How to start a vending machine business – Small Business UK
A vending machine might not be the most obvious idea for a new business venture, but it can be a lower-stress and flexible way of earning an income.
If you’ve come over to this article after a session on TikTok, it’s no surprise. The #vendingmachine hashtag has almost 179,000 posts from around the world.
Zooming back in on the UK, Swoop says that 7 billion items are dispensed from vending machines every year. The funding specialist adds that there’s potential to earn £300 per month from a single vending machine.
There are still important points to consider. Here’s what you need to know before starting a vending machine business.
Read on for the full guide or jump straight to the bits you want to know more about.
- Why should I start a vending machine business?
- What are the pros and cons of running a vending machine business?
- What to consider
- How much should business owners expect in terms of start-up costs?
- Franchising
- Where do I buy vending machines?
- How do you market a vending machine business?
Why should I start a vending machine business?
Running a vending machine or two is a relatively low cost and easy way to entrepreneurship. What’s more, there’s not as much stress with maintaining a shop or hiring employees.
Without a plan, however, it could turn out to be a flop. That’s why strategy is essential, as is the case for any small business. “Honestly, I’d say don’t start one unless you’re coming in with the mindset to disrupt, improve or actually enhance something,” Keren Isiah, founder of Kairos Unlimited, told Small Business. Kairos Unlimited provides culturally inclusive snacks and products for students and communities.
“Vending on its own isn’t exciting – what matters is what you do differently. That said, it’s one of the most accessible ways to enter business because you can start small, learn quickly and scale at your own pace without needing a full retail space as I have. It’s practical and visible.”
It’s more worthwhile if you believe that it serves a purpose. Say you travel regularly for work and you’ve lost count of the number of times you’ve forgotten a plug adapter. You may frequently travel from a smaller airport which could benefit from a vending machine which sells plug adapters at any time of day. There’ll be even more of a demand if it’s attached to a bus terminal or train station.
What are the pros and cons of running a vending machine business?
As always, let’s start with the pros.
Pros
- Dispenses small items that are easy to store, meaning you could store them at home
- Low cost after the initial investment
- Low maintenance
- Around-the-clock income
- Easy to scale
“One of the biggest advantages is simplicity: once a machine is placed in the right location, it operates from a single point and after the initial purchase, ongoing expenses are relatively low compared with many other businesses,” said Isiah. “It’s also scalable as each additional machine builds on the systems you already have.”
Cons
All of the downsides might not apply to you, but are still noteworthy.
- Larger upfront cost
- Deciding where to place is difficult, especially as a newbie
- Managing maintenance
- Risk of theft
- Potential food spoilage
“The challenges are the upfront investment, securing good locations and managing restocking and maintenance. If the location isn’t right, even the best machine won’t perform well, so placement decisions matter heavily,” Isiah added.
What to consider
As we’ve spoken about, location is crucial. You might want to consider workplaces, shopping and leisure centres, apartment buildings, service stations, airports, hospitals, other small businesses – anywhere with a captive audience, in essence.
The next step is to assess what’s out there already. If you’re selling chocolate bars in a shopping centre that has three snack machines already, then you’re going to struggle to stand out. For areas that have vending machines already, consider where there is heavy footfall on the premises that doesn’t house vending machines.
Then it’s a question of what you’re going to sell. Food and drink are often the most popular, with well-recognised brands selling the best. Those wanting to branch out and do a different kind of food offering might consider refrigerated products such as sandwiches, salads and dairy drinks. You’re far from limited to food and drink, though. You could have tech, books, magazines, soft toys or the easily forgotten travel essentials that we mentioned earlier.
Don’t forget about accessibility. Ideally, you want your machine(s) to accept both cash and card. What’s more, you must be compliant with the Equality Act 2010. This means accessible height of the buttons, with the ability to read the screen and reach the payment terminals.
Aside from that, you want your machines to be easy to maintain. This means that they’ll be easy to fill and clean. Modern machines will be more energy efficient meaning that they’ll be cheaper and more efficient to run – worth paying attention to if you’re buying second hand.
