Vending machines make great side hustles. A gumball machine business can help you generate reasonable, semi-passive income without stealing time from your main job or business. What does it take to start a successful gumball machine business? In this post, I will explore all you need to know about launching, positioning, and stocking a profitable gumball machine business.
What Do I Need to Start a Gumball Machine Business?
The vending machine industry is a well established and reliable investment for anyone looking to start their own business, or expand their investment portfolio into a stable, consistent income stream. Gumball vending machines specifically are a great way to get started within the vending industry, as they are relatively affordable machines that can dispense items that have a long shelf life, and require minimum upkeep to maintain.
Like any other business, a gumball machine business requires a sound business plan. Below are the key things you must account for to start a successful gumball vending operation.
Set a Budget and Goals
When starting, you need to budget for the following:
- The cost of the gumball machine
- The cost of finding a good location: gas for driving around, phone bill, etc
- The cost of gumballs
The cost of the machine will consume most of your initial budget. The prices of these machines vary widely, depending on brand and capacity. Prices can range from as low as $60 to over $1,000. As a new gumball machine business owner, you should look for machines in the $60 to $250 range. Once you ascertain the viability of the business and the demand for gumballs in your locations, you can proceed to expand your business by installing bigger machines or exploring new locations.
Find Great Locations
The success of your gumball machine business hinges on your ability to find locations with high foot traffic. A gumball machine will do well in any high-traffic location where people typically have coins/spare change on them. Since a gumball machine is typically much smaller than a snack or drink vending machine, you can put it in your car/truck and ride with it around town. When you find a promising location, ask the manager or location owner to check out your machine and if they would love it on their property. This is a far more effective approach than handing out fliers. For ideas on possible locations in your area, check out our vending location service.
Find a Reliable Provider
Finding a good supplier where you can get gumballs in sufficient bulk quantities at a price that ensures you maintain your target profit margins is essential to the success of your gumball machine business. While Costco and Sam’s Club are great suppliers, you should check with other wholesale suppliers in your area before you make a decision as well as online marketplaces such as gumball.com.
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You should not be bound to one supplier for your entire product line. Where it makes sense, you can even comparison shop in nearby towns/cities when you want to buy products in bulk.
Branding and Marketing
Most vending machine businesses operate without any kind of differentiation. You want to go against the grain and make your gumball machine business memorable. When you have several locations in your area, branding will help customers recognize your gumball machine company and make them even more likely to buy from you wherever and whenever they encounter your machines. Customers prefer to buy from brands they know and trust.
Branding will also help your marketing. You must have a two-pronged approach to sales and marketing. You want to court both end consumers of your product and potential location owners/managers. Location owners will take you more seriously when your business has markers of a legitimate operation, such as a business name, distinct brand graphics, a web presence (think website, social media, etc.), and an easy way to reach you by phone or email.
Restocking Schedule
Having a system for monitoring inventory levels and maintaining a restocking schedule is essential to running any vending machine business. The frequency of your restocking runs will depend on the capacity of your gumball machines and how fast the products move. You can have a daily, bi-weekly, weekly, or monthly restocking schedule, depending on how fast the gumballs sell. Gumballs have a shelf life of up to one year - you can buy them in bulk and keep them in your house/warehouse to make restocking runs much more seamless.
You can couple your restocking schedule with your maintenance schedule. A maintenance schedule helps you reduce downtime due to unresolved mechanical problems. It will also help you save money on repair costs and keep customers you would otherwise lose due to unplanned downtimes.
What Type of Gumball Machine Options Are Available?
Gumball machines are available in a wide range of configurations and styles, the most common being U-turn machines. They come in several sizes and designs, and the kind you buy will depend on your target locations and the gumballs you want to sell. The most common gumballs in vending machines are 1-inch gumballs, of which the assorted variety sells the best.
You can sell both candy and gumballs from one location. For this, you will need a machine with a gumball dispensing wheel and a candy dispensing wheel. The difference between the two is the shape of the hole through which the products are released. The wheels are mostly interchangeable such as for the Titan line of machines.
Based on design, you will find the following kinds of gumball machines available on the market:
Tabletop Gumball Machines:
Tabletop Gumball Machines can come in a wide variety of shapes and sizes, and are designed to fit compactly on a surface available to customers. These machines tend to be the most popular in small retail locations or office locations. For a reliable tabletop vending machine to start, the Titan Square allows for a wide range of customization if you are looking for a machine to test out various single dispensing items.
Single, Double, or Multiple Head Gumball Machines:
Multi-head gumball machines are multiple tabletop style gumball machines combined together into a single unit, and typically mounted on a secure stand. These are typically the most commonly seen and utilized style of vending machines due to their durability, and flexibility in product offerings.
