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Old 12-15-2013, 01:13 PM
 
16 posts, read 67,602 times
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Any of you guys have any vending machine experiences? I am interested to hear any experiences good or bad. Please share them here.

My brother has 6 healthy vending machines he started about a year ago. I am thinking of joining him in it and getting him to expand. He bought his machines for 6000 each from a company (a legit one, there are some healthy vending ripoff companies out there though). The company was pretty nice, trained him on it, and helped pick out locations for his machines. The machines are new as well , come with a 3 year warranty, American made, and take credit cards as well though most of his business is in cash (90%). There are no royalty fees or fees at all to the company he purchased the machines from. All of his machines are in gyms and martial arts studios. He gives 10% of the profit to the gym/mma studio.

The reason my brother got into health vending instead of regular vending like candy and coke is because he says the profit margins are larger in healthy vending, where as regular vending where it is pretty small. I don't know anyone with regular vending machines so I cannot say.

In the year the machines have been up he has earned an average annual net profit of 3000 dollars per machine so the return on investment is 2 years, which is pretty good. It's pretty consist. You aren't gonna become a billionaire off of it, but it's very safe compared to some other businesses that can fail and if you have enough machines you can earn a decent living.

My father might open up a subway or gas station, but so far I like the results of my brothers vending machines. If he were to invest the large amount into these vending machines that is typical required for a franchise like a gas station or subway he could make a pretty decent living. A subway costs an average of 200,000 start up. That could purchase 33 of these machines which would generate a net profit of 99,000 a year if you can earn 3000 annual profit per machine and unlike Subways which can fail and leave you in a debt hole, in this you will eventually get a ROI even in the worst case situation where your machines are slow earning. Of course, I'd like to see my brother expand more and sustain success with even more machines before any large family investment was made. Also it's pretty cool that you can sit at home, make some money instead of being in an office 9-5.

Any thoughts?
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Old 12-16-2013, 07:14 AM
 
11,779 posts, read 13,665,001 times
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Ok, guy makes 18K a year off 6 machines......you can't give up a real job for 18K/ $1500 a month!

I suspect the 100% success rate on his locations is going to be a hard average to keep up.

Just to extrapolate some dream numbers:

20 machines ($120,000) would generate 60K annually but if you amortize your purchase (120K into 60 payments with no interest, 2k a month/24K a year) which will drag your 60K profit down to 36K a year.....still not enough to quit a decent job! Plus if you have to look at the opportunity cost of the 120K if it was invested in something getting 5-6% ROR while you still had a good job/benefits and figure the whole opportunity cost of "sitting home and making some money!"

More machines = more potential for theft, damage, closed businesses w/landlord keeping your 6K machine (it is written in the lease in many places, any upgrades stay with the landlord).
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Old 12-16-2013, 08:03 AM
 
Location: Wisconsin
7,214 posts, read 8,279,479 times
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Quote:
Originally Posted by City Guy997S View Post

More machines = more potential for theft, damage, closed businesses w/landlord keeping your 6K machine (it is written in the lease in many places, any upgrades stay with the landlord).
That's bunk. A landlord can't keep property from an outside vendor. Such an idiot landlord would find themselves in court.
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Old 12-29-2013, 08:16 PM
 
11,779 posts, read 13,665,001 times
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Quote:
Originally Posted by MaseMan View Post
That's bunk. A landlord can't keep property from an outside vendor. Such an idiot landlord would find themselves in court.

Ummmm no its not. If the property is outfitted with fixtures the landlord usually has all improvements kept in the lease. The tenant signs for the stuff, so the debt stays with the tenant not the landlord. This is done frequently so if the tenant bails on a lease the landlord can more easily re-rent to a similar business (restaurant, hair salon, etc). Now usually if the tenant is smart they bail and take everything with them (heck if they are breaking the lease, following the fine print isn't exactly their forte).

In Florida as a contractor you cannot "repo" anything permanently installed (a/c unit for example) for non payment. You have to sue the property owner. Not saying it isn't done just pointing out it is illegal to take your stuff back for non payment!
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Old 12-29-2013, 08:38 PM
 
48,509 posts, read 86,910,193 times
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Quote:
Originally Posted by MaseMan View Post
That's bunk. A landlord can't keep property from an outside vendor. Such an idiot landlord would find themselves in court.
Sure but the owner of the machines must have a contract that allows entry to property .Even then if a problem occurs then he will be told to leave and seek civil court resolution. Then non payment is filed at same time ;so judge decides likely.Its just part of business.
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Old 12-30-2013, 07:59 AM
 
Location: Wisconsin
7,214 posts, read 8,279,479 times
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Quote:
Originally Posted by City Guy997S View Post

In Florida as a contractor you cannot "repo" anything permanently installed (a/c unit for example) for non payment. You have to sue the property owner. Not saying it isn't done just pointing out it is illegal to take your stuff back for non payment!
Most vending machines are not "permanently" installed, so I'm not even sure what you're arguing about.
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Old 12-30-2013, 01:19 PM
 
11,779 posts, read 13,665,001 times
Reputation: 17175
Quote:
Originally Posted by MaseMan View Post
Most vending machines are not "permanently" installed, so I'm not even sure what you're arguing about.
So when a kitchen is outfitted with new commercial appliances and hair salons have all new sinks/machines then that wouldn't be permanent either right?

You got called out, you learned something so it's all good Mase! The moral of the story for the OP is if the tenant bails, his machine is going to be lost (either to the landlord or the tenant that took it on move out day).

Last edited by City Guy997S; 12-30-2013 at 01:31 PM..
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Old 12-31-2013, 07:57 AM
 
28,904 posts, read 48,367,600 times
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Well, it obviously works for people. If my brother is to be believed, he did that for a while with candy machines and netted about $1000 a month. Sold it off after several years. It was a pretty easy side income, one that entailed a couple of hours on a Saturday restocking and collecting money. Personally, if done correctly, I think it would be a great venture for a college kid.
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Old 12-31-2013, 03:18 PM
 
Location: In a chartreuse microbus
3,866 posts, read 5,522,233 times
Reputation: 8058
Just be aware of the new regulations for vending machines under the ACA "Obamacare" law.

Vending machine overhaul: New health care rules to require calorie information | The Montgomery Advertiser | montgomeryadvertiser.com

Your start-up costs may not be as minimal as they used to be.
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Old 02-29-2016, 11:26 AM
 
1 posts, read 12,457 times
Reputation: 10
what about two machines, one soda one candy, (mechanical machines i would assume) , no credit cards etc,- both of them together are $500- good working condition; the man who is selling them to me is just wanting to get them off his hands and retire. of course if I found a relatively, "profitable" spot, not looking for anything major here about how much (in theory) would I get every month. any where from the highest to the lowest would be an of figure. I just have ZERO idea what kind of deal I am getting initially, but it sounds like a great one...
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