genuine money in the long run.

Closing Thought: Are Vending Machines Worth Investing in?

Clearly, both the employer and the workforce benefit from vending machines at the workplace. So, yes they are worth investing in. They make things easy for both the workers and the employees and in the end, the business as a whole gets to improve. In case you had doubts about this investment, it’s time the doubt vanishes as you join the world of vending machines. Chances are that you won’t regret it.

What Did the First Vending Machines in the US Dispense?

Call it an evolution or simply advanced technology, vending machines are a trend. We’ve seen vending machines that dispense weird things like crabs and lobsters. We’ve also seen unique options that dispense automobiles, gold, and other valuables. And we can’t forget vending machines that prepare and dispense pizza and fries. So, what’s next? Actually, nobody really knows. We just have to wait and see. Luckily, a majority of these vending machines are found in the US. So, the next inventions will probably be in the ‘Land of the Freed’.

But, are you aware of the item that the first vending machine dispensed? Just for your information; the first-ever vending machine was invented outside the US. It was actually in Ancient Greek at around 215 BC and the man behind the creation was Greek Scholar Hero of Alexandria. This vending machine was designed to dispense holy water in the ancient temples. Since then, different nations have been borrowing the concept. Among the top beneficiaries is the US and it was in 1888 that we saw the first local creation. To help you understand this journey, here’s a breakdown of the items dispensed in their chronological order.

Gum – 1888

As mentioned, 1888 is the year that we saw the first vending machine in the United States. It was launched by Thomas Adams Gum Company in New York City to assist the company to vend tutti-frutti gum. A number of these dispensers were installed along the subway and the streets to target commuters.

Classic Foods – 1902

1902 is a historic year in Philadelphia. It’s the year that the first-ever coin-operated automat restaurant was launched. Going by the name Horn & Hardart, the automat restaurant was in operation till 1962. Though no one really knows why it had to close down, the impact of the restaurant is not something to be easily forgotten in Philadelphian history.

The joint was critical during the wartime as it enabled the locals to grab their favorite classic foods fast. All they needed to do is to insert nickel coins and wait for their orders to be served. So, the waiting staff was not necessary. Similar restaurants were opened by the same company in New York during the same period.

Coated Gumballs – 1907

After the invention of the tutti-frutti gum machines in 1888, so many other companies saw the need to improve this innovation. One of them was Pulver Manufacturing Company. The company saw it necessary to add attractive touches to the original gum vending machines. So, they opted to dispense round and coated gumballs. In addition, they added games to the machines.

Because of the additional touches that were really attractive to passers-by, these machines were nicknamed ‘trade stimulators’. Whenever a buyer would buy gumballs from the machine, the machine would move around in an attractive fashion. The innovation started in 1897 but it was only commercialized in 1907.

Soda – 1920

The soda vending machines are probably the most popular commercial dispensers in the US. Though such inventions existed before 1920, it was until this historic year that the machines were fully automated. So, in the eyes of America, actual soda vending machines were invented in 1926. The machine would dispense the beverage into cups.

By the time it got to the 50s, there were more classic dispensers for soda bottles. As a matter of fact, these vending machines would sell mostly Pepsi and Coca Cola drinks. A majority of the machines were a product of Vendorlator Manufacturing Company, a California-based company.

Cigarette – 1926

The 1920s saw many innovations of the vending machine hit the US market. Considering that cigarettes are a popular consumable, William Lowe saw the need to automatically sell them. So, he created the first-ever cigarette vending machine in the US. Nonetheless, the technology didn’t receive the intended market reception.

Its popularity has diminished over the years. This is because of increased worries of underage buyers. Unlike in Europe and Asia, there are no proper age verifications procedures in the US for the buyers. In these two continents, buyers are required to produce an ID, a driving license or any other form of identification.

Coffee – 1946

In the 1940s, Vendorlator Manufacturing Company was taking the American food market by storm. They went from soda dispensers to coffee vending machines. They saw an opportunity to help coffee vendors sell their products more conveniently while saving on labor. This gave birth to the idea of having coffee breaks in workplaces.

Sandwich – 1950

To complement coffee vending machines, Vendorlator Manufacturing Company created the first sandwich dispensers. The machines became so popular in the 50s for people who wanted to have sandwiches on the go.

Life Insurance – 1950s

The American airports saw the need to cover passengers against flight crash risks. So, they introduced life insurance dispensing machines in airports. The insurances were to protect the family of the policyholder in the event that the plane crashed and resulted in death. Unfortunately, these machines barely survived two decades.

Snacks – 1972

In 1972, Polyvend saw the need to sell snacks in an attractive manner. So, they came up with the first-ever glass-front dispensers. This was to target consumers with cravings. The customers would find the dispensed snacks irresistible after seeing them through the glass fronts.

2006 – The Year of Credit Card Scanners

In 2006, the vending machine technology took an enormous jump in the US. Within a decade, almost all vending machines in America would accept credit cards. These vending machines were associated with specialty merchandises like electronics, snacks, beverages, books, oral contraceptives, life insurance, and OTC drugs.

Basically, there’s a specialty dispenser for almost everything that you can buy from a physical or online store. But still, you should expect weirder and more unique vending machines to grace the American market.

Closing Thought:

Looking at the path that vending machines have taken over the last century, it’s has been a long one. What’s amazing though is the fact that you can’t tell what will be dispensed in the next few years. The technology is getting impressive by the day and so the options are genuinely limitless. Judging by the progress so far, it’s quite likely that we’ll see some unexpected items being dispensed in the next decade.