Nowadays, everyone is looking for new ways to earn passive income. For those looking for new opportunities, have you ever considered vending or gumball machines? With low overhead costs and maintenance, they can provide easy side income each month. However, before you jump in, here are a few things you should know when investing in a gumball machine.
The Financial Benefits of Investing in a Gumball Machine
While it may seem unconventional to some, there are several financial benefits to consider when investing in a gumball machine.
Passive Income
First and foremost, buying a gumball machine is an easy way to generate passive income to supplement your monthly earnings. Some owners report that they earn up to $350 a month for a single machine. However, Vending Times magazine gives a more reasonable expectation with the national average of about $1 a day.
Steady Demand
Another reason that a gumball machine is a good investment is due to the steady demand. According to this Statista survey, 173.4 Americans responded that they chew gum. And, 23 million indicated they were habitual chewers (more than 16 pieces a week).
You should also consider that people will always need food and snacks. Therefore, gumball machines offer a cheap option when you need something small.
Low Maintenance and Overhead Costs
Lastly, gumball machines have low maintenance and overhead costs. Once you purchase the machine and products, you only need to refill it. Depending on sales, it could be once a week or once a month. Be sure to track your quarters so you can set a consistent schedule.
The Initial Cost of Investing in a Gumball Machine
So, the big question…how much does it cost to get started? As with most things in life, the answer varies.
The initial cost largely depends on the machine you choose. While basic gumball machines start around $100, they can run well over $1,000. However, this should be the largest expense and a one-time fee since these machines are built to last.
Then, you have to factor in the cost to fill the machine. Candy is relatively cheap, especially when you can buy it in bulk. And, it has a long shelf life (about a year) which gives you more breathing room to sell your inventory.
The price for your inventory varies as well by size, brand, and supplier. But to give you an idea of these costs when investing in a gumball machine, let’s look at traditional gumballs.
One of the most common selections is Dubble Bubble one-inch gumballs. You can purchase 850 of them through Amazon for $40-$50. This gives you a profit of $0.17 per gumball, for a total of $212.50 per box sold. With this profit margin, the machine should pay for itself after selling approximately 600 gumballs.
Even if you don’t choose the most profitable location, you should at least cover the investment costs with enough time. And, the more machines you have, the more you can make.
10 Tips to Maximize Your Gumball Game
If you think that investing in a gumball machine is the right move for you, here are 10 tips to help you maximize your profits and success.
1. Don’t skimp on the machine.
When investing in a gumball machine, don’t be cheap. If you buy a cheaper model or second-hand machine, there’s no way to verify its maintenance history. If they are more prone to jam or break, you may have to invest more money to fix them.
2. The amount you can make all comes down to location.
Remember…location, location, location! If you want to make money, you need visibility. High-traffic locations can bring up to $350 a month while others may not even break $3. But, you are bound to have some level of success as long as it is well placed and people pass by it frequently.
3. Pick a location where people are likely to have change.
Besides location, you need to think like your customers. Which places give coins as change? They need coins to operate the machine, so think of locations where people are more likely to have change on them. Scope out local gas stations, arcades, laundromats, and retail stores for potential placement.
4. Choose the placement based on foot traffic.
Once you have a location, look for places people spend the most time. Try to place your machine near doors, lines, and other places people wait. On the other hand, your inventory is less likely to sell if you put it near restrooms or in a remote corner.
5. Keep the machine well-stocked.
You will also want to make sure your machine is well-stocked. A full machine is much more appealing than one that looks half-empty.
6. Use plastic capsules.
If you use plastic capsules, you can expand your offerings to sell candy as well as small toys. Did you know that some toys are cheaper per unit than gumballs or candy? Not only will it help you capture more profits, but it also gives customers more options and broader appeal.
7. Choose the right product.
You should also pick products people like. If the employees at the location use the machine, get their opinions too. You want to choose things that people want to buy. Don’t waste money ordering products that don’t sell.
8. Partner with a charity.
Partnering with a charity is a great way to garner greater support from location owners. In addition to attracting more business from people who want to support the cause, it could help cover overhead costs.
9. Put your profits back into the business.
If you have one gumball machine that is successful, why not purchase a second one? If you put your profits back into your business, you increase your earning potential. Buying more machines will increase revenue and allow you to scale your business.
10. Hire a locating service.
If all else fails and you are struggling to find a location, you can use a locating service. However, make sure it is a reputable provider. Go online and check customer reviews or ask other business owners for references.
Do you own a vending or gumball machine? What challenges have you come across? Share in the comments below!
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Jenny Smedra is an avid world traveler, ESL teacher, former archaeologist, and freelance writer. Choosing a life abroad had strengthened her commitment to finding ways to bring people together across language and cultural barriers. While most of her time is dedicated to either working with children, she also enjoys good friends, good food, and new adventures.