Vending — an easy $15-20K a year?

Here’s an honest question from a 48 Days reader:

I have come across an opportunity to buy 100 bubble gum machines (4 tall spiral and many double headed) for $17k. They bring in around 15k-20k a year.  I have never bought anything like this, can you please give any advice you may have and if this is a good investment and what other questions I should ask the seller.  Thank you so much..I didn’t know who else to turn to.

Michelle,

I commend you on thinking about a business of your own.  However, getting these machines at a good price is the easy part.  The ONLY thing that matters is whether you can get them set up in good locations.  Believe me, the machines don’t “bring in around 15k-20k a year.”  They bring in zero unless you have them in killer locations.

Don’t even think about buying any machines until you’ve talked with 20 places where you could potentially put them.  You’re going to find that you cannot put them in most retail or franchise locations.  Any hospital or university will already have a contract in place for all their vending machines.  That means then that you’re looking at Mom and Pop small businesses – where it’s questionable if they have enough traffic to make it work.  Don’t do anything until you secure 10 agreements to place the machines.  Once you’ve done your work on that end you’ll have a lot better sense of what the vending business is all about.    

I love the vending business – many of my most profitable products are essentially “electronic vending” — but  you have to do your homework to make it work.