With a recession on the horizon and skyrocketing inflation slashing consumer budgets, 2023 may feel like an intimidating time to run or start a business. But not all businesses are created equal. While some may falter in trying economic times, other businesses – like vending – are actually perfectly suited for a recession.
With low startup costs, low overhead costs, and steady demand, vending machines are a safe business to open or maintain, even during an economic downturn. After all, people still have to eat and drink, and vending machines are a convenient, low-cost solution. Vending machines enable you to grow a new revenue stream with passive income.
If you’re thinking of getting into vending or starting a side hustle, read on for an overview of everything you need to know before you get started.
How to Make Passive Income from Your Vending Machines
Making passive income from your vending machines won’t come right away. You’ll need some time to get the hang of things and to learn what your customers want. However, once you’ve overcome the preliminary hurdles, and if you have the proper tools, you’ll be able to start making money from your side hustle with less hands-on work. In order to make passive income from vending machines, you’ll need:
- A vending machine management system to keep track of inventory and stock
- A vending machine management app to run your business on the go
- A high-quality and durable vending machine card reader
How to Start a Vending Business
One of the best parts of starting a vending business is how little of an investment you need to make at the beginning, especially when compared with other types of businesses. Here are the steps you’ll need to take in order to get started with vending.
Research the Market
Before you begin, it’s a good idea to research your local market. Consider potential locations for machines, as well as the types of products you might sell. Observe other machines in the area and what they offer.
Choose a Location
Pro tip: If you’re already a business owner and want to install a vending machine at your hotel, shop, or business location, you can skip this step and the next as you’ve already defined your vending machine location and most likely won’t need to sign a contract.
During a recession, it’s important to put your vending machine in a high-traffic location where it can be profitable no matter the economic situation. Some options to consider include:
- Airports – With a constant stream of hungry travelers day in and day out, airports are an excellent location for vending machines. Especially because airport food is typically so expensive, a vending machine may serve as an appealing alternative for budget-conscious travelers.
- Office buildings – As people keep a tighter grip on their wallets, office workers may be more hesitant to go out for lunch on a regular basis. An in-office vending machine can serve as an affordable source of snacks and beverages.
- Hospitals – Another high-traffic area, hospitals are a place where patients, visitors, and staff all spend extended periods of time at any time of day. When the cafeteria is closed, vending machines become the only easy option for food, guaranteeing you business.
- Schools – Students aren’t known for having a lot of money to spend, and this is only amplified during a recession. Vending machines are a classic solution beloved by students of all ages as a quick, convenient option for snacks and beverages between classes.
Sign a Contract
Once you’ve chosen the ideal location for your vending machine, you’ll have to speak to the owners or managers of the location to get permission to install your vending machine.
It’s common to share a percentage of your profits with the owner of a building in exchange for allowing you to place your machine there. Whatever the terms may be, negotiate and sign a contract that you can both agree to. You may also need to apply for permits or licenses with your local Chamber of Commerce.
Choose a Vending Machine
There are several types of vending machines on the market including snack machines, beverage machines, combination machines, specialty machines and more. Choose the type that works best for your budget and target customer. For example, a coffee machine can be a good choice for an office, or a health food machine for a gym.
Purchase or Lease a Machine
Depending on the amount of money you’re able to invest, you may decide to purchase a new or used vending machine or lease one from a vending machine company. Other options include buying an existing vending machine business or working with an established company to franchise a vending machine.
Pick a Vending Machine Card Reader
Once you’ve purchased your vending machine, you’ll need to get a vending machine card reader so that you’re able to accept cashless payments. As discussed above, you need to make sure that you choose the most reliable card reader you can find. This will keep your maintenance costs down and ensure that your machines can constantly accept payments and generate passive income for you without you having to check up on them.
Accepting cashless payments gives your consumers the option to pay with their preferred payment method so you never miss out on a sale. Nayax’s vending machine card readers are durable, future-proof, secure, and can be retrofitted on any new or existing machine. This makes them a great choice for your vending business. Learn more about our VPOS Touch and Onyx card readers by visiting our product pages.
Stock your Machine
Once you have a vending machine in place, it’s time to stock it with products that you believe will be popular in the location. You can purchase these from a wholesale supplier or independently from a local store. Stock your machine with popular products and keep track of your inventory with an inventory management system. Now you’re ready to start generating passive income with your vending machine!
Maintain your Machine
Vending machines are essentially a fool-proof business, requiring very little upkeep. The only maintenance required is cleaning, restocking, and replacing products that are close to their expiry date, and repairing any damage or technical issues.
The good news is that vending and inventory management has never been easier than it is with apps like MoMa Vending Machine and Inventory Management App and the Nayax Core Vending Management and Inventory System (formerly NayaxVend). Using telemetry technology, you can keep track of what’s going on with your machine from afar. Alerts, reports, and machine management allow you to make sure everything is always running smoothly.
With its smart, on-the-go operations management, Nayax Core helps you save time and reduce operational costs. Know exactly what your machine is running low on for seamless restocking. You’ll even receive business analytics dashboards for insights you can use to help you make smarter business decisions.
Promote your Business
While vending machines don’t typically require a lot of marketing, a little can still be helpful to promote your business with loyalty programs and other promotions.
To help you turn one-time buyers into loyal, repeat customers, Monyx Wallet creates customer engagement tools through gamification, digital loyalty programs, and rewards. Not only do customers enjoy the convenience of paying through a mobile app, but they also receive incentives to keep coming back and buying more.
Pro tip: If you run a hotel and vending machines are an additional revenue stream for your business, you can provide hotel guests with discounts via Monyx Wallet and encourage them to spend more.
Take Vending into the Modern Age
While vending as an industry has been around since the 19th century, modern technology has taken it to the next level. With tools powered by advanced technologies such as telemetry and contactless payments, business owners can optimize their vending processes to increase revenue and lower operational costs.
Cashless payment solutions such as Nayax’s VPOS Touch and Onyx meet today’s consumers where they are, allowing them to pay for their snack or beverage choice with a variety of popular options such as credit cards, mobile wallets, and NFC payments. This helps you sell more by enabling customers to buy even if they don’t have cash on them.
With Nayax’s suite of card readers, vending management apps, and customer payment apps, you can create an efficient, convenient vending business that offers the best experience to both you and your customers. Streamline your business for low operational costs while offering your customer base an affordable, convenient source of fuel.
Want to get started? Contact us today.