Vending machines might bring U new income

Vending machines still bag a punch when it comes to delivering a
source of income.

The most important question is how much can it bring in? It is not surprising to hear of machines generating USD 1000-2000 in monthly sales.

However, it depends on numerous factors and the important ones are the type of machines, the location, the conditions and the operation.

The type of machines

Different types of AVM would affect the variable cost, the cost of goods and the margins that a machine can bring in.

In general, they are the gum ball, snack, beverage and cans. The lowest margin with the highest cost of goods would be the snack machines.

These machines requires frequent top up of snacks,(high man power cost) and per snack the profit are usually very lean.

Similarly, cans vending machines also require frequent top up and although the margins for cans are better good due to mass purchase, the topping up is much more frequent than snack and so substantially higher manpower cost.

The highest margins, least variable cost (little topping up) would be the gum ball AVM. However, as it is an impulsive purchase, it takes a while for a machine to generate meaningful income.

Beverages or coffee vending machines strikes a balance in between. The margins are better, the topping up less frequent and it enjoys a better sales than gum balls.

So, theoretically vending coffee seem like a best choice to attain this passive income (however, do note the operation).

The location

vending machines concept is similar to retailing outlets and location is everything. However, different to that of a retailing outlets where heavy human traffic flow is preferred, machines thrives in areas of low human traffic. This is also due to lesser retailing outlets thus "forcing" consumers to turn to the machines.

This is not a one rule fits all, gum ball for example would still do well in entertainment outlets where human traffic flow is heavy. And machines vending coffee, still get good sales in office buildings.

Again, in this instance, coffee vending machines seems to be a more flexible machines that can generate sales in different areas.

The conditions

Not as important a decade ago, conditions now plays an important role in a machine P&L. The conditions includes the utility, the rental, commission, marketing fund and to some extent bundling deal.

Bundling deal for AVM is an agreement where a mall owner would ask vending operator to take numerous locations at all the same rent and with it, you can get "lousy" location in front of a convenience store where it is just impossible to attain any sales.

All the conditions varies and it is outside the control of vending operators. However, this is usually mitigate by the fact that machines operators usually choose less human traffic location (but knowing how lucrative it is, lately, mall owners are increasing rental and commission even for these areas).

How to make coffee without machine?

How many grams of coffee for V60?

How to brew coffee using coffee sock?

How to use French Press as a coffee maker?

How to use a Drip Coffee Bag?

Learn about these methods and more (such as coffee cupping) in our free coffee classes.

A collection of the various Drip Coffee Methods

If you are here, you love to drink coffee. So, what would you say if you can get free coffee in the place where you spend most of the time? Or, would you be interested in getting free coffee and save enough to send you for a short holiday?

Show me how to get this free coffee...

The operation

A major cost center is the man power. Other than the different types of machines, the reliability of machines affects the profits.

All AVM are subjected to harsh conditions, be it the elements or human abuse. So, the more ruggard the machines, the less maintenance -the more efficient is your manpower cost.

Think of it this way, earlier, we mention that you probably can get USD 1000-2000 per machines, however, that is barely enough to feed a family. So, you would need 5-10 of these money grubbers to enjoy a better quality of life, and for that, the less hassle the machines the better the usage of manpower, possibly having more machines!

Unfortunately, coffee vending machines fall under the high maintenance category. They require frequent cleaning, flushing and pests prevention.

Till now, vending machines still is a profitable business and despite harsher conditions, operators can still find ways to maintain and in some cases better the margins. So, think about it -maybe 2-3 coffee vending machines might bring in that extra hundreds to better your quality of life...

About US | OCM Profile

OCM (OnCoffeeMakers.com) was started in 2007 with the first webpage about coffee machines. And for a number of years, we focused on helping people find their desired coffee machine (we still are helping folks with that! So, if you are looking for coffee machines for office or restaurants - check out the link).

In 2010, we started getting enquiries on restaurant marketing and we start to help food and beverage brands with their marketing. Below are campaigns and events that we have done over the years:

OCM's campaigns: F&B Marketing Ideas by OCM

OCM's Events: F&B Industry events by or with OCM

Check out this restaurant marketing guide to learn more about the many campaigns and companies we have worked with.

Since then, we have also created many marketing workshops and classes for the F&B industry. Many of these modules are still running in tertiary institutions such as Temasek Polytechnic Skillsfuture Academy and also ITE College East COC classes, below are some snippets of our lectures and workshops:

OCM’s F&B workshops: Food and Beverage Marketing Lectures | Workshops - click to watch classes on customer journey map, JTBD and more.

So, if you are looking for industry practitioners to help you scale your coffee or F&B businesses, do drop us a message or book an appointment. Do also check out our various social media platforms on regular F&B and coffee market updates:

For regular coffee (F&B) related videos: OCM Youtube

For Daily Coffee Inspiration (fun coffee content): OCM IG

For insights into the coffee (F&B) industry: OCM LinkedIN

PS: For the coffee lovers, we continue to share coffee articles (and videos) and have also started a free coffee class section (with free online coffee training supported by coffee partners).