🍕 How Lucrative Are Pizza Vending Machines? A Deep Dive

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'm diving into the world of pizza vending machines and their impressive potential for profitability. Here’s what we'll explore:

• The rising popularity

• Insights into profitability

• Best locations

• My approach to launching

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

Business Updates

• 🌐 New website finally launched! Check it out here and let me know what you think!

  🎥 Hired a video editor starting Monday. Expect fresh YouTube, IG, and TikTok content beginning next week!

  📚 Getting close to launching my first course, Vending Machine LaunchPad. Join the waiting list for an exclusive early bird offer.

  🍸 Brought on an Operating Partner in Dallas. She's well-connected in the nightlife scene and will be managing sales & operations for our Dallas market.

  💰 Secured commitments from our first two investors, totaling $100k. Aiming for another $400k in the next 30 days!

  🤝 A massive vape company is proposing a partnership: $200 per activation event at our bar partners, with plans for 5 events per month across 30 locations. That's potentially $30,000 monthly in additional revenue!

  🌴 Finalizing a deal with an LA Operating Partner who has strong connections with local bars & nightclubs for machine placement.

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

🔗 Best Links

Curated picks for vending entrepreneurs

📱 Top Reads

• Inspiring vending business success stories (including my partner Jaime's featured success on the front page) 🏆 (WSJ)

• Japan's vending machine crisis: Why millions of machines are at risk! ⚠️ (The New York Times)

🛠️ Must-Have Tool

• A game-changer for vending machine customer support, every machine should have one! 👍 (ZippyAssist) Use code “ETHAN” for 50% off for the first two months. I’m also happy to make an intro to the owner :)

😱 Trending Now

• Canada’s bold move: Vending machines dispensing free crack pipes and snorting kits outside hospitals! 🇨🇦 (OliLondonTV)

• Meet the very first vending machine! 🕰️ (TikTok)

Out of style: Vending machines selling Snickers, Skittles, Coca Cola, and Pepsi.

In style: Vending machines selling perfume, salad, ice cream, and (for this newsletter issue): pizza 🍕🍕🍕.

We’ll explore the profitability of pizza vending machines, covering startup costs and operational insights below.

Plus, I’ll share my resources to help you launch and profit from this business.

The Rising Trend

Vending machines are transforming the way we access our favorite foods, and pizza is no exception.

These advanced machines are now part of a broader trend in the food service industry where convenience meets quality.

Let's check out these wild pizza vending machines that are popping up everywhere:

• SmartPizza Machines

• ZaBot Pizza Machine

• Revolution Pizza

• PizzaForno

@dhstudios

Not bad! Could use a little more tomato sauce and pepperoni (compared to the photo) but tasty! And convenient! 7/10. #pizzaforno #vendingm... See more

How they operate is quite straightforward:

1. User Interaction: Customers use a touchscreen to make their selection and complete the payment using cashless options like credit cards or tap to pay.

2. Preparation and Baking: The machines either heat pre-made pizzas or prepare and bake fresh ones on-site. This process is typically completed within a few minutes.

3. Delivery: The pizza is then dispensed through a slot, ready for the customer to enjoy immediately.

It's not just about grabbing a quick bite; it’s about revolutionizing how we eat pizza with a blend of speed, convenience, and downright awesome technology!

Profitability Breakdown

Let’s dive into the monthly earnings of these machines (always my favorite part because let’s face it: who doesn’t like money 🤑???)

Here's what the numbers reveal:

Best Locations: Airports, train stations, and college campuses, known for heavy daily foot traffic.

Foot Traffic: Approximately 3,000 people per day during peak hours.

Impressions: Assuming a 10% visibility rate, the machine would get about 300 impressions per day.

Purchase Rate: Let's consider a 10% purchase rate, in line with industry standards for automated food services.

Average Retail Price Per Item: $7 per pizza, considering a mix of plain and specialty toppings.

Daily Revenue: 30 pizzas sold per day at $7 each = $210 in daily revenue.

Cost Breakdown:

• Cost of Ingredients: About $2.00 per pizza, including dough, sauce, cheese, and toppings.

• Commissions: Assuming a 15% commission rate due to premium location privileges.

• Processing Fees and Software: Payment processing and software fees at 2% of sales.

• Maintenance: Averaging $150 per month, covering cleanliness and functionality.

