Initial Setup and Investment
- Machine Cost: ~$7,500 - $9,500 (delivered with proper shipping terms).
- Bulk Supplies: ~$500 (includes sugar and sticks).
- Total Startup Cost: Under $10,000.
- Shipping Advice: Use Delivered Duty Paid (DDP) to avoid surprise shipping costs (~$3,000 extra).
- Top Vendors: Side Vending
Location Strategy
- Crucial Step: Secure a location before buying the machine to avoid risk.
- Best Outreach Methods:
- In-person visits are most effective.
- Cold calling and emails are alternatives; paid ads don’t perform well.
Operations and Maintenance
- Cleaning Schedule:
- Clean after every 100 servings to maintain quality and appearance.
- Deep clean (burner cover, furnace head) weekly or bi-weekly.
- Restocking Frequency:
- Machine holds up to 300 servings; refill after about 150 servings.
- Key Spare Parts:
- Furnace, water pump, sugar motors — essential to avoid downtime (shipping parts takes 1-2 weeks).
Ongoing Costs
- Liability Insurance: $100-$150/month (depends on location).
- Cleaning Service:
- 1-3 cleanings per week; pay cleaners ~$50 per visit.
- $50 cleaning cost for every $1,000 in revenue (5% cleaning expense).
Revenue & Profitability
- Cost of Goods: ~$0.30 per serving.
- Selling Price: Up to $10-$15 per serving.
- Profit Margin: Insane markup — buying for $0.30 and selling for $10.
- Potential Revenue: $1,000 for every 100 units sold.
- Goal: Distinctive Vending projects $500,000 in revenue for 2024.
Challenges
- Machine Downtime: Machines will break; comfort with basic maintenance is essential.
- Expectation vs. Reality:
- Not a plug-and-play business.
- Requires regular visits to maintain and repair machines.
Summary Strategy
- Location first, then machine.
- Control your shipping terms to avoid hidden costs.
- Outsource cleaning for passive income.
- Buy spare parts in advance to avoid downtime.
- Huge margins but comes with maintenance demands.