Separating from the military can be a tricky experience for anyone, especially if you’re unsure of what you want to do in the future. It’s hard to make an investment in time and money on an education or job if you don’t even know whether it’s right for you.
Or maybe you’re interested in starting your own business, but not sure if you have the acumen to hack the entrepreneurial lifestyle.
A small vending machine empire could be the ticket to financial independence. Or it could be a means of making good money until you know what direction you’re ready to take.
The Vending Industry
There are millions of vending machines across America. They’re all tiny storefronts strategically placed in hotels, offices, factories, military installations and almost everywhere you look. Chances are good there are so many, you don’t even notice them — until you really want one.
According to the 2019 Automatic Merchandiser’s Annual State of the Industry Survey, there were more than 2.17 million vending machines across the country, selling everything from gumballs to iPads.
And unlike many in-person stores that have struggled with COVID-19 pandemic restrictions, the $36.5 billion vending machine industry grew by 1.7% in 2020.
While major vending corporations take up a lot of space in the field, vending is one area where the little guy can still be competitive.
Starting a Vending Business
It doesn’t take a lot of skill or money to get started in vending, and the business sense you need is something that can be learned along the way. It can even be a stepping stone into a bigger business if that life is for you. On top of new skills and low startup costs, you can set your own schedule (mostly) and grow at your own pace.
Depending on which products you want to sell (cold beverages are the most popular), getting into the business can be relatively inexpensive, especially if you’re the one doing all the work. Like any other business, you still have to track the machine’s inventory and know when to restock, collect the cash and keep the books.
Much of that also depends on where your machines are located. High-traffic areas could require a daily visit to the machine for restocking, depending on what’s in the machine and whether it’s a popular product.
If it sounds like running a real business, it is. But if the location turns out to be less than ideal, you can just move your machine to another spot.
Startup costs include buying the machine and product. But there are other ongoing costs associated with vending machines. Some locations may require you to pay a percentage of sales to have your machine there. You will have to pay for the electricity and security of the machine. And of course, there’s the tax man to pay. Be sure to learn about the taxes in your state and municipalities.
Which Machines to Buy
On top of deciding what to sell, there are a lot of different machines out there at various costs. You can buy new or used, or you can rent one. These days, you can get one on Amazon. How you acquire it is just the beginning.
Machines come with different features to make your vending life easier, such as notifications when your inventory is low or the machine needs repair. There are even machines that will track all your sales and inventory data for you.
Accepting payment is another consideration. Do you want a cash-only machine or one that offers newfangled payment methods such as debit cards and Apple Pay? You may have to pay fees to Visa or Mastercard to accept those cards.
Once you have a vending machine and product to move, you just need to decide where to put it and how to get it there.
Placing a Vending Machine
Like most businesses, where you start it is almost as important as what you’re selling. In the vending machine world, location is key. So the first thing you want to do is observe areas where people are likely to be.
Areas with high foot traffic are always a great start, but you will want to observe the location at all hours of the day. This way, you can ensure there is sufficient traffic to sell products, but you will also know when the peak hours are and when the machine should be well-stocked.
When approaching a business owner with your vending machine idea, it’s always good to have a sales plan ready. Try to calculate the monthly gross sales from the machine and offer them a fair piece of the take. Be sure to include your plans for maintaining and restocking in your proposal.
It will also help to inform them of the benefits of having one of your machines in their establishment.
If your first machine does well, you’re going to want to start a business — a real one, registered with the state. This means you’ll need to choose a name, obtain an Employer Identification Number and open a business banking account, like any other business.
You will want an attorney to advise you, not a Military.com writer who is very much not a lawyer. If business is good, legal help is a sound investment to stay on the right side of the law and of the IRS.
An attorney can also advise you on licenses and permits and help manage contracts with the places your vending machines are located.
If it turns out that the vending machine life isn’t for you, you may know someone who’s interested in buying it. Businesses are an investment like anything else, and you could recoup these expenses by selling yours.
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