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Vending machines have become an unexpected and popular investment trend, according to a new report Wall Street Journal a report.
On paper, a side hustle sounds simple. Buy a used machine, which the Wall Street Journal estimates will cost about $1,500, fill it with candy and soft drinks from wholesalers like Sam’s Club and Costco, mark up the price by up to 100% per unit, and collect the cash.
A vending machine owner can usually start with less than $2,000 and expand at their own pace, giving the busy side the advantage of lower startup costs. The owners restock the products in the machine and collect revenue several times a month, so they set their own hours and have a relatively passive income source.
A small business owner wouldn’t feel out of place in the vending machine industry, which consists primarily of small, independent operators making less than $1 million annually, according to Sales locator. According to Monitoring the sales marketThe number of vending machines in the United States increased by about 4.5% from 2021 to 2022.
Related: At 23 years old, I started a side hustle for “quick money.” Now the company makes more than $1 million a month — and boasts a celebrity following.
Vending machines have made a huge comeback during the pandemic, with the rise of contactless purchases.
“It’s touchless, safe and pre-packaged,” said CEO Carla Palacki. National Auto Trade AssociationTell Washington Post.
However, the scene can be competitive. The United States has seven million vending machines, or one for every 50 Americans, according to the British Daily Mail. Sales locatorMachines are at risk of damage due to disgruntled users, environmental conditions, or other factors.
Earnings per device can vary widely, but average weekly revenue from one device is usually around $75 per week, according to N2Go.
Operating costs can add up as well. This is according to a recent report by Business News magazine The crowdTaxes, transaction fees for card purchases (about 5-6%), and servicing costs can eat into profits. The outlet reports that nearly half of the revenue goes toward the cost of items in the vending machines.
Zach Downey, owner and CEO of cotton candy vending machine company Featured saleTell contractor Around March when two of his machines stopped working at the same time at one resort.
“I remember driving from Virginia to Texas one way just to make sure we didn’t lose the resort business,” he said. “It was a stressful time, but I learned a lot.”
Related: He ‘accidentally discovered’ a semi-passive side hustle in college — and now he’s on track to make more than $500,000 this year
Downey is on track to achieve $500,000 in revenue this year with 10 machines.
There were also some issues with the new technology. Adaria Vending Services recently came under scrutiny over facial recognition technology that University of Waterloo students spotted on its smart vending machines. Although Adaria said its vending machines detect faces to activate payments, the university is still requesting that the machines be removed from campus.
Moreover, A February report Transparency Market Research study shows that the smart vending machine industry is set to grow to $8.2 billion by 2031 (from $4.9 billion in 2022).
RELATED: A college removes its vending machines after a student discovered they were using facial recognition technology
The emergence of the vending machine side hustle may be due to necessity. according to Pancreatic, 39% of Americans currently have a side hustle and 28% believe they will always need a side hustle to make ends meet. Among those with a side hustle, about one in three say they need the money to pay for necessities and daily living expenses — not for fun.
“Side hustles are becoming more popular, 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.
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