If you’re looking for a profitable business model to get into, you may want to consider the vending industry, which is projected to reach $146.6 billion in revenue by 2027. In this article, we’ll explore the revenues and costs you can expect if you enter the vending machine industry, as well as some ways to maximize vending profit.
Getting Started & Initial Costs
Before you buy your first machine, it’s important to understand the initial costs involved. Vending machines can cost anywhere from a $1,200 for a refurbished machine to $10,000 for a new, high-end one.
You’ll also need to factor in additional costs such as:
- Supplies – Vending machine items like snacks, drinks, and coffee
- Vending machine management and maintenance – Repairs, restocking, and cleaning
- Insurance – A must-have to protect your business from liability and potential damages
Understanding the initial costs and carefully selecting the right vending machine are crucial steps in building a profitable vending machine business.
How Location Affects Profit
Location is a critical factor in the success of a vending machine business. Placing your machines in high-traffic areas with a steady flow of potential customers can significantly increase your sales and profits.
Some of the best locations for vending machines include:
- Busy offices
- Shopping malls
When choosing a location, it’s important to consider the demographics of the area, the foot traffic volume, and the types of products that will be most in demand. If you’re planning to run a specialty vending machine, this may also influence your choice of location. For example, health and beauty product machines are great for places like airports and hotels, while health food machines may see the most success at gyms.
How Cashless Payments Affect Profit
The same as location, the payment methods you accept can also affect costs. In today’s digital age, cashless payment systems have become increasingly important in the vending machine business. According to CU Tech Hub, have shown that adding cashless technology to vending machines can boost revenue by as much as 35% on average over an 18-month period. In fact, low-performing machines making less than $2,000 in sales per year saw even bigger improvements, with cashless technology boosting their top-line sales by 110% on average. Some vending machine business owners have made as much as $30,000 a month with Nayax’s cashless payment solutions.
This is because cashless payment systems offer a number of advantages, such as convenience, speed, and security. They also allow customers to make purchases even if they don’t have cash on hand.
It’s easy to accept cashless payments with the right vending machine card reader. Onyx can be easily retrofitted onto any machine and allows you to accept all of the most popular forms of cashless payment, including debit cards, credit cards, mobile, and NFC payments. And if you’re in an area where contact payments are still common, you can easily install the VPOS Touch and accept insert payments as well.
How to Increase Sales with Loyalty Programs
Customer loyalty is another critical component of any successful vending machine business. Loyalty programs offer a range of benefits to customers, such as discounts, rewards, and exclusive promotions, which can encourage them to make repeat purchases and recommend your machines to others.
And the results are significant. Members of loyalty programs generate 12-18% more incremental revenue growth per year than non-members, and top-performing loyalty programs can boost revenue from customers who use them by 15-25% annually.
Thankfully, implementing a loyalty program in your vending machine business can be quite straightforward. Monyx Wallet is an easy-to-use payment platform and consumer engagement app that helps increase engagement and sales through loyalty rewards and promotions. See how you can use these solutions to personalize your vending machine offer and increase your profits.
How Much Money Can You Really Make?
So, let’s get to the nitty gritty. How much money can you really make running a vending machine business?
According to industry data, the typical vending machine generates over $75 of revenue each week and over $300 per month. When you take into consideration how low the overhead is – and the fact that a single vending machine owner can operate an entire fleet of machines in their area – this profit can add up considerably.
However, it’s important to know that these numbers can vary significantly depending on a number of factors. As we’ve mentioned above, the location of the machine is crucial, as well-placed machines in high-traffic areas tend to generate more revenue than those in quieter locations. Another critical factor is the type of products offered. For example, vending machines following some of the recent vending industry trends, such as offering healthy choices, personal care products, and eco-friendly solutions, may be able to get an edge on the competition.
Some vending machines therefore generate much less than the average, while others generate much more. The more well-placed and well-stocked machines an owner operates, the greater their profits and revenue. It’s also worth noting that implementing strategies such as cashless payment systems and loyalty programs can help increase revenue and profitability in the vending machine business.
How to Scale Your Business Once It’s Profitable
Once your vending machine business becomes profitable, it may be time to consider expansion. Adding more machines can help increase revenue and profits, but there are several factors to consider before doing so.
Inventory management becomes increasingly important when managing multiple machines, as does regular maintenance to keep them in good working order. It may also be necessary to hire additional staff to help manage and restock the machines. Investing in software and tools that help manage inventory, track sales, and monitor maintenance needs is highly helpful in scaling a vending machine business and staying on top of things.
NayaxVend is a management and inventory system for vending machines that comes equipped with advanced features allowing you to manage an entire fleet of vending machines from afar. With alerts, remote inventory management, and a smart dashboard, NayaxVend can help you manage your machines with ease while boosting profit. MoMa 2.0 is a vending machine and inventory management app fully synced with NayaxVend that allows you to track machine profit and performance from any handheld device to reduce operational costs and maximize revenue.
Start a Profitable Vending Machine Business Today
If you’re looking for a profitable business with low overhead that you can easily maintain, vending machines are well worth considering. You can maximize your revenue by choosing locations wisely, offering cashless payments, and adding loyalty and engagement programs. With the right solutions and tools, it’s easy to optimize your vending business and make a great profit.
To learn more about Nayax’s smart vending machine solutions, contact us today.