How To Start A Vending Machine Business


Getting started with any new business can be challenging! There’s so much information to consume and things to learn that many people often don’t know where to start! Here is a quick start guide to get you started on your vending journey in no time!

Register as a Business

The most common question I get from people when starting a vending machine business is, “Do I need a business license?”

My answer is always going to be, YES!

However, laws and regulations vary from place to place, so the best thing to do is check with a professional in your area, like a lawyer or accountant who knows the laws in your area so that you get started on the right foot. You can read more about registering your business with local, state, and federal agencies on the Small Business Administration’s website. This should not be confused with establishing a legal business entity.

Establish a Legal Business Entity

Depending on where you live, you may have to chose a business structure BEFORE you register with your state or local governments. The business structure you choose determines everything from taxes, daily operations, and even how much of your personal assets are at risk. The most common types are listed below:

  • Sole Proprietorship – You are automatically considered to be a sole proprietorship if you perform business activities but don’t register as any other kind of business. This is also a good option for low risk businesses or if you want to test a business idea before making it more formal.
  • Partnership – For two or more people to own a business together
  • Limited Liability Company (LLC) – Has benefits of both corporation and partnership structures and in most cases protect your personal assets against bankruptcies and lawsuits.
  • Corporation – Best for high or medium risk businesses and offer the strongest protection for its owners from personal liability.

Choose the structure that works best for you by consulting a professional and doing a bit of research on your own.

Open a Business Bank Account

You should open a business bank account as soon as you start accepting, but more realistically and commonly, start spending money as a business. Bank accounts provide a layer of protection and professionalism to your business. Business bank accounts often offer features and perks not available to personal accounts and prep your business to grow by applying for credit cards or merchant accounts. You will need at least the following in order to open a business bank account:

  • Federal EIN or SSN if sole proprietorship
  • Business License
  • Business Formation Documents

Apply for a Federal EIN here

Check with the bank you wish to open the account with for all the required documents to ensure you have everything you need. Be sure to shop around at different banks to find the best introductory offers, lowest maintenance fees, and other services that will be beneficial to your business.

 Create a Website

Even though you will be doing business in person, you need a way for people to find you! Yes, I understand that you can create a Facebook or Instagram page, but in my opinion it’s not as professional as having your own website. Also, the people who are searching for vending machine businesses, aren’t heading to Facebook to search, they use Google! Your business’ Facebook page most likely isn’t going to rank on Google and therefore go unseen. You can create a full website if you like or just a simple landing page. There are so many tools that can help you quickly and easily accomplish this goal.

 Find and Secure a Location

Location, location, location! This is the heart and soul of your vending machine business! This is also the pain point of many new operators. Many people find a machine first, only to be defeated and give up by not being able to easily find a place for machine or one that makes money! Another issue you might run into is not having the type of machine the location needs. If you find the location first, you can avoid all these problems!

Download a free copy of 50 Vending Machine Locations to get started!

Purchase Inventory

Buying in bulk from Sam’s Club, Costco, or other wholesale stores will help you to maximize your profit. Many new operators start out and buy their products from their local grocery store. Bad idea! While sometimes you can find items on sale and get a good deal, you’re setting yourself up to be DOUBLE TAXED! Yes, double taxed! You pay sales tax when you buy the products at your local grocery store and then you pay tax AGAIN when you report your sales to the state! In a business where you literally make cents on each product, you need to save where you can! Apply for a Sales Tax Certificate of Exemption and take it to your local wholesale club when you apply for your membership. It will look something like this:

This allows you to avoid paying taxes on your inventory until you report your sales each month or each quarter.

Buy a Machine

Once you have found and secured a location, now it’s time to buy a machine. I recommend buying your first machine from a reseller that provides some sort of warranty, tech support, and even training. You will pay a little more than if you buy from Ebay or Craigslist, but you will have piece of mind knowing the machine will be reliable and you can call someone for help when you need it. Save the bargain machines for when you have a little more experience and know what questions to ask and things to look out for.

Service Machines

This is the one and only thing that will keep you from being kicked out of any location! No amount of commission, cheap prices, or product selection will ensure your spot! You will keep your locations, by servicing your machines, making sure they are filled consistently, working, and most of all CLEAN!

Be sure to check out my Vending Machine Tool Kit so you have everything you need to service your machines and make the job a little easier!

I hope this quick guide helps to get you pointed in the right direction and get started on your vending journey! Join my Facebook group, How To Start a Vending Machine Business for more information and support and don’t forget to subscribe to my email list!

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