How can you turn $1.00-$2.00 snacks into a steady six-figure business? Ask the Vending Machine King, Jaime Ibanez.
Ibanez is the owner of Vending Bites, a vending machine service that provides businesses snack and drink options for their employees and customers. He is based in the Dallas-Fort Worth area and has over 50 machines in various locations. He started his business when he was only 18 years old. On social media, he is the face of the vending community through his candid videos on what it is like to own, operate, and manage machines.
Ibanez started his business right after high school when he was looking at ways to make money. He remembers how hard it was to start out when he bought a machine in a location and was kicked out a day later.
From that experience, and the many others, Ibanez has learned some good lessons that other vending machine business owners should understand as they start their vending journey. He has partnered up with Classic Cookie (one of his fast-moving snack product brands), to share some tips to help your new vending business.
Here are Jaime Ibanez's 6 tips for you as a new vending machine business owner.
Tip #1 - You Get What You Pay For
According to Ibanez, this is the most important tip for any new vending business owner. While securing a location is the first important step, buying the right vending machine is crucial.
In Ibanez's experience, vending machines can cost anywhere from $300 - $6,000 before adding on accessories like card readers, coin mechanisms, signs, etc. "Nobody wants to pay $6,000 when they get started," Ibanez says. "You don't have to buy the best of the best that looks good, but if you buy the cheapest, they usually are older machines."
Ibanez says that cheaper machines come at a price. He has noticed that the cheaper the machine is, especially when they are used, the less you can do with that machine. For instance, Ibanez cautions, "If you buy the cheapest, they usually are older machines that you can't put a credit card reader on." Credit card readers are crucial for the modern vending business. Parlevel Systems, the creator of the PayPlus credit card reader, did a study where they found that machines in San Antonio, TX with their credit card reader increased average sales by 42% and sold 38% more units on average compared to those machines that did not have the reader. If your machines do not have a credit card reader, you are missing out on potential sales.
Ibanez also elaborates on servicing old machines. "With cheaper machines, you have to change more parts because they are out of service more often," he says. "Because of this, you are going to pay more in parts, especially with drink machines. On [older] soda machines, the compressor goes out. This is the most expensive part of a machine."
Instead of going with the cheapest deal, Ibanez recommends that you do your research on machine brands. He says that you can find a good middle ground on the type of machines you can get. They may not be the cheapest, but they will keep your long-term vending business' costs low. "Two brands I always go for are AMS for combo and snack machines, and USI (or Wittern) machines," Ibanez says. "USI is my favorite because they have a sleek modern look to them with a touchpad. They are the best to put in high traffic locations like office buildings."
While you research different brands, Ibanez also issues a warning. "Buy USA made machines," he says. "Buying machines made in other countries can cause a lot of headaches."
At the end of the day, the old adage of, "You get what you pay for," is true. The cheapest machines will have more technical work for you to do to make sure they correctly operate. Newer machines are stress-free but more expensive up front. If you are willing to take the risks on cheaper machines, just be well informed with your decision. Cheaper is not always better.
Tip #2 - Be Ready to Get 100 Nos
Ibanez's second tip is all about your mindset when finding locations to place your new vending machine. "Be ready to get 100 nos before you get your first yes." To emphasize this tip, Ibanez relates the story of buying his first vending machine.
On getting started with his vending business, Ibanez said the following:
"When I first started my business, I got my first machine by buying one from a previous vendor in a nursing home location. This machine was making money from day one.
"The next day, the nursing home manager calls me and says, 'Hey, we don't want the machine anymore.'
"We had a week to take the machine out. I didn't have anywhere to store it, and I needed to find a new location for it. For hours and hours, I talked to hundreds of different businesses. I started to get stressed out.
"Finally, after three days of constant calling, I got a yes from a barbershop. We placed the machine in the shop, and I still have that location to this day."
*Check out the soft packaged cookies from the photo above: Peanut Butter made with Reese's® Peanut Butter Chips and