The new Hot Side Hustle is… Own a vending machine? How this 31-year-old used them to make $340,000 last year
Growing up poor in upstate New York, Marcus Gram never imagined he could achieve financial independence. He just wanted to earn enough money to give his son a better life.
“After I got my master’s degree, I struggled to find a stable job in my field,” says the 31-year-old. “I kept getting fired.” Gram eventually landed a steady job at an assisted living facility that paid $30,000 a year.
“On the outside, people thought I was fine. In reality, I was broke and struggling to survive.
As American households continue to battle inflation, some are turning to the sublease economy to make ends meet, renting out smaller assets – such as cars, swimming pools and bicycles – and even commercial devices, such as vending machines. Gram began buying and renting vending machines as part of his day job. After hesitating at first, he found his stride, turning the revenue stream into a full-fledged business, Joyner Vending, which generated more than $340,000 in revenue in 2021 from 25 vending machines in four states.
Here’s how Gram got into the very niche vending machine industry — and how you can do the same to jump-start your next source of passive income.
In the event of a setback, circulate the money
To save money, Gram moved in with his mother and asked an uncle for career advice. The uncle introduced him to the real estate business, advised him on how to get started, and suggested he partner with someone who had experience in the industry. After skimping and saving $10,000, Gram and a friend pooled their resources to try their hand at homeownership in Philadelphia. The friend suggested Gram move to town to increase his chances of success.
“It was a tough decision because I was afraid of losing my regular salary, but I thought it was less risky to bet on myself than to work in a job that I could lose at any time for any reason,” he said. Gram found a new full-time job in Philadelphia and worked on his real estate aspirations as a potential hustler.
Side hustles that earn money semi-passively can be a great way to build up your emergency fund or save up for big expenses. You can maintain a full-time job and run the business in your spare time while enjoying the best of both worlds.
Unfortunately, cheap real estate deals in Philadelphia were too rare. Gram needed more money to play the real estate game, so his friend informed him of an unexpected source of extra income: vending machines.
The business partner revealed that he owned snack and soft drink vending machines that generated thousands of dollars a month. So he showed Gram the ropes and helped him get started. Gram signed up for an online course to learn more about the industry, created a website, bought polo shirts and hats with his logo, and ordered a few boxes of business cards.
Take action, even when things don’t go as planned
Despite the mentorship and information from the online course, Gram struggled at first. “It took me a few months to finally land my first client,” he says. He eventually convinced a law firm to allow him to place two machines in their office. He spent about $5,000 to buy two refurbished vending machines, stocking them with snack foods and soft drinks purchased at Costco.
The location turned out to be a lemon: the machines only brought in $60 after running for five months.
“I was so excited to find my first client and start making money that I didn’t do a proper site assessment to determine if the office had enough foot traffic,” says Gram. After learning from his mistakes, the budding entrepreneur canceled the law firm’s contract and moved the machines to another location with better foot traffic. The pivot was lucrative; the machines brought in an average of $1,500 per month in revenue in their first three months.
Vending machines: boring and reliable with little competition
According to a market research report titled Vending Machine Operators Industry in the USA published by IBISWorld last May, the vending machine industry represents a market of approximately $10 billion. However, the market is largely fragmented, with the top four operators accounting for only 3.2% of total industry revenue.
Gram says anyone can buy a refurbished vending machine for as little as $2,000 to $3,500, and the key to building a profitable vending machine business or business is to do your homework. advance.
“You need to find your location first and assess its potential for success before you buy machines for that location,” he says. In some cases, refrigerated vending machines work best, while other locations are more suited to combination vending machines that offer both drinks and snacks.
Once you’ve locked down a site, the entrepreneur advises thinking about the following variables:
- The type of vending machine you will use. Determine if you will distribute snacks, chilled beverages or a combination of both.
- Where you will buy your products. Sam’s Club or Costco are popular options.
- The types of products you will sell. Think about the demographics of the people who will walk past your vending machine.
- How you will collect payment. Older customers prefer to pay in cash or coins, but collecting your money can be a hassle. If you equip your ATM with a credit card or an Apple Pay terminal, the money will go directly to your bank account.
Use your momentum to scale your business
Over time, Gram expanded its vending machine business enough to hire employees to support many locations. His cold calling efforts and traffic to his website has resulted in him having many potential clients to pitch his services to. Gram even hired his sister to run operations and manage his employees in Philadelphia while he expanded into other cities.
“When the world shut down due to the pandemic from 2020 to 2021, I started looking for ways to grow my business,” he says. “I called trucking companies, warehouses, and sports facilities still in operation, and introduced the respective site managers to the benefits of having my vending machines at their sites.” The entrepreneur’s business generated more than $340,000 in revenue in 2021, according to documents reviewed by NextAdvisor.
“The vending machine business is a semi-passive income business,” he says. “Selling products is passive, but making sure those sales are consistent and customers are happy takes effort.” Gram thinks the business can grow into a multimillion-dollar business in a few years, and once he hits his income goal, he plans to start investing in real estate so he can retire early. .
Start earning more money today
Vending machines are a slice of the sublet economy that can go up or down as much as you want to generate passive income. If you’re willing to work hard to make the business a success, you may be able to use a similar approach to achieve financial independence sooner than you think.
“There are still plenty of untapped opportunities for hungry entrepreneurs,” Gram says.
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