The hallmark of successful vending machine businesses is profitability. The combination of low start-up costs, low maintenance costs, minimal requirements for employees, and the wide selection of machine types and products lead many people to consider the benefits of a vending machine investment. Below, we’ll discuss the most popular types of vending machines, which ones are the most profitable, and how profitability can be maximized by new and established vending owners.
What are the Most Popular Vending Machines?
Most people aren’t aware of just how many vending machine types there are to choose from. Advancements in the industry have allowed specialized businesses to make use of vending machines, such as car washes and laundromats, in addition to the standard food and beverage machines that have been around for years. Even specialty items like hygiene products, beauty products, and PPE can be purchased from vending machines. What vending machines do consumers make use of the most?
Snack Vending Machines
Snack vending machines are one of the original vending machine types. These vending machines tend to offer the most popular snack products such as chips, candy, chocolate bars, and other sweet treats. However, a focus has recently been placed on providing healthier options in snack machines, and they are now commonly stocked with granola bars, yogurt, fresh fruit or dried alternatives, veggie/dip combos, and more.
The ability to grab a quick snack on the go is the main reason snack vending machines are so popular. You can find them in just about every location where vending machines are allowed to exist. Whether a machine is stocked with healthy snacks or focuses on selling snacks that can satisfy a sweet/salty craving, they are sure to succeed in any environment.
Beverage Vending Machines
Most drink machines will stock sodas and non-carbonated drinks like iced tea and water. However, hot beverage machines are also quite prevalent in the vending machine industry: they can be limited coffee machines, or they can offer a versatile selection of coffee, tea, hot chocolate, ciders, and more. There are also cold drink machines that cater to health-minded individuals and stock items such as zero sugar beverages, sports drinks, protein shakes, and more.
Soda machines and other types of beverage vending machines are commonly paired with snack machines to provide customers with the opportunity to satisfy all of their needs in one place. Despite the more intensive management process for this type of machine, they are still very popular choices for vending machine business owners due to the high profit margins and low risk of failure; these machines also succeed in pretty much all locations just like snack vending machines.
Meal Vending Machines
Meal vending machines offer a wide range of meals to customers including pizza, hotdogs, burgers, salads, sandwiches, burritos, and more. These machines are popular in locations such as hospitals, offices, and university campuses. The ability to grab a full meal for a cheap price is highly valuable to people that don’t have the time to go to a regular sit-down or fast food restaurant or are closely watching their spending habits.
Since vending owners can count on them being highly profitable in the right location, they are a very common addition to a vending machine business once the operator has some experience in the industry. They do require more stock rotation than other vending types, but the popularity with customers and the income generation make the extra time investment worth it.
Vape and Cigarette Vending Machines
Specialty retail vending machines that target adult populations with vape and cigarette supplies have quickly become one of the most popular types of vending machines. Cigarette Vending Machines aren’t allowed in all businesses (excluded from shopping malls, for example), but in adult-rich environments, they can be very successful.
Costs associated with these machines will be higher, as the technology for higher security will elevate the price of the machine, and the products themselves are more expensive to purchase in bulk. However, the profitability of these machines is still excellent due to their popularity and higher price tags of the product selection during resale. People who buy these products from vending machines will likely continue buying from them regularly; these machines generate a pretty loyal consumer base.
A Financial Glimpse of the Vending Machine Market
The vending machine market in the USA is much larger than most people realize, and the majority of the industry—two-thirds to be exact—is composed of small business owners. Unlike most other industries, no vending machine business owner controls more than 5% of the market.
Big-name companies like Pepsi and Coca Cola will own the largest share percentages of the market, but they still can’t compete with the thousands of vending machine owners with small-scale operations of one or two machines. The highly profitable vending machines generate roughly $600 in profits each month, but vending machine sales can also be as low as $75 per month.
Evidently, there is a lot of variability in the vending business market. Vending machine operators may have a single vending machine or as many as 20+, and their vending machine profit statistics will vary greatly as a result of many factors. To predict profit margin for your specific case, it's best to use a profit calculator.
The two million vending machines currently operating in the country generate roughly 7.4 billion dollars in revenue each year. When you consider this revenue in comparison to the adult population in the country, you can estimate that the average consumer is spending $35 on vending machine products each year. The average vending machine owner earns less than one million in income each year.
On a global scale, the vending machine industry is comprised of 15 million machines. Considering one-third of the global vending machine market is located in the United States, new vending machine operators are walking into a fairly saturated market, but one that is still growing each year. With a compound annual growth rate estimated at around 10% (with projected growth continuing into 2030), now is the best time for starting vending machine business ventures.
