Toys play an integral role in kids' development. Besides being a source of great joy, they help kids build motor, social, creative, concentration, and problem-solving skills. Luckily, many toys are affordable, and you can easily find them in local retail spots, including vending machines. Toy vending machines combine the eternal delight of toy shopping with today’s need for convenience. This post is about the various types of toy vending machines for kids and adults and how you can make a business out of them.
What Are Toy Vending Machines?
Toy vending machines are vending machines that automatically dispense toys or rewards. Some toy vending machines also dispense tickets that a buyer can use to redeem a reward elsewhere. Japan and the United States are the biggest markets for such machines. In Japan, the most popular toy vending machines go by the name “gashapon” (also referred to as “gachapon”). Bandai, a Japanese toy manufacturer, holds the trademark for “gashapon” in many territories, including Japan, the United States, China, the United Kingdom, and the European Union.
What Are Capsule/Gashapon Vending Machines?
Capsule or gashapon vending machines are automatic machines that dispense small art pieces and toys measuring about one inch. Japan has a huge selection of small toys, art pieces, and action figures, making it an ideal market for thriving capsule/gashapon vending machines.
The name “gashapon” derives from the sound a toy vending machine makes when the handle is cranked (gasha/gacha) and the sound the toy or capsule makes (pon) when it lands on the collection tray. They work much like most of the small vending machines you see in the United States selling cards, candy, gumballs, etc.
A gashapon can be set to dispense predetermined toys and trinkets where a buyer knows exactly the product they are buying or set to facilitate blind purchases where products are released randomly. The randomness can be part of the attraction as users can’t wait to find out what toy or trinket they get served.
What Types of Toy Vending Machines Are There?
Depending on the design and products available for sale, you can find a variety of toy vending machines in the market today. Below are some of the most popular kinds of toy vending machines.
Capsule-Toy Vending Machines
These are the most popular kinds of vending machines. They sell collectibles and toys in small capsules. They are popularly known as “gashapon” and are very popular in Japan. Bandai, a Japanese company, licenses its trademarked toys in many markets, and you can find several sellers selling “gashapon” toys and collectibles in the United States and Europe. You will usually find these products in U-turn-style toy vending machines.
Claw Vending Machines
Claw vending machines, also known as crane claw cranes or crane games (nothing to do with Crane Merchandising Systems), are upright vending machines with a crane/claw controlled by a joystick that a buyer can use to claw prizes, toys, and other trinkets after inserting a coin. Sega’s UFO Catcher, popular in the United States in the 1980s and 1990s, is an example of a claw vending machine.
In some jurisdictions, claw vending machines are regulated under gambling laws as the grip of the claws is often rigged to favor the house. Asian countries such as Japan and South Korea are the biggest markets for claw vending machines.
Prize Redemption Vending Machines
Prize redemption vending machines dispense coupons and tickets that can be redeemed for specific prizes. A customer gets such a ticket or coupon from the vending machine after paying and completing the task assigned by the machine. Such vending machines are usually stationed in amusement parks and game arcades.
Prize redemption vending machines are meant to be fun gaming machines and may test various skills such as timing, speed, and accuracy. For instance, BMI Gaming’s Shoot It Win It gives players a shooting gallery-style game where the player has to shoot six cork pellets put below six prizes, and the player has to shoot a cork to get the corresponding prize.
Interactive Game Vending Machines
Interactive game vending machines offer users gamified experiential vending where users can win a prize after completing a task. Modern interactive game vending machines come with touch screens, giving players a much better user experience and immersive gameplay.
Brands are increasingly using interactive game vending machines for promotions and brand activations. For instance, a brand may run interactive vending machines where people:
- Make a social media post with the brand’s hashtag using the vending machine’s touchscreen to win a prize
- Scan a QR code to complete a customer survey to win a prize
- Fill out a form on the machine’s display to win a prize
Given the many integrations technology now allows, interactive game vending machines offer companies many opportunities to connect with existing customers, increase brand awareness, and collect data. For instance, integrations with platforms such as Facebook, Instagram, and X (formerly Twitter) can allow a brand to get in front of new people via newsfeeds of friends and family members they already follow and trust by simply nudging their vending machine users to share a social media post.
