Earlier than the pandemic, I labored at an ad-tech startup in California and made $240,000 a yr, together with gross sales fee.
However because the nation went into lockdown in March 2020, so did lots of my retail, restaurant and leisure shoppers. Even after placing in lengthy hours, I struggled to satisfy my gross sales quota.
That spring, I learn on Twitter about somebody making passive earnings by inserting merchandising machines in workplace buildings. It instantly piqued my curiosity.
So in June and July, I bought two machines for $5,000 to get a aspect hustle going. Issues have been sluggish at first, however I used to be hopeful that I may scale the enterprise. I give up my day job that summer time to focus all my time and vitality into it.
I am glad I took the danger: At this time, I’ve 57 merchandising machines scattered throughout my hometown and herald a median of $30,000 in month-to-month income.
Over the past two years, I’ve spent about $160,000 on machines, however I’ve a constructive money stream and no debt. I solely must work six hours per week on merchandising machine operations. I can spend the remainder of my time on different initiatives, like my on-line teaching enterprise and making an attempt to land new machine areas.
Here is my five-step course of on get began within the merchandising machine enterprise:
1. Land a busy location.
For my first location, I referred to as up a buddy whose dad owns a mechanic store. The store had 10 workers and solely bought $181 value of merchandise in the course of the first three months, but it surely received my foot within the door
My second location was in an residence constructing, and bought $1,200 value of merchandise within the first month.
One of the best ways to land a location is by cold-calling. I goal buildings which have lots of workers or foot site visitors. I like to recommend utilizing D7 Lead Finder, which helps you find different types of businesses in a specific area and the contact information.
Ask to speak to the business owner or manager and tell them that you’d like to place a machine in their location. Explain the benefits (e.g., convenience of snacks and drinks for employees or customers) and lay out how you’d be handling all of the responsibilities.
Many venues just want the vending machine services without having to pay a premium for installation and upkeep. One vending machine business owner, for example, has 21 locations but only pays one venue 15% of his monthly profits.
2. Buy a quality machine.
I bought my first vending machine on Craiglist for $1,000. I also got some deals on OfferUp and Facebook Marketplace.
But looking back, it was a waste of time and money. I’ve found that it’s more worth it to buy new machines through a local supplier, even though it could cost up to $4,000. They are more reliable and require less maintenance.
I frequently purchase from Ross Vending, which has an entire warehouse of new and refurbished machines.
For first-time vendors, I suggest getting a stacker drink machine. It holds six to 10 types of products, which means you don’t have to buy as many variations and can experiment with what sells.
I only buy three types of vending machines. For snacks, I use the Crane 167/168. For drinks, I use the Royal stackers or the BevMax 4.
3. Buy a credit card reader.
Not all machines come with credit card readers, so I bought one from Nayax for my first machine. They can cost up to $399, but are well worth the price.
Nayax card readers show you sales on a live basis through their website and app, meaning you don’t have to physically go to the machine to see what needs to be restocked.
Credit card readers give customers an alternative payment option. Losing a sale because someone doesn’t have cash on them isn’t good for business.
Plus, it’s the customer who takes on the credit card processing fees, not the seller.
Vending machines are heavy and dangerous to move, so it’s hard to fit them into tight spaces.
It costs about $100 to $150 to pay for a professional mover, but it’s worth it. Your machine distributor can connect you with a local and experienced mover.
I have a 2,000-square-foot warehouse where Pepsi and wholesale suppliers deliver products that my two part-time employees use to stock our machines.
But I still buy products from bulk stores because the deals are great. When it comes to stocking, Sam’s Club takes the crown.
Depending on your product mix, it costs anywhere from $250 to $1,000 to fill a machine. My first machine cost $250 to stock.
When deciding what to sell, start with popular, recognizable brands. Test what sells and what doesn’t. Aim for items will give you a profit margin of between 50% and 75%.
I love being a vending machine business owner. My biggest problem is when coin slots getting jammed, but I wouldn’t trade that in for the stresses that came with my previous 9-to-5 job.
Quinn Miller quit his six-figure sales job in 2020 to run his vending machine business full-time. Follow him on Twitter @quinnmiller.
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