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 dive into the growing trend of coffee vending machines. I'll break down:

• Potential earnings

• Best locations

• Right machines to buy

• Pros and cons of the coffee vending business

But before we jump into more details, I want to share a few quick updates on my two vending businesses, Pod Plug and Vending Machine LaunchPad (VMLP):

Business Updates

• 👔 Tapped a specialized COO recruiting firm named Vision Spark - $25k investment that'll be worth every penny to get the right person in this crucial role. We want them to be based in DFW (Dallas/Fort Worth)

• 📚 Gary Vee's new book has become our marketing bible - the whole team dove in and Pat, our Head of Marketing, crushed it with an actionable presentation on implementing these strategies at Pod Plug

• 🎯 Regrouping on our procurement manager search - interviewed some promising new candidates after our initial pick fell through

• 💼 Wrapped up final rounds with a rockstar Business Development Manager candidate who'll be building out our franchise and sales CRMs in Hubspot

• 🤝 Held my first ever investor meeting and it was quite therapeutic by speaking about the achievements and challenges/learnings over the past month.

• 🚀 Big moves at VMLP: Onboarding our first two salespeople next week and prepping for our hard launch!!

• ⚡ VMLP's Go High Level CRM is ready to roll - can't wait to see our sales team tear it up (completed in just 10 days!)

• 🎓 Launching my first free webinar on Dec 4th to share how Jaime and I built our $140k+ monthly vending empire. Stay tuned for the invite!

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

🔗 Best Links

Curated picks for vending entrepreneurs

📱 Top Reads

• The global coffee market is projected to grow by 3.01% from 2024 to 2029, reaching $108.40 billion by 2029. (Statista)

• This Malaysian engineering grad started a robotic vending machine business that’s now in 60 locations. 🤖 (Vulcan Post)

😱 Trending Now

• Would students love a beauty vending machine at their school? See how Sephora is testing the idea. 💄 (TikTok)

• A mysterious vending machine in Seattle that had everyone talking. 🕵️‍♂️ (YouTube)

Did you know that:

• Nearly 3 in 4 Americans drink coffee daily.

• 36% of people drink 3 to 5 cups of coffee a day.

• 51% of people buy coffee from a coffee shop at least once a week.

So, how can you tap into this trend?

Starting a coffee vending machine business. ☕

People want fast, high-quality drinks, and these coffee vending machines can deliver both. No wonder aspiring entrepreneurs are jumping into this. 🤑

If you want to break into the coffee industry with vending machines, here’s how much you can make and how to get started. 👇

How Much Can You Earn?

Coffee sold through vending machines often has a markup of 300% or more, giving operators solid profit margins per cup.

For example, if a cup costs $0.50 to make, it could sell for $2.00 or more.

Here’s how profitable a coffee vending machine can be:

• Location: High-traffic areas like office buildings, universities, and transit hubs can get 2,000 to 5,000 visitors a day.

• Engagement: Let’s say 20% (around 400 people) notice the machine.

• Sales Conversion: If 5% of those people buy, that’s 20 sales a day.

• Pricing: Each cup sells for $2.00.

• Monthly Revenue: That’s $1,200 per month from one machine (20 sales x $2.00 x 30 days).

• Costs: Coffee and supplies cost $0.50 per cup, which totals $300 per month for 600 cups sold.

• No Commissions: Positioning the machine as an amenity (like in an office) lets you avoid commission fees.

• Operating Expenses: Maintenance take another 10% of revenue ($120).

• Net Profit: After expenses, you’re looking at a profit margin of approximately 65%, or $780 a month from a single machine.

With machines priced around $3,000, you can break even in just under 4 months. After that, it’s pure profit! *cha-ching* 💸💸💸

With 5 coffee vending machines in operation, your monthly profit could hit $3,900.

How To Choose The Best Location?

To make solid earnings, picking a location with at least 100 people and running for over 10 hours a day is key.

This could include:

• Busy office buildings

• Train stations

• Universities

• Hospitals

• Airports

The right location can seriously boost your earning potential.

P.S. I've put together a guide on finding the best locations for vending machines. Check it out here:

What Is The Right Machine?

High-end coffee machines can cost around $10,000 each.

My business partner, Jaime Ibanez, suggests going for a more budget-friendly option, like from the brand Confection, which runs about $6,000.

And if you’re really on a budget, a smart move would be to check out Alibaba. You can find machines priced between $2,000 and $4,000.

It’s worth exploring to get the best deal that fits your budget.

Pros and Cons of Coffee Vending Machines

Here’s why coffee vending machines are a promising business opportunity:

✅ Accessibility: Perfect for high-traffic spots like offices, universities, and transit hubs.

✅ Cost-Effectiveness: Cheaper than running a coffee shop and appealing to budget-friendly customers.

✅ 24/7 Availability: Unlike traditional coffee shops that have set hours, vending machines can operate around the clock.

But be ready for:

❌ Maintenance: Regular cleaning and restocking are a must. Poor upkeep leads to bad coffee and unhappy customers.

❌ Initial Investment: New machines come with a hefty price tag, and you’ll have to budget for ongoing expenses.

❌ Competition: You’ll face competition from traditional coffee shops that offer a social experience and higher perceived quality.

And That’s a Wrap!

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. 📚 Ultimate Guide to Starting a Vending Machine Business: a 90-page comprehensive and actionable guide on kickstarting your vending empire.

2. 🎭 Cold Call Scripts: Boost your confidence and convert conversations into contracts with my field-tested approach to reaching out to potential vending locations.

3. 📄 Location Contract Template: Now once you’ve secured your prime spot using the cold call scripts, it’s time to use my lawyer-built contract template. All your bases will be covered here.