Step-by-Step: How to Start a Vending Machine Business

Starting a vending machine business can be a great way for a beginner to become an entrepreneur. It’s relatively low-cost, scalable, and can be run as a side hustle.

Vending machines are everywhere; in fact, there are millions of machines in the U.S., and the industry generated over $7.5 billion in revenue in 2024.

Hence, this guide will walk you through how to start a vending machine business step by step, from understanding the business model to finding profitable locations.

We’ll also cover common questions like how much to start a vending machine business, startup costs, legal requirements, and more.

(Don’t worry if you’re on a tight budget, we’ll include tips for keeping costs low and even starting with almost no money.)

Step 1: Understand how the vending model works

At its core, a vending machine business is a self-service retail business. That means you’re selling products without being there in person, and a machine does the selling for you. Thus, your profit on the vending machine business depends on four key factors:

• What do you sell?
• What location did you choose?
• How often do your machines get used?
• How efficiently can you restock them?

The vending model makes money through small profits on each sale, multiplied by the number of people who use the machine daily. The more people who pass by your machine, the more chances you have to sell something.

But how do vending machines generate revenue?

Well, it runs on a passive income idea—you’re not standing there selling, the machine is doing the work. Most operators work with two main business models.

You can either own and operate your machines directly or you can lease them out to other businesses (sometimes called placement deals, where you split revenue with the location owner).

When you're starting, you'll likely focus on the first model—owning and operating your machines gives you complete control over product selection, pricing, and profits.

Step 2: Pick your vending machine type and product focus

There are way more options than just soda and chips these days. You've got traditional snack machines, drink machines, combo units that do both, and specialty machines for everything from electronics and PPE to cosmetics and even ice cream.

The key is thinking about where you want to place your machines and who will be using them—your product choice depends heavily on understanding your location's audience.

Take a look at this table for a clear overview of different vending machine types, what products to sell in them, and where they work best.

Now, once you pick your machine type, you need to decide what you want to focus on selling. Don’t try to sell everything—that’s a mistake. Focus on what people in that area need or crave.

Your product focus should match the people using the machine. And remember—some products expire quickly, like sandwiches or milk-based drinks. You’ll need to visit those machines more often. So, think about how much time you can give before choosing products like that.

Step 3: Decide what to sell

Smart product selection comes down to matching customer habits with foot traffic patterns. Office parks might want a mix of beverages and healthier snack options—think sparkling water, protein bars, and trail mix.

Gyms are perfect for protein shakes, energy drinks, and fitness supplements. Bus stations and transit hubs? That's grab-and-go territory where convenience trumps nutrition.

But here's the crucial part: Profit margin matters as much as demand. A $1.00 chocolate bar that costs you $0.45 delivers a 55% margin and $0.55 profit per sale.

Compare that to a premium juice that costs $2.25 and sells for $3.00—you're only making $0.75 per sale despite the higher price point. Volume and margin together determine your success.

Study your location's peak hours, seasonal patterns, and customer preferences. A machine near a college campus might sell energy drinks and snacks during finals week, but shows different patterns during summer break.

Remember:

• It’s not about what you like—it’s about what people will buy.
• Start with 8-10 different products, see what sells well, and then adjust your stocklist.

Step 4: Make a business plan

This is where you turn your vending machine idea into an actionable plan. Your business plan doesn't need to be fancy, but it should clearly answer these fundamental questions:

• What products are you selling?
• Who's your target customer?
• How much will machines cost?
• What's your product cost structure?
• Where will you source machines and inventory?
• How will you handle restocking and maintenance?

A simple, focused plan helps you stay on budget and avoid common setup mistakes that can derail new operators. I know crafting a business plan requires research, time, and effort.

The good news is, you can use a free vending machine business plan example for guidance on what to include. This not only saves you time and effort but also helps you build a complete plan, avoiding common mistakes.

Additionally, you can use Bizplanr to create your vending machine business plan using AI. The platform can craft a complete business plan in a fraction of the time; you just need to answer a few questions, and the AI will do all the work for you.

Step 5: Estimate your startup costs

Before you jump in, you’ve got to be clear about how much money you’ll need to get this business off the ground. Too many people guess, and then get caught off guard when expenses start piling up.

So let’s break it down together.

One-time startup cost

Here’s what you’ll likely need to spend at the start:

• The vending machine itself: It could be a brand-new one or a refurbished one, depending on your budget.
• Initial product stock: All the snacks, drinks, or whatever you plan to sell for the first load.
• Card reader (if needed): Since people prefer digital payments these days.
• Storage space (optional): A small room or shelf to keep extra stock.
• Van or car (if needed): For restocking, especially if you plan to manage multiple machines.

Ongoing monthly cost

And don’t forget the regular expenses that come every month:

• Fuel for restocking trips
• Product restocking
• Machine servicing and maintenance
• Location commission fees, some places take a small cut of your sales for letting you keep your machine there.
• Repairs and unexpected costs, machines sometimes jam, or sales might dip in a slow week. Always keep a small cushion aside for such surprises.

Step 6: Register your business and stay compliant

A lot of new vending owners skip this part or delay it, thinking it’s not a big deal. But trust me, getting your business legal from the start saves you from headaches later.

Vending isn’t just plug-and-play legally. You’ll need to officially register your business as an LLC for liability protection or as a sole proprietorship if you’re keeping it simple.