What Types of Toys Do You Stock in a Capsule Vending Machine
Any toy that can fit in 1” capsules is a great candidate for a capsule vending machine. The kind of toys you stock in your capsule vending machine will depend mostly on your market and target demographic. You can always get creative and test various offerings until you find something that is a hit.
That said, there are standard small toys that are likely to do well in many markets, including:
- Animal toys, especially of household pets (dogs, hamsters, cats, etc.)
- Alien capsules
- Rubbers/ erasers in the shape of animals
- Balloons
- Bracelets
- Necklaces
- Hair bands
- Collectible figurines (think bobbleheads)
- Popular comics stickers
- Pencil toppers
- Fidget spinner balls
- Dice
- Glittering objects, glow-in-the-dark, and similar trinkets
It is best to experiment with your offering if you are new to the business. Moreover, you can offer an assortment of toys where customers are treated to a variety of delightful surprises every time they use your toy vending machine.
What Are Good Locations For a Capsule Vending Machine?
The best location to put a capsule vending machine is a leisure, entertainment, or shopping venue with a lot of foot traffic, and that also attracts a lot of young families. You can consider the following locations for a capsule vending machine:
- State park facilities
- An Asian (Japanese? Korean? Chinese?) arcade near you
- Arcade game centers
- Shopping malls
- Grocery stores
- Asian grocery stores
- Popular food courts
- Thrift stores
- Comic stores
- Book stores
- Toy stores
- Bowling alleys
- Amusement parks
- Playgrounds
- Shops on main streets
- Gas stations
- Movie theaters
- Children’s hospitals
- Hair salons
The best locations tend to have the following characteristics:
- High foot traffic. Ideally, you want more than 50 people to see the toy vending machine daily. For a toy vending machine where a customer is unlikely to buy a particular toy twice, indirect foot traffic is better. Indirect foot traffic refers to people who aren’t regulars at the location. Employees of the building, for example, are direct foot traffic.
- Attract young families. Kids are always the end users of products sold in toy vending machines. You want a location that attracts young parents and their kids.
- Enjoy good security. A secure location reduces the chances of your toy vending machine getting stolen or vandalized. Also, consider putting the toy vending machine in the field of view of a security camera.
- Are Indoors. Having your vending machine where it is not exposed to the elements will prolong its life and allow you to get more value out of it over time.
- Responsive management. The management must be willing to show a duty of care towards your property. Effective communication is also important to ensure you are notified quickly whenever the machine breaks down.
Finding good vending machine locations takes research and some sales skills. After identifying a suitable location, you have to sell the location owner the benefits of having your toy vending machine on their premises, including what they stand to gain monetarily. Most location owners will want a commission every month.
You can find the locations yourself or hire an independent contractor to scout venues for you. Alternatively, you can use a list-building service like ours to get a comprehensive list of potential locations near you, plus their contact information so that all you have to do is make calls.
Are Toy Vending Machines Profitable?
Toy vending machines have higher profit margins than comparable vending machines such as gumball machines. This comparison is based on unit economics where the profit margin of a toy sold is likely to be much higher than that of a gumball sold.
You likely will be sourcing the toys, prizes, and stickers in bulk. The cost per unit is likely in the range of $.03 to $.11. You can then sell the products for $.25 to $1 per unit or higher. Even with the most conservative estimates, you will be operating your toy vending machine business at more than 100% profit margins.
Further, in comparison to drinks and snacks vending machines, toy vending machines may be more profitable for the following reasons:
- Minimal transportation costs. Toys, since they are smaller, are easier to transport than pallets of drinks and snacks. As such, you spend comparatively less on logistics.
- No expiry. Unlike snacks and drinks where you may incur losses because of product expiry, toys don’t have a sell-by date.
- Minimal maintenance costs. Food vending machines have many electrical components, such as refrigeration units, that are prone to breakdown. Toy vending machines are simple and break down less often.
Note, however, that the overall profitability of the business will depend on how many units you can move per month/year. While you may have higher profit margins per toy sold, a food vendor may make more money than you based purely on the sheer number of snacks and drinks sold over time. This is not to say that you cannot move more units than a food vendor. At a high-traffic location with relevant customer demographics, you can make a decent income from a toy vending machine.
