🍫 How to Buy a Vending Route (And Increase Its Value 10x) 💰

Hey there, Vendpreneur!

Welcome to Becoming a Vendpreneur—where every week I help you navigate the challenges of running a vending machine business, whether you’re just starting out or looking to expand your operation.

This week I want to walk you through 6 steps on how to buy a vending business (AKA vending route), and increase its value 10x.

Here’s what we’re covering:

• Step 1: Locate a Route

• Step 2: Make Contact

• Step 3: Negotiate and Purchase

• Step 4: Finalize Legal Details

• Step 5: Upgrade Equipment

• Step 6: Expand Your Business

But before we jump into more details, I want to share a few quick updates on my vending business, Pod Plug:

Business Updates

• 🤝 Flew to Dallas for 48 hours to show our franchise consultant from iFranchise the inner workings of our software and merchandising operation.

• 💰 Closed 2 deals at a couple Dallas gay bars, expecting an additional $5,000/mo in revenue. Installs will take place next week!

• 📈 4 very warm deals in the pipeline in Dallas. Expecting to close them in the next couple of weeks.

• 🎁 Trial of our first in-house mystery bag items was a big success. Ordered more and different ones. Pictures coming soon!

• 🤠 Spoke to a potential Texas franchisee with extreme interest, but couldn’t divulge too much info b/c our legal docs are in progress.

• 🆘 Helped a fellow Vendpreneur from our community get started and secure his first location!

• 🤖 Update on new design for smart machines, featuring "The Vend Man." You’ll see him very soon.

Now, let’s get into this week’s newsletter!

Nearly 50% of startups crash and burn within 5 years.

But when you acquire an existing business, your chances of success soar to 90-95%.

Enter the vending business: your express lane to financial freedom.

Low initial costs. Excellent ROI. Unlimited earnings potential.

Now’s the perfect time to jump in. Many veteran operators are retiring, opening up lucrative routes for sale.

Read on to discover how to purchase a vending route (and boost its value tenfold):

PS. You can always start your own vending route from scratch. Bookmark my step-by-step guide below to learn how to do it yourself:

Step 1: Locate a Vending Route

Each vending route is unique. Some operators manage just one machine, while others oversee 100+.

For some, it's a part-time hustle. Others turn it into a full-time business, generating over $100,000/mo (Pod Plug’s at $85,000).

Thinking of buying an existing vending route?

It all comes down to your goals and local opportunities.

Start your search by targeting high-traffic areas:

• Office buildings

• Warehouses

• Hospitals

• Schools

• Gyms

• Malls

These are prime locations for a thriving vending business.

How to get the best deal: anything selling for under 1x annual revenue.

Example: If a route does $30,000 in annual revenue, don’t pay more than $30,000. Anything under should be a very solid deal. I’ve seen routes sell for over 2x annual revenue.

Here are my favorite sites to look for routes:

• OfferUp

• LoopNet

• Craigslist

• BizBuySell

• Vending Connection

• Facebook Marketplace

Simply type in keywords like "Vending routes in [Your City]."

It's that straightforward.

Now, let’s dive into Step 2 👇

Step 2: Make Contact

From there, pinpoint the "ideal route." But what makes the ideal vending route for sale?

Here’s what to look for:

• High Foot Traffic: Offices, schools, gyms, and factories with lots of foot traffic.

• Consistent Revenue: Steady, predictable income with at least a year's sales data.

• Low Operating Costs: Keep product costs, machine maintenance, and commissions low.

• Reliable Machines: Well-maintained machines from reputable manufacturers. My favorite USA manufacturers: AMS, Crane, USI (owned by The Wittern Group), VE Solutions.

• Strong Contracts: Solid agreements with location owners for stability.

• Machine Inventory: Full list of machine make, model, and condition.

• Route Efficiency: Compact, efficient routes save time and fuel.

• Reason for Selling: Understand why the route is for sale. This is key. The ideal sellers are people looking to retire or moving to a different city.

• Growth Potential: Opportunities to add more machines or better locations.

• Low tech: Missing card readers are a great sign, because once added, cashless sales have proven to increase sales by 35%!

