Thanks for this VERY important information Dave!. Much appreciated

Hi Alan:

Speaking from 8+ years in the vending business, you need to have the same permits as you’d need for any other type of business. If you’re not doing business under your own name, then you will probably need to file for a DBA “Doing Business As” and maybe a federal ID number.

You’ll also most likely need a vendors license so you can collect sales tax. Yes, there is sales tax on a gumball, but not candy. You just have to back into the cost of a gumball to figure out which portion is the tax you have to pay. Basically, here’s how you would do it:

Let’s assume your local sales tax rate is 6.25%…

Take your gross and divide by 1.0625. That will equate your actual total sales. Subtract that from your gross, and the remainder would be the sales tax you owe to your state.

Other than all that, make sure you have a good business liability policy to protect yourself in case someone chokes on gum/candy, or pulls a machine over on top of themselves and gets hurt. We carry a $1 million umbrella policy on our vending business. And we label each machine clearly with a “DANGER” sticker about moving or tipping the machine. It’s the society we live in!

As always, check with your own state and local government for any special requirements in your area. Your local Chamber of Commerce might be a great place to start asking questions.

Dave

Do you need a permit to have the vending machine business?. Just wondering

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Hey Brian, what do you think of the Selectivend three-compartment machine at Sam’s Club? Which brand of vending machine do you use/like best?

I have bought a few machines from Sams Club, but they were Saega, not Selectivend. I was happy with the price and quality of the Saegas, and I would tend to trust Sam’s Club in general.

I’ve bought most of my machines on eBay. You can usually get brand new machines for $120 to $150 a piece. I have bought Amerivend in the past, but I haven’t seen them around for awhile. There is a company XYZ Vending that advertises a lot on eBay, and looks similar, but I cannot vouch for the quality.

Great post Brian! It sounds like the vending income is getting better. I’m also intrigued by the eBay stuff you’re doing.

I love selling via online auctions, but I’ve always just been in “garage sale” mode. I’d be curious to hear how you happened to decide on the wholesale products you’re selling. That seems to be the hardest part of selling on eBay — figuring out what to sell.

Cool, thanks for the response. On another topic, I found a cool how-to site that you might be interested in.
http://makeinternettv.org/

Hey Brian, it seems like the hardest thing about vending is actually locating the machines. Do you have any tips on that, or good methods/approaches to use? I liked your article about starting the business, but I am reluctant to use the charity approach. Is locating just a numbers game?

Joe, thanks for that link… I checked it out and it has some great resources on it.

Yes, the hardest part is getting the locations, but it gets much easier after that.

Getting locations is all about sales. Most people hate sales, but then again, most people aren’t rich.

Just walk confidently into a place and ask to speak to the store manager. Find the decision maker and ask without apology.

Realize that many places WANT a vending machine. Their employees want a snack now and then, and they can keep kids busy.

I like to approach large clothing stores with college-aged employees. That seems to be a sweet spot for me. I ask to put it in their break room.

Since it doesn’t compete with their customers, why wouldn’t a manger want to do something that their employees want if it’s free?

When I am approaching people for back-of-the house stuff like breakrooms, I don’t use a charity or offer commission. When you are working on front-of-the house stuff, you need more leverage. Front-of-the-house locations yield more money, but are much harder to get.

You’re right, it’s not a completely passive income source. Like all forms of passive income, there is an active and passive component. Vending tends to have a larger active and smaller passive component.

Check out How Passive is Your Income for a full explanation of my stance on the term “Passive” as it pertains to income.

That being said, I probably spend ten hours a month on my business, which means I make about $70 an hour. At this point in my life, I consider $70 an hour passive because I don’t have any other sources that pay that much for driving around, thinking, and listening to the radio. I actually look forward to my vending days because it’s relaxing.

While I enjoy ten hours a month of driving around, I’m not interested in much more. That’s why I’m capping my locations at about 50.

I’m also making adjustments that will improve my per-machine return and decrease the frequency with which I need to service them.

Once my other income sources pass up vending, there will be a point when I phase it out or sell the business because relativistically speaking, it won’t be passive to me any more.

Thanks for your input Jeremy!

The vending machine business has always intrigued me when someone calls it a passive income source. I understand that you set it up and place the product and that you are not there to necessarily take the orders, but as you indicated, this could turn into a part-time job.
I would be curious to know how much you make per time spent. It seems as though it is a time-intensive revenue of “passive income”. But I would be curious to your findings as to how much time you spend collecting the coins, filling the machine, cleaning the machine, maintenance, transport (you did say you have two businesses, one in Texas and one in California?) and with all the time involved is it really worth it?

It is great to see you branching out into some of the more emerging realms of passive income: such as blogging, eBay and also utilizing more tradition sources as well such as real estate (though you do not show any passive income yet) and network marketing.

I have found that hedged Forex trading provides a fantastic return for the time allotted (about 15 minutes a week), also paid advertising programs offer website owners a double whammy by promoting their site/blog and getting paid to do so. Progressive real estate bulk deals offer a new and very exciting passive income source where your principal is not at risk though the investment continues to grow with appreciation. Private corporate pools are also offering a great return if you know where to find them.

I will be looking for your time vs income analysis, please let us know.

Sincerely,
Jeremy S.Collins
http://www.selfwealthmanagement.com

Компьютерные игры — копируют игровую механику настольных, но при этом позволяют пропустить … http://cashflow.com.ru/ Passive Income Report :: March 2007