What it is like to run a vending machine business

If you want ease, don’t start your own business. Especially once other people start depending on your business, your own personal time becomes a luxury.

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Tough job but you can always play 1-2-3-BABY. At least if you operate condom vending machines.

We surveyed 23 vending machine owners with various-sized operations and found that the average operator in our sample owned 13 machines that gross $309 per machine per month .

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Back in the day I had relatives who ran a video arcade. Every time we went to visit it was lets play the game of counting quarters into rolls. That was the real labor.

Today with coin counter machines in grocery stores that are free if you redeem a gift certificate, I betcha there are a lot of people who just use it as a side hustle to get their shopping fix.

Having visited Tokyo where they still sold beer and cigarettes in vending machines, on nearly every street corner, I have to imagine the Yakuza was heavily involved.

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Is that good? Bad? I seem to remember reading somewhere that a successful restaurant’s revenue goes roughly 30% to food, 30% to wages, 30% to rent/utlities/other costs, and 10% to profit.

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The vending machine business sounds very similar to being a location pinball operator. Far more than arcades, location pinball (and later vids) was the meat of the business. If you saw (see) a pinball machine in a 7-eleven or a laundromat, the business didn’t own that. An operator had placed it there.

With the recent resurgence of pinball, location operation is back, but it’s not really a viable business except as a side hustle. The killer is maintenance. Pinball machines need a ton of maintenance and you need to be an expert at that yourself because you won’t have profit headroom to hire someone to fix them. Like vending machines, pinball machines are also incredibly heavy and difficult to move. The people doing it are mostly hobbyists who have a large pin collection and want to try their hand at operating as a lark (and for a love of the machines).

The new hipster retro-arcades are a mix. Some, the business owns all the machines, while others they just own the bar and an operator is running all their machines for them. COVID is likely to kill all but the hobbyists though. The retro-arcades survive only on the booze, and only the hobbyists can afford to have zero revenue and their machines gathering dust for 6-12 months.

It was always a thin margin business, even in the 1970s and 1980s when the machines brought in hurricanes of quarters. At its peak, an operator would have a warehouse full of extra machines to rotate in and out at dozens of locations all over a city. That insane amount of labor just to play simple video games tells you what a big deal they were to people when there was no other way to play a game.

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As a landed knight of Lord Bezos, I pay 20% tribute to His Lordship for each sale. On some orders I also pay him for postage and for others I am obligated to pay for two day shipping. I pay him a yearly fee to do business in his kingdom. I pay for storage in his warehouses too.

Of course, none of that includes advertising. Which is both necessary and potentially expensive.

I’d think seriously about a solid, dependable 40% of revenue if it could scale like amazon ads do.

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