Monthly Financials:

• Monthly Revenue: $210 x 30 days = $6,300

• Total Monthly Costs: $3,021 (estimate)

Profit Breakdown:

• Net Profit: Monthly Revenue - Total Costs = $6,300 - $3,021 = $3,279

• Profit Margin: (Net Profit / Monthly Revenue) = ($3,279 / $6,300) = 52%

Monthly Profit per Machine: $3,279

If you place 3 machines, you’ll earn ($3,279 x 3 =) $9,837 per month in PROFIT.

Who’s going to jump on this? If you’re serious about this, reply to this email and I will be happy to put you in touch with a great supplier to make this happen (and if you’re very convincing, I may go 50/50 with you)!

Ideal Locations for Maximum Profit

Here are the five best locations for placing these machines:

College Campuses

Students often seek quick, affordable meal options between classes. Pizza vending machines can cater to this demand, especially during exam periods and late-night study sessions.

Airports

Travelers often have limited time for meals between flights. A pizza vending machine provides a fast, satisfying option that’s available around the clock, appealing to both passengers and airport staff.

Large Office Complexes

Employees look for convenient lunch options without the need to leave the premises. A pizza vending machine in or near office buildings can serve as a quick meal solution, boosting productivity by reducing time spent going outside to a nearby restaurant.

Shopping Malls

Shoppers and retail staff desire quick meals to maximize their time spent shopping. Pizza vending machines placed in food courts or key locations within malls can attract a significant number of customers.

Train Stations and Metro Stops

Commuters often need to grab a quick bite during their travels. Stations with high foot traffic are an excellent opportunity for pizza vending machines, as they offer a quick, easy meal solution on-the-go.

Getting Started Today

Starting a pizza vending machine business can be a lucrative venture, tapping into the growing demand for convenient food options.

Here’s a step-by-step guide on how I’d launch this business successfully.

Step 1: Build The List

When I'm scouting for locations, I focus on areas brimming with office workers, students, and families, all ideally within a 15-mile radius of where I plan to set up.

I’d compile a targeted list of key contacts like property managers or building owners and meticulously track all interactions in a CRM like Google Sheets or Excel to keep everything organized.

Step 2: Choose the Right Pizza Vending Machine

Choosing the right machine is a critical step. Here's what I consider essential:

• Quality and Reliability: The machine must be dependable and deliver consistently good pizzas.

• Capacity and Speed: It needs to handle high demand quickly, especially during peak hours.

• Customization Options: Flexibility in pizza options is a huge plus as it caters to diverse customer preferences.

I’d explore machines from top manufacturers like PizzaForno, Pizza ATM, and Let's Pizza.

For more budget-friendly options, I often check Alibaba. It offers a range of pizza vending machines at competitive prices, from $5,700 to $9,999.

These machines are loaded with touch screens and multiple payment methods, which is great for accessibility.

Step 3: Secure Funding

To cover these expenses, I’d explore various funding options like applying for business loans or getting supplier financing.

PS. Take a look at my newsletter for insights on how to finance your vending business with options starting from $0 down.

Step 4: Obtain Necessary Permits and Licenses

Before I can operate my vending machines, I need to ensure compliance with local regulations.

This involves obtaining the necessary permits and licenses, particularly from the health department since I'm dealing with food service.

I’d start by setting up an LLC to provide legal protection for my personal assets and open a business bank account to handle all transactions.

I often use services like LegalZoom to streamline this process, making sure everything is established correctly and efficiently.

Step 5: Stock Your Machines

In stocking the machines, I'd work closely with the manufacturer to develop a menu that really resonates with my target audience.

To cater to different customer preferences, I’d stock a variety of pizza options. For example:

• Classic Flavors: Pepperoni, Margherita, and Cheese.

• Specialty Pizzas: BBQ Chicken, Veggie Delight, and Gluten-Free options (and even vegan in cities like LA).

Sourcing high-quality ingredients from reputable suppliers would also ensure that each pizza adheres to food safety standards.

Some well-known distributors include:

• Sysco: A leading food service distributor that offers a wide range of pizza ingredients.

• US Foods: Provides various food products, including pizza ingredients, with delivery options.

Step 6: Develop a Marketing Strategy

For marketing, I'd utilize a mix of social media and user-generated content.

A tactic I’ve found particularly effective, inspired by PizzaForno, involves incentivizing customers to generate content.

They offer free pizza to those who post about their experiences with the machines online.

This not only encourages more people to try out the vending machine but also spreads word-of-mouth and builds a buzz, helping attract a broader customer base.

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!

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.