What Vending Machines Make the Most Money?
In some cases, popularity is a good indicator of vending machine business profitability, but less popular machines can sometimes be a better choice for the vending owner depending on their location options and target audience. Let’s take a look at the vending machines with the highest profit potential for your vending machine business.
Bulk Vending Machines
Bulk vending machines have the highest earning potential of any other vending machine type out there. This is because they don’t rely on electricity or battery power; instead, they are simple mechanical devices that come with minimal maintenance and no utility costs.
Buying Cost
Bulk vending machines cost on average $500 to buy. They can range in price from $50 to $2700, but they are generally much more affordable than any other type of vending machine. For example, a brand-new gumball vending machine costs only $100. The prices are so low for these machines because they don’t need to be powered to accept payment or manage the inventory: they accept coins only with a mechanical dispensing system and stock products that don’t require temperature regulation.
Maintenance Cost
Since bulk vending machines don’t require electricity for anything, their internal systems are much simpler than traditional vending machines and are much easier to maintain as a result. Maintenance services for bulk vending machines will be extremely low cost and won’t be required too often. Still, you want to keep these machines well-maintained and not completly set and forget.
Expected Average Sale
Items in bulk vending machines are priced incredibly low, usually less than $1. The average transaction amount is only 25 cents; some families may use the machine multiple times in order to provide candy to all of their children, but in most cases, each individual will only spend a quarter at a time.
Profit Margin
Despite the incredibly low purchase price for each item, bulk vending machines bring in the best profit margin for vending machine business. A bag of 850 gumballs can be purchased for as little as $35, and this is enough product to completely fill the machine. When all of the gumballs are sold for 25 cents each, the vending owner has earned $200. This is a 570% return; you won’t find profit like that with any other vending venture.
Ice Vending Machine
Ice vending machine supplies full bags of ice to consumers. Ice vending machines are very popular in different locations. For campers and beach goers that need to stock up on ice to keep their food fresh, as well as general shoppers that prefer a contactless way to get ice for home use. That's also what makes an ice vending machine business a popular choice for vending machine owners. The vast majority of ice vending machines will be located outside of grocery stores, convenience stores, and gas stations. These machines will have the highest purchase prices but are also some of the easiest to operate/manage.
Buying Cost
On average, an ice vending machine will cost your vending machine business roughly $20,000. The initial investment is substantial, as these are massive machines that are typically placed outdoors and need to manage a high volume of large items. At their most valuable, ice vending machine will cost close to $100,000. As a result, vending buyers will need to pay a lot of money upfront to break into the ice vending machine industry.
Maintenance Cost
Due to the high output of ice vending machines and their minimal maintenance requirements, vending machine operators won’t have to spend too much of their profits on maintenance and servicing costs.
The component that is most likely to require repair is the payment system, as they tend to accept cashless payments in addition to cash and coins. The water line and refrigeration equipment are fairly durable and reliable in these machines and won’t need maintenance very often, especially when a high-quality machine is purchased.
Expected Average Sale
Most people who purchase ice from a vending machine will buy one or two bags at a time, meaning the expected average sale will hover between $1.50 and $3.
Profit Margin
In water and power costs, a 10 lb bag of ice only costs your vending machine business 25 cents. Since each bag will sell for roughly $1.50, that’s a pretty great return at 600%. If the vending machine is operating at max capacity (75 bags a day), only 15 bags will be required to break even, and the rest will be 100% profit.
Cold Food Vending Machines
Cold food vending machines serve healthy foods such as sandwiches, wraps, breakfast burritos, salads, and more. They may also contain frozen foods. Their typically perishable stock does require more management than other vending machines - just like ice cream vending machines - but the meal-replacement function of these machines makes them incredibly popular with customers and profitable for vending machine business owners.
Buying Cost
Cold food vending machines will cost several thousand dollars to purchase when new. They are fairly complex machines that are usually equipped with smart payment systems like card readers, and their refrigeration and temperature control systems are sophisticated and more expensive. Due to their popularity, though, many models can be purchased as refurbished machines to help lower the initial cost.
Maintenance Cost
Maintenance costs will be higher for cold food vending machines than most other styles. Due to the intricate refrigeration system, temperature control technology, and more advanced payment systems (card reader, cash/coin readers), these machines will require more frequent maintenance than other vending machines and will require trained experts.
Expected Average Sale
The products in a cold food vending machine will range in price between $1 and $10. Since most of the products in these machines are full meals, most individuals will only purchase one item. However, machines that offer desserts in addition to food items may generate extra revenue per customer sale.