A strong vending route will have 10x potential and sets you up for long-term success.

Step 3: Negotiate & Buy The Route

Time to negotiate with the seller.

Typically, what you pay should align with the route's annual revenue. A great deal is under 1x annual revenue.

You can buy at that price and sell at 2x.

However, if the machines are older and the operator is retiring and eager to sell...

You might secure the route for between 70-80 cents on the dollar!

Negotiations might take some time, but don’t go over 1x annual revenue. This is your baseline.

🚩 Red Flags to Watch For:

• Locations are unsafe.

• Locations are brand new.

• No records of tax or sales tax payments.

• No formal contracts with the location owners.

• Requests for a deposit before machine inspection.

• Machines in poor condition, dirty, broken, or outdated.

When you're set on buying that vending machine route…

Approach the seller with an offer (or make a counteroffer to the listed price).

Make your move.

Step 4: Finalize Legal Details

After you've negotiated a fair price, it's time to seal the deal with a bulletproof contract.

Ensure it clearly details the price, payment terms, included assets, warranties, and protections.

Double-check all financial statements, contracts, and legal documents from the seller.

Here are essential documents to prepare and review:

• Bill of Sale

• Tax Documents

• Lease Agreements

• Purchase Agreement

• Indemnity Agreement

• Assignment of Contracts

• Non-Compete Agreement

• Warranties and Representations

Get everything in order before you sign.

If you want any of these agreements, simply reply which documents you’re looking for to this email, and I’d be happy to share them with you.

Step 5: Upgrade Equipment

You've secured your route, now let’s make it profitable.

If the machines are very old and you bought the route at under 80 cents on the dollar, it may make sense to swap them out eventually, but a slow rollout would be smart.

As a reminder, here are the best USA manufacturers:

• USI

• AMS

• Crane

• VE Solutions.

They offer zero-down financing for all types of machines.

Other upgrade essentials:

• Implement cashless payment systems for credit/debit cards and mobile payments, including Apple Pay and Google Wallet. The top two in the industry are Nayax and Cantaloupe (I use Nayax). If you want an intro, reply to this email.

• Use energy-efficient LED lighting to enhance visibility in low-light areas. These are cheap and can be found at AVS, one of my favorite vending parts suppliers.

For the inventory:

Don’t just refill with what the last owner stocked. Opt for products with better profit margins and ones you think may increase sales by localizing to the location.

Example:

• You buy a route of machines in gyms.

• They currently sell chips, candy, trail mix, and water.

• You can start selling protein bars, protein shakes, Celsius (very popular energy drink), shaker bottles, towels, and a lot more.

• Sales could increase 3-4x if you sell the right products.

Now, onto the final step!

Step 6: Expand Your Business

Once you’re established, the real challenge begins: increase your business value tenfold.

• Always have best-sellers available. These are crucial for consistent revenue.

• Remove slow-selling items. Replace them with products that are in higher demand.

• Pilot new products in a few select machines before implementing a widespread rollout.

• Utilize on-machine advertisements to feature new and popular products (and can monetize with 3rd parties).

To scale effectively, continually prospect for new locations.

PS. Check out the last week’s newsletter on how to create a killer prospecting list to find the best locations (AKA ‘The List’)

And that’s a wrap!

Follow these tips rigorously, and you'll see tangible growth within months.

Thanks for reading this week’s newsletter.

Hit reply and let me know what you found most helpful this week—I read every single reply and I’d love to hear from you!

See you next Saturday!

-Ethan

Whenever you're ready, here are 3 free resources that can help you:

1. Cold Call Scripts: Get the confidence to cold call like a pro. My guide provides you with tried-and-true scripts to approach potential vending locations and turn conversations into contracts.

2. Cold Email Scripts: Break the ice with decision-makers using our effective cold email template. It’s designed to capture attention and spark interest, helping you start valuable conversations and grow your business.

3. Location Contract Template: Nail down the best spots for your vending machines with a rock-solid contract template. This easy-to-use template covers all the bases, so you can secure prime locations without the hassle.