Vending machines have become an unexpected and popular investment trend, according to a new Wall Street Journal report.
On paper, the side hustle looks simple. Buy a used car, which the WSJ estimates would cost about $1,500, fill it with candy and soda from wholesalers like Sam's Club and Costco, mark the price up to 100% per unit, and collect the cash.
A vending machine owner can usually start for less than $2,000 and expand at their own pace, giving the side hustle the benefit of low start-up costs. The owners refill the products in the car and collect income several times a month, so they set their own hours and have a relatively passive source of income.
According to Sale Finder. Above Watching Marketthe number of vending machines in the US increased by about 4.5% from 2021 to 2022.
Vending machines made a big comeback during the pandemic, with the rise of contactless shopping.
“It's touchless, it's considered safe and it's prepackaged,” Carla Balaggie, chief executive of National Auto Merchandising Associationsaid Washington Post.
However, the landscape can be competitive. The US has seven million vending machines, or one for every 50 Americans, according to the Sale Finderand machines are at risk of damage due to disgruntled users, environmental conditions or other factors.
Earnings per car can vary widely, but average weekly earnings from a car are typically around $75 per week, according to N2Go.
Operating costs can also add up. According to a recent report in the business news media haste, taxes, transaction fees for card purchases (about 5-6%) and service costs can affect profits. The outlet says about half of the revenue goes to the cost of items in the vending machines.
Zach Downey, owner and CEO of the cotton candy vending machine company Distinctive sellingsaid The entrepreneur in March around the time two of his machines stopped working at the same time at a resort.
“I remember driving from Virginia to Texas in one go to make sure we didn't lose the resort business,” he said. “It was a stressful period, but I learned a lot.”
Downey is on track to bring in $500,000 in revenue this year with 10 cars.
There were also some problems with the new technology. Adaria Vending Services was recently reviewed on facial recognition technology that University of Waterloo students took a look at its smart vending machines. Although Adaria stated that its vending machines detected faces to activate payments, the university still requested that the machines be removed from campus.
Moreover, a February report by Transparency Market Research shows that the smart vending machine industry will grow to $8.2 billion by 2031 (from $4.9 billion in 2022).
The increase in lateral accelerations of the vending machine may be due to necessity. According to Bankrate, 39% of Americans currently have a side hustle and 28% think they will always need one to make ends meet. Of those with side hustles, about one in three say they need the money to pay for essentials, everyday living expenses — not entertainment.
“Side hustles have become more common, but like many things in this inflationary environment, people are working harder but not necessarily getting ahead,” Ted Rossman, a senior industry analyst, told Bankrate.