Multi Head vending machines allow you to operate multiple single operating vending machines all in one single device, allowing customers to have a selection of items to choose from per machine. These style of machines perform well in locations such as laundromats, hotels, and small retail locations.
Gumball rack vending machines are incredibly durable, so occasionally you can find them available for sale on marketplace websites, but generally we suggest buying a brand new machine if you are planning long term with your vending operation. The Titan 6 is a great machine for anyone who has secured an ideal location and wants to maximize potential profits.
Spiral Gumball Machines:
Spiral Gumball machines are widely recognizable and popular styles of gumball machines, where purchased gumballs travel down a roller coaster style spiral to the dispensing slot. These machines offer a unique attraction and novelty for a vending machine, so if you are looking to place a single gumball machine at a location and space isn't an issue these make a great choice; especially for locations with high foot traffic for families such as doctor offices and amusement locations.
For buying a brand new spiral gumball machine, we would suggest going with a 5' model such as the Spiral Spin from LYPC, as these tend to be highly reliable machines.
Are Gumball Machines Profitable?
Gumball machines generally have higher profit margins than standard snack and drink machines for the following reasons:
- Benefits from bulk purchases. Vendors typically buy gumballs in bags by the pound and sell them at a significant markup. For about $50, you can get a box of 850 gumballs - about 6 cents a piece. Selling the gumballs at 25 cents a piece means you have a markup of about 300% with a gross profit margin of 75%.
- Gumball machines are easy to maintain. Unlike snack and drink vending machines, gumball machines require very little maintenance. Further, you can handle most repairs yourself without having to call a technician.
- Minimal logistics cost. It doesn’t cost much to transport and store gumballs. Compared to snack and drink machines, expenses on fuel, handling, packaging, and labor are nominal.
The overall profitability of your gumball machine business will depend on how many locations you have and the number of gumballs you can sell per month. While you have a higher profit margin per gumball sold, someone running a standard drinks machine can make more money than you based purely on the number of drinks sold. You, therefore, need to have several gumball machine installations in high-traffic locations to make a reasonable livable income out of the business.
To ensure the profitability of your gumball machine business, do the following:
- Put your gumball machines in high-traffic locations
- Cater to different tastes by having a variety of gumballs
- Consider stocking specialty gumballs as they may attract more customers than the typical brands always available in your local store
- Invest in a quality machine and even tastier gumballs
- Do promotions and offer discounts to attract new customers
- Price gumballs competitively
- Brand your gumball machines - people familiar with your brand in your area will buy from you wherever they encounter your branded gumball machines
- Ensure the machine is always stocked - never have a stockout
- Address customer complaints promptly
- Keep the location owners happy by paying your commissions on time
- Consult with other vending machine operators to learn what works in your area
- Follow all state and federal guidelines to avoid fines that may eat into your earnings
- Buy gumballs in bulk to lower the cost of goods sold
- Rotate gumball machine brands to figure out what customers like the most
- Get a good deal on a gumball machine to reduce your initial investment, thereby reducing your payback period
What Are Good Locations for Gumball Machines?
The best locations for gumball machines are high-traffic establishments where people tend to have coins/spare change on them. The more foot traffic, the higher the probability that you end up with a profitable gumball machine business. You want at least 50 people visiting the location daily. You should prioritize getting into locations such as grocery stores that attract hundreds of different kinds of people daily throughout the year.
Aside from foot traffic, you should also evaluate the level of security at the said location. You want your gumball machine indoors, where it is shielded from the elements and where it is out of reach of vandals outside business hours. Also, it will help if the machine is within the field of view of a security camera.
The following are good locations for gumball machines:
- Malls
- Grocery stores
- In shops facing walkable main streets where the machine is visible from the street
- Train and bus stations
- Waiting lounges, such as those in hospitals, government offices, airports, etc
- Playgrounds
- State park facilities
- Public swimming pools
- Restaurants
- Car washes
- Autoshops
- Large apartment complexes and communities
- Amusement parks
- Schools
- Bowling alley
- Roller staking rinks
- Tourist attraction sites
- Movie theaters
- College campuses
- Casinos
You can find these locations by driving around. Get in your car, drive around your area within a 30-mile radius, and note down locations with decent foot traffic. You don’t want to go too far from your home because you want the gumball machine to be at a location where restocking and maintenance runs are bearable. Alternatively, open the Google Maps app and note down all the establishments in your area that are likely to attract lots of foot traffic. In any town or city, you likely have grocery stores, shopping districts, state parks, government offices, restaurants, car washes, and many other potential vending locations.
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