This lets you open a business bank account, gives you legal protection, and makes it easier to land good locations or get funding later.

Also, depending on where you set up your machines, you may need:

• A business license from your local city or county
• A vending permit in some states
• A food handling or health permit if selling food or drinks
• A sales tax permit for collecting and paying state taxes

Once you’re up and running, stay on top of taxes, sales records, and license renewals. Following basic business and food safety rules keeps your operation clean, compliant, and protected from legal trouble.

Simple rule—stay legal, stay stress-free.

Step 7: Buy your vending machine and payment system

This is where your business actually starts taking shape. But before you rush in, let’s talk about where and how you should buy your machine.

You’ve got a few good options:

• New from manufacturers: Expensive, but reliable, comes with a warranty and the latest tech.
• Used from online marketplaces: Websites like OfferUp, Facebook Marketplace, or industry classifieds.
• Local refurb vendors: Cheaper than new, and sometimes they’ll even customize it for you.

Importantly, these days, people hardly carry cash. So, adding a card reader or card scanner is a must. Some machines come with this built-in, but if not, get a good one installed.

Don’t skip this. Machines with digital payment options earn 25-30% more sales than cash-only machines.

If you’re ordering from a website or dealer you haven’t met in person:

• Ask for a clear demo video
• Check the machine’s condition carefully
• Confirm warranty and service terms

Step 8: Stock your machine and test everything

It’s the most hands-on, practical part of the business. It’s also where a lot of new operators make small mistakes that cost them later. So let’s walk through it carefully.

Remember the product list you decided on earlier based on the location? Stick to that. Don’t get tempted to over-order stock in the beginning.

Start small—buy just enough to fill the machine with maybe a week’s worth of products. This way, you don’t risk wasting money on things that don’t sell.

Before you let customers use it, test everything properly:

• Insert coins, notes, or scan a card, and check if the machine accepts payments smoothly.
• Select different products, and make sure each item drops correctly without getting stuck.
• Check the change return. If someone uses cash, see if it returns the correct balance.
• Look at the display screen; any messages like “Out of Stock” or “Insert Exact Change” should be clear and correct.
• Inspect the temperature (for drink/snack machines), cold items should stay chilled.

A well-stocked and properly tested machine is what turns a good location into a money-maker. Never rush this step.

Step 9: Track performance and optimize

Once your machine is live, your job isn’t over. In fact, this is where you shift from setup mode to smart management. This step decides whether your machine makes steady profits or just sits there eating up space.

Here’s how you should track and manage your vending machine:

• Check stock levels weekly or even sooner if your machine’s in a busy location like a college or hospital. You don’t want customers walking away because the snacks or drinks they wanted are sold out.
• Record what’s selling and what’s not, keep a simple sheet, or use an app to track product sales. You’ll start spotting patterns.
• Watch for usage trends like certain items selling faster during evenings, weekends, or particular seasons.
• If something doesn’t sell for two weeks straight, take it out. No point wasting space and money.
• If a product keeps selling out quickly, either double its stock in the next restock or increase its price by $1 or a few cents. People won’t mind paying a bit more for what they really want.

6 Common mistakes to avoid (and what to do instead)

Even the best business ideas can stumble if you overlook small but critical details—and vending is no exception. To help you sidestep those pitfalls, here’s a list of the most common vending machine business mistakes and, more importantly, how to fix them before they cost you.

1) Buying a machine before locking down a location

Fix: Always secure your location first. It’s like buying a boat before you find a lake—it’s useless sitting in your driveway. Good locations make or break vending profits.

2) Skipping the card and mobile payment options

Fix: Install a card reader and mobile payment setup right from day one. In the U.S., cashless sales now make up over 71% of vending purchases. If you’re cash-only, you’re turning away more than half your potential sales.

3) Choosing products based on guesswork, not demand

Fix: Start small, track sales weekly, and swap out slow movers fast. Don’t assume people want what you like—what sells in an office park won’t sell at a middle school. It’s like stocking winter jackets at a Florida beach shop.

4) Ignoring machine maintenance and repairs

Fix: Set aside a monthly repair fund. Vending machines aren’t ‘set-it-and-forget-it’ machines—they’re like a car. Skip maintenance, and it’ll break down at the worst time, costing you sales and location trust.

5) Not testing the machine fully before going live

Fix: Run a full check with actual money/card, select each product, confirm item drops, check screen messages, and test the change return. It’s like test-driving a car before buying — don’t trust a machine you haven’t run through its paces.

6) Overstocking inventory too early

Fix: Stock for a week, not a month, in the beginning. Avoid dead stock and expired products. Until you know what sells, it’s smarter to stay light and flexible—vending success is about fast-moving inventory, not shelves packed with dust collectors.

Final thoughts

A vending machine business runs on simple fundamentals: secure a good location, offer products people want, and keep your machines running smoothly. Along the way, you’ll learn what sells, which spots perform, and how to manage inventory without overstocking.

Expect some trial and error early on—that’s part of the process. Stay flexible, track your numbers, and tweak your strategy as you grow. We’ve covered everything from choosing machine types to estimating costs and avoiding common mistakes, giving you a clear roadmap to get started.

Before you launch, take time to map out a straightforward business plan. It doesn’t have to be complicated—platforms like Bizplanr can help you draft one quickly, so you stay on budget and avoid rookie errors.

Stick to the basics, stay consistent, and you’ll build a solid vending side business over time.