You must be in the know when it comes to permissions. Get permission from either the council or the property owner (if it’s a private business). These agreements must be in writing.
“The core requirements are usually permission from the site where the machine will be placed and the right insurance to protect both the machine and the public,” said Isiah. “If selling food, you also need to ensure proper supplier sourcing and basic food safety compliance. Institutions like universities may also request risk assessments or agreements before installation.”
Finally, check your new vending machine for hazards before you start putting it to work.
Sam Heaton has a lot of useful info about running vending machines on his YouTube channel.
How much should business owners expect in terms of start-up costs?
“Start-up costs depend largely on whether you hire or purchase the machine and what type of products you plan to stock,” said Isiah. “Costs typically include the machine itself, initial stock, delivery, installation and insurance. A single machine can vary significantly in price, so the starting budget depends on the scale and quality you want to begin with.”
Of course, you need to consider the cost of the new machine. According to Swoop, it’s £50 for a basic machine and as much as £15,000 for more complex machines. There’s also the option to buy used or refurbished machines for up to £3,000 – just make sure there’s ongoing support in case you’re in need of repair.
As for stock, try buying it from wholesalers or the cash and carry, or online.
You may have to pay rent to the property owner to use the space – this may or may not include electricity costs. On the topic of ongoing costs, it’s best practice to pay for regular servicing and, if applicable, upgrades.
Though not exactly a cost, have a think about your strategy for stocking new items. For those who have multiple machines, try stocking them in short supply and see how well they perform before rolling them out to other machines.
Franchising
As with many businesses, vending machines can be done as a franchise. Royal Vending and Tubz do franchise options, for example. As well as the vending machine, you’ll receive support and training to get the most out of your investment. Franchises are lower risk in the eyes of the banks so it might be easier to secure a loan.
Be aware that the cost could include royalty payments and regular service charges, plus product supply mark-ups. Just know that the franchisor will be deciding what you offer in your vending machines, along with other key decisions that will be limiting to your freedoms.
Where do I buy vending machines?
Second hand websites such as eBay will have vending machines for sale. Searches can be customised for local listings so that you can go and collect it.
Small ads in vending machine publications and websites should have machines for sale – they’ll be more expensive, but might come with a warranty that a second hand site won’t.
Auction sites might have vending machines going, but if they do, you’ll be up against more experienced bidders so do your research.
Repair shops might have some going, too. They’ll know about repairs themselves, of course, but they can point you towards some other pros who might possess the expertise you need.
There will be specialist vending machine distributors who can sell you a sparkly new one. Check out Selecta, Liquidline, The Vending People and Royal Vending. If you’re not committed to buying a vending machine just yet, there are rental options for around £33 per month.
How do you market a vending machine business?
This really depends on what kind of vending machine you’re running and where it is. At its core, having a digital presence is vital. Build a website to showcase your products, especially if they’re more unusual.
Focusing on local search engine optimisation is a smart marketing move. This means that people in the area your machine is will be better able to find you. Local businesses might even find you, giving you an opportunity for brand partnership and increased sales.
As Isiah’s machine business is focused on campus, it’s easier to hone in on the target audience.“Because I’m in a student building within a university environment, a lot of our marketing is community driven. I use student email networks, partnerships within the university and strong visual branding across campus. Stickers in our brand colours have been especially effective they help people recognise the machines quickly and remember the Kairos name. Being physically present, speaking to students directly and gathering feedback at the machines also played a major role.”
The essentials such as your branding and logo really count as you’re often going to be vying for shoppers’ attention when they’re out and about. Read more in our marketing articles linked below.
You might find some less conventional routes into raising your business’ profile, like Isiah did. “I was also proud to win a business award competition last year. (Young Entrepreneur of The Year at the Chester Business Club Young Person’s Business Award). This included access to PR support and mentoring through the Chester Business Club. This has really helped with my marketing.”
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