How to start and finance your vending machine business

If it will fit in the machine and you can find a market for it, vending machines can sell almost anything. The four main types of vending machine business sectors are:

• Food and drinks  
• Bulk vending
• Specialty vending
• Franchised vending

It is important to do your research before opting for a specific sector and buying a machine. Different products may require utilities and features such as electricity, water, refrigeration or Wi-Fi to operate successfully. Also check out what is selling in the area where you intend to place the equipment – for example, an office block or hospital is a good spot for hot drinks, snacks and sandwiches – and take the time to discover what the foot traffic is like – the best machine locations sell to people all day long, not just during lunchtime or rush hour.  

Once you’ve spotted some likely machine locations and judged the foot traffic, it’s best to select one product sector and stick to it. That way you can restrict the types of machines you need and you’ll learn more about your customers, the sales cycle, what products are top sellers, etc. Only when you’ve established your business should you think about expanding – for example placing a soda machine next to your snacks machine to satisfy both food and drinks customers. 

Snacks, food, and beverage vending

With soda and cold drinks alone making up almost 37% of vending machine sales, the snacks, food and beverage vending sector is by far the biggest in Australia. For entrepreneurs looking to enter the vending machine industry, sticking with these tried and trusted products can reduce your business risk. 

However, it’s not all about the soda can. You can buy machines that offer drinks, snacks, or a combination of both, (the top five selling vending machine items in 2023 are candy bars, chocolate bars, chips, pretzels and gum), but even here there’s room for innovation. You could move away from selling pop, candy bars and chips to provide different forms of drinks, treats and snacks. Modern consumers are increasingly buying flavored waters, cold caffeine-based drinks and variations of milk, high-energy, and diet-based options. You could also consider a product line that targets health-conscious consumers, offering products as varied as fresh fruit, granola bars, salads, yoghourts and vegetarian wraps. 

Most importantly you should target your food and drinks range to the locations where you operate. For instance, a gym may be a great place to sell energy bars and electrolytes drinks, but in a business park you may do better selling coffee, sandwiches and proven, lunchtime favorites.

Bulk vending

Vending machines that sell bubblegum, toys, balls and kids’ stickers are known as bulk vending. These machines are typically low-maintenance, all-mechanical devices, selling their products for modest prices usually paid in cash. With long-life products and no need for electricity or batteries, bulk vending machines are ideal for business owners seeking an opportunity that requires minimal time or cash investment and that generates good, passive income. Used bulk vending equipment can be purchased for as low as $50 per unit and if placed in the right location – such as near a school or in an amusement park – and selling the right product, they can drive income of up to $30 per month. 

Top tip: Used bulk vending machines can often be old and worn, so check them over thoroughly before purchasing and factor in a budget for repair or upgrade costs.

Specialty vending

Everybody has to eat and drink, but specialty vending machines can cater to many other markets. Depending on your machine location, you could consider selling products as varied as:

Retail

Tech gadgets and accessories, such as cables, chargers and ear plugs are big sellers in airports, bus and train stations, as are machines that dispense books, magazines and newspapers. Some shopping malls and department stores also provide machines that sell high-end products, such as beauty products, sunglasses and jewelry, whilst arenas and stadiums are good spots for machines selling fan gear, souvenirs, seat cushions, ponchos and rainwear.

Laundry products

Laundromats, apartment blocks, dorms, motels and hotels are ideal locations for selling detergents, dyes, dryer sheets and other laundry essentials. You could also expand this basic range by providing emergency sewing kits, dyes and packs of buttons. 

Hot drinks

Coffee on the go is a huge industry in Australia and it’s not only coffee shops getting in on the action. Sophisticated coffee vending machines, often selling a range of products from filter to cappuccino, plus teas and hot chocolate, are taking a growing share of revenues. Top locations for these type of machines are office blocks and business parks, but hospitals, bus stations, the DMV and car washes are also strong contenders.

What’s the difference between a vending machine and an automated retail machine?

Automated retail machines are new entrants to the vending machine market. Often located in up-scale locations and delivering a luxury sales experience, they are changing the way we buy products without human intervention. But how are they different from the humble vending machine?

• Vending machines have remained largely unchanged for decades and they sell many types of product with pure focus on the sale. ARMs are state-of-the-art devices that usually showcase a range of products from one manufacturer, aiming to generate brand awareness as much as sales.
• The typical vending machine sale is less than $10. A typical ARM sale is $20 – $200.
• Vending machines rely on electronics and old-school mechanicals. ARMs work using robotics, electronics and more often, intuitive AI.
• It’s common for vending machines to jam when dispensing products or lose the customer’s money. ARMs use laser guided systems to dispense products and card or smartphone technology for payments. ARMs almost never jam or lose the customer’s money.

Franchise opportunities

Buying into a vending machine franchise can give you entry to an established network, corporate backing for products, extensive training, and services and support to secure suitable machine locations. It can also give you options on how many machines you wish to operate and sometimes, financing to buy or lease them. However, keep in mind that as well as the upfront joining fee, franchisors will often dictate what you can and cannot sell, may restrict where you buy your inventory and will take a share of your profits in exchange for your license.

Vending machine business ideas

As vending machines and consumer tastes evolve, there is scope to provide many different products and services. Some machine vendors are already thinking outside the vending box with ideas such as these:

• Burgers, pizza and fries – fast food without the food truck or restaurant
• Pet foods, snacks, toys and medicines
• Hams and cured meats – everything from bacon to salami and steaks
• Sushi – popular in Japan for ages, now expanding across Australia
• Hair products – everything to keep male and female hair looking great
• Fresh vegetables – brings the produce aisle to your street corner
• Nutrients and proteins – muscling in on the fitness sector to keep athletes in top form
• Fresh flowers – no more shopping at the gas station on Mothers’ Day