Are You Looking to Start a Vending Machine Business?

In this video, Matt reacts to this advice on starting a vending machine business. While some are successful at it, others aren’t. Watch this video to learn more about the business model and what makes a successful vending machine business. If you’ve thought about it, make sure you check this video out first.

There are tons of people out on social media giving business advice. Some of it is good advice, but most of it isn’t good. In this new series watch CapForge’s owner react to different advice videos. He’s an expert in all things business and has 20+ years of experience under his belt. Some of the things he reacts to might even surprise you! 

Video Transcript: 

Business Advice Video:

I taught my kids how to start a vending machine business. I told them a vending machine cost $2,000. It cost $200 to restock the vending machine every week. So the first thing that you need to do, you gotta earn $2,000. Dad how am I gonna do that? Do all of these projects at home, you can earn the $2,000 plus the $200 of food that you’re gonna stock it with. Hey dad, what’s the next thing I do? You’re gonna every week put $200 of food in it and people are going to buy that food for $400. what’s your profit? There’s $200 left over. I said great now that’s called profit. You do that every single week. How much you gonna make in a month? That’s $800. If you pay $2,000 for the vending machine, how long will it take to pay it off? Dad it’ll take about two and a half months and the vending machine will be paid off. I said good now you have a business that is free and clear, what should you do with your next profit? Dad buy more vending machine. Here’s what my kids learned, basically bought them into a business that was all paid for inside of a year. Now they’re making more money than the average adult in America.

Matt’s reaction: 

Okay sure, vending machine businesses can make money. I don’t know why you need to sit at a table with cash stacked up to prove your point. Yes, you can go to the bank, get a bunch of money out, and stack it on a table. Does that make you look more credible? I don’t know. I don’t personally I think it takes away from your point. You don’t see Warren Buffett giving advice sitting on a sitting on a desk with money stacked up around him. Although he certainly could as one of the world’s richest people. But I don’t think we need to do that to be taken seriously or give business advice. 

The missing ingredient to his suggestion of collect 2,000 dollars, get a vending machine, and then immediately start making $200 a week, is you have to find a place to put that vending machine where people are willing to buy $400 worth of candy bars and other crap each and every week, week in and week out. That is the hard part of the vending business. Buying a machine is no trick at all. Stocking it is no secret. The whole trick, the entire trick to a vending machine business, is having a vending machine in a location where it makes consistent sales. If you have a location like that you may need to share some of that revenue with whoever’s location you’re in. If you’re in an office break room or something, that office may want 50 bucks a week to let you have a space that makes you 200 bucks a week. So that cuts in your margin too. But really the whole thing is finding that location. So if I was advising his kids, I’d say before you go buy a vending machine find a place that will let you put in a vending machine that has enough foot traffic to make you that kind of money. Cause if you can’t find that you bought a 2,000 dollar vending machine and you put 200 dollars worth of candy in it and now that’s sitting there every week making you nothing.