Profit Margin
Due to the more sophisticated nature of the products in cold food vending machines, and the card readers they are typically equipped with, markups on items can be fairly high. This is especially true in busier locations where people don’t have access to other food options. Vending owners can expect to make a few dollars in profit for each item they sell.
Snack and Beverage Vending Machines
Food and beverage vending machines make up roughly 30% of vending machine markets across the globe. They are the cornerstone of the vending industry and are the best vending machines for new business owners: the passive income is pretty much guaranteed, and stock rotation isn’t as important as with cold food/fresh food vending machines.
Buying Cost
Snack and beverage machines will be fairly pricey to purchase. They average between $3000 and $5000, but those with more advanced technology can cost as much as $10,000. These machines are commonly found as refurbished models as well, though, to help offset costs if you aren’t set on a brand-new machine.
Maintenance Cost
The maintenance costs of snack and beverage vending machines will be fairly similar to cold food vending machines. Not all snack machines will be refrigerated, for example ones that only sell chips, candy, and chocolate bars, but snack machines that sell fresh snacks and all beverage machines will have the same refrigeration and temperature control systems as cold food machines. As a result, maintenance needs will be more regular, and repair costs will be higher, typically requiring the assistance of a professional.
Expected Average Sale
Snacks and drinks in vending machines typically cost between $1 and $3. Most consumers will only buy one snack, but this is not necessarily a given. Many families, college students, and others will be paying for multiple items from a snack/drink vending machine within the same sale, especially if they have access to multiple categories of desirable snacks/beverages within a single machine.
Profit Margin
Items in snack and drink vending machines will typically be marked up by 300-400%. For example, a water bottle may cost only 50 cents, but it will sell for two dollars. Bags of chips may cost 35 cents each but can be priced at $1. These aren’t the highest profit margins in the vending industry, but the higher sales volume can help combat the lower revenue per item.
Most Profitable Vending Machine Locations
When ironing out a business plan for a new vending business (or one that is ready to expand) one of the key factors to consider early is where to place vending machines for the most success. The vending site can truly make all the difference when it comes to success and profitability. Below, we’ll outline the best locations for profitable vending machines whether you want your machines to be located in a highly public place or somewhere a little more private.
Airports
Market research has proven that airports are one of the best locations for profitable vending machines it is possible to find. For the most part, airports are open 24 hours a day, 7 days a week, and there are thousands of people making their way through the airport every day. Airports allow you to target your vending machines to people from all walks of life, and they will be keen on buying snacks, drinks, or even toys for their children without waiting in long lines or paying expensive airport prices.
Another thing that makes an airport one of the best locations for a vending machine is the versatile site options. The immense size of the average airport means it can house many, many vending machines at a time without causing too much competition between them. As a result, it won’t be as difficult to acquire a site as it would be in smaller, less versatile spaces. You’ll be able to get your vending machine running faster and start earning profits with minimal downtime.
Hotels/Motels
Hotels and motels are another incredibly good location for profitable vending machines. They see a wide range of people on a daily basis, and the constant turnover ensures there is always someone in the building that can become a customer. Many hotel/motel guests won’t want to make the trip to a restaurant for a meal and may also prefer to skip any dining options the establishment offers.
Placing vending machines in the lobbies, on each floor, and next to other amenities such as ice machines, gyms, and pools is the perfect way to set up a vending business for success.
Office Buildings
Many office workers have gotten away from packing their own lunches and instead choose to go out for lunch or order in delivery for the team on special occasions. However, this can get expensive pretty quickly, and they may not always have the time to leave the building for a meal. As a result, profitable vending machines do very well in office buildings.
As long as there are 50 or more regular employees in the building each workday, vending machine owners can earn a tidy profit. Whether they provide snacks, cold drinks, or full meals, it is more than likely that multiple people will take advantage of the offerings each day. Plus, they will appeal to delivery people, maintenance staff, and other groups that help improve machine profitability.
Shopping Centers
Shopping centers are great locations for vending machines for one main reason: foot traffic. The sheer volume of people that visit a mall or other shopping center ensures the vending machine will reach tons of potential customers. Since shopping can work up an appetite and parents may need to appease children, vending machines can become incredibly profitable in these locations with the right stock.
Apartment Buildings & Complexes
Apartment complexes are another fantastic location for guaranteeing a profitable vending machine. Not only do the residents of the apartment buildings have access to the vending machines every day, but most individuals will walk past the machine twice a day, if not more. Plus, any visitors they have will also be exposed to the vending machine and have the potential to become a customer. Apartment lobbies are great spaces for vending machines for that reason.
Many apartment complexes have amenities such as gyms, pools, communal laundry rooms, party spaces, and more. Each space can be a profitable location for a vending machine since they offer decent foot traffic and will likely be frequented by the same people on a regular basis. Outdoor amenities may also be visited by other community members, further improving the reach to different customers and the overall profitability of the machine.
Industrial Buildings (Warehouses, Manufacturing Facilities, Etc.)
Manufacturing plants, warehouses, distribution centers, and other facilities in industrial parks are all highly rated locations for vending machines. Most of them are staffed by rotating shifts 24/7, and the employees often don’t have time to go out for snacks or meals on their shorter breaks.
Vending machines in these spaces not only provide hundreds of people with access to food and drinks throughout their shifts, but the income is also fairly steady. Once the workers know what the vending machine has to offer, they are likely to purchase items on a regular basis. One major component of vending machine profitability is the consistency of purchases, and industrial buildings offer excellent reliability in that way.
Hospitals
Hospitals and other medical centers are some of the most popular sites for vending machines. They are open 365 days a year and do not ever close their doors to the public. They are staffed by hundreds of employees each day and will reach a massive customer base when you factor in the employees, the patients, the visitors, the maintenance staff, the volunteers, and more.
Hospitals are also one of the most versatile locations for a vending machine business. They are usually immense, multi-level facilities that offer countless locations for profitable vending machines indoors and out. Plus, with the broad range of people available to purchase items from the machine, every machine type can find success. Meal/cold food vending machines, snack vending machines, cold or hot beverage machines, and specialty retail machines all have a place in a hospital. The potential for exceptional profits in this kind of environment speaks for itself.
Long-Term Care Facilities
Nursing homes and other long-term care facilities are excellent sites for profitable vending machines. These facilities are home to many individuals at any given time, and most of them will have visitors at least on a weekly basis. Vending machines offer them a nice break from the facility’s food, and they provide quick snacks and drinks to family members and friends that visit. These facilities provide a steady stream of income for vending owners, and they can find success with pretty much every product type.
Long-term care facilities boast another potential revenue source as well: the employees. Most workers in these facilities work long hours with short breaks, and this combination is perfect for increasing vending machine sales. Since there are people up and about at all hours of the day and night, these locations are undeniably lucrative for vending business owners.
Car Dealerships
There are a number of advantages offered by car dealerships when it comes to starting and expanding a vending machine business. The vast majority of dealerships will be one member of a larger dealership family; as a result, developing a relationship with one dealership will offer avenues for expansion down the road.
When it comes to the actual profitability of a vending machine in a dealership, there are a number of factors that make them incredibly successful. Almost every dealership is also equipped with a service center, and the wait time for a vehicle may be as long as 3 hours. Customers that choose to wait for their car would likely make use of a vending machine that is offering a snack or cold drink, to help pass the time.
Additionally, people who go to dealerships to look for a new vehicle will likely spend at least a couple of hours there browsing and talking to a salesperson and would be presented with the opportunity to purchase a vending machine item on a number of occasions.
In addition to the high foot traffic from customers at the dealership every day, vending machines also serve the employees that work there. Since they will often work extended hours and may not have long enough breaks for a restaurant run, a vending machine may become their ideal source of cold drinks, fresh snacks, and delicious meals.
Gyms & Other Fitness Centers
The fitness industry in every city is saturated with public gyms and other fitness centers. They are one of the most profitable locations for vending machines, but not every stock type fits in well here. Since people are at gyms to get fit and healthy, they won’t be too pleased about soda machines or unhealthy snacks in food vending machines.
However, they are a prime location for vending machines that offer healthy snacks, protein shakes, electrolyte-balanced beverages (sports drinks), and even specialty items like towels, deodorant, and more. These items will be highly appreciated by gym goers and employees alike, and vending machine business owners will receive a pretty good income from them since they can be marked up more than standard vending items.
Whether vending machines offer unique retail items, a quick snack to fuel a workout, or a healthy meal and drink to refuel after pushing physical limits during their training, the profits are sure to roll in. Plus, gym members will become steady customers in more cases than not, guaranteeing a reliable income stream.
Schools (All Age Groups)
Whether vending machines are placed in middle schools, high schools, or on college/university campuses, the potential for earnings is quite high. Students have healthy appetites and short lunch breaks, and there may be days when parents just don’t have time to make a packed lunch for their kids. Healthy vending machine options can be a great comfort to them. They also provide teachers with healthy snacks, drinks, and meal options between classes.
College and university campuses offer even more flexibility than lower-level schools. Dorm rooms, libraries, and other facility buildings are great locations for vending machines that can help fuel late-night study sessions or to boost performance before a sporting event or exam.
How to Maximize Vending Machine Profitability
No matter what type of machine a vending owner has or where it’s located, there are some things that they can do to improve the profitability of their business. When you take a look at the most profitable vending machines in any category, they will likely have most or all of these things in common.
Payment System
While vending machines were originally designed to be operated by coins only, they advanced to more sophisticated cash and coin readers, and modern vending machines are equipped with entirely cashless payment systems. Whether they operate with debit/credit card readers or are compatible with mobile payment systems, people in today’s world want convenient payment methods even for their vending machines.
Purchasing new machines that are equipped with cashless payment options and upgrading older vending machines to the current standard is a great way to improve the profitability of your vending machine business. Most people don’t carry coins or paper money anymore, and vending machines that don’t offer card readers or mobile payment options may not be able to use the machine at all.
Essentially, the easier it is for people to pay, the more often you’ll see potential customers committing to the purchase. Meeting the demand for accessible payment systems can make a world of difference when it comes to the machine’s success.
Product Type/Diversity
Product diversity is the key to a popular and profitable vending machine business. This holds true for a single vending machine or multiple machines in one area. For example, putting a snack machine and drink machine together will generate more profits than two snack machines side by side; people who walked over for a drink may grab a snack to pair with it, and vice versa. Two of the same type of machine, however, will end up competing with each other and lowering the profitability of both.
Offering a range of products within a single machine can also help vending owners maximize their profits. Catering to every individual as best you can is the only way to maximize the number of people that are making a purchase. Not only does a diverse product selection increase the number of people that are buying from your machine regularly, but it also gives them more options to purchase multiple items at one time.
Inventory Management
Inventory management is a significant component of a vending machine’s success. It doesn’t matter if you’re placing vending machines in high traffic areas if there isn’t any stock in them for people to actually purchase. Keeping a close eye on the stock levels in your machine is essential for maximizing profitability.
In addition to maintaining high stock levels, inventory management also involves the decisions behind product selection. Certain products will sell better than others, and if certain items are not selling at all, it is important to remove that item from the selection and replace it with a different one. A machine full of highly desirable items will make a lot more money than one full of items that people don’t really want.
Cleanliness/Maintenance
Although we’re all told growing up not to judge a book by its cover, we still all judge a book by its cover. The same concept applies to vending machines. A dirty machine will not be appealing to potential customers, and any visible signs of disrepair will be a significant deterrent as well. Keeping up with the maintenance and outward appearance and cleanliness of your machines will help attract customers and generate more income.
Similarly, vending machines that don’t function properly may attract customers, but you can bet they won’t ever use the machine again if their first payment method was declined or their item got stuck. While they can call the service line for assistance with these issues, they likely won’t be interested in purchasing anything from that machine in the future. Keeping up with maintenance to ensure the machine is always functional will encourage repeat business and improve profitability.
Hours of Operation
Just like any other business, the number of hours that people can access the vending machine will impact how much profit your vending machine business will earn. In more secure environments like malls, your hours of operation may be limited to mall hours. In this case, the high foot traffic would make up for any lost sales due to overnight closures, but not every location (even other retail shops) will offer that benefit.
Most vending owners choose to leave their vending machines open to the public 24/7, and if your hours are currently limited and your profits aren’t where they should be, extending the public’s access may be the easiest way to increase the profitability of the machine. Unless the property owners are dictating your hours, it is best to let people purchase items any time of the day or night.
Marketing Efforts
Many people new to the vending industry don’t understand that marketing is still an important step in starting their business. After all, if people don’t know about a new vending machine, they won’t be able to use it. Posting about your vending machines on social media and accounting for the importance of word-of-mouth advertising is a sure way to improve profits.
Marketing doesn’t only have to occur online or through person-to-person contact, either. There are a number of companies out there that can create custom skins for your vending machine to improve its aesthetic appearance and encourage consumers to approach and check out what’s on offer.
If you find that business is fairly slow for your new or established vending machines, it may be worth talking to a wrap company or two to create a new and engaging design for your vending machines, as well as investing some time in social media marketing.
Wrapping Up
Whether you are interested in starting a vending machine business of your own and joining an industry of entrepreneurs or you just want to learn about what makes a vending machine business profitable to improve an existing venture, we are confident that this guide has armed you with all of the knowledge you need to find success. When you understand what goes into a profitable vending machine business and implement the necessary strategies, you are sure to have a bright future ahead in the industry.
