A mainstay of shops and businesses where kids gather in droves, toy vending machines have traditionally been used to sell small, encapsulated toys at inexpensive prices. However, improvements in the lightweight alloys and plastics used to manufacture vending machines, as well as advancements in the technology that powers vending machine payment systems, have allowed both manufacturers and vendors to get more creative. Today, toy vending machines are more versatile, with the ability to offer branded toys, must-have action figures, plush stuffed animals and much more.

Traditional toy vending machines are coin-operated, but nowadays they can also be configured to accept bills of varying denominations and, in cases where the machine’s application makes it feasible, credit or debit cards. While card payments are usually reserved for toy vending machines selling more expensive items, units with bill verification sensors that make change for customers have become the industry standard. Though the old-school machines which require exact change and vend out of a single coin-activated chamber are still around, they’re rapidly being replaced by newer models driven by more advanced technology.

How to Profit from Toy Vending Machines

The first, most basic and most important principle in choosing a location for your toy vending machine is to put it in a location where large numbers of children converge. Recreation centers, game parlors, bowling alleys, malls and child-themed eateries (like Chuck E. Cheese, for example) are all tried-and-true venues. However, creative thinking can also lead to untapped markets. Lobbies of popular family restaurants, where customers face wait times for tables during peak hours, can be a good spot to locate simpler toy vending machines. Anywhere parents might be stuck waiting with impatient children is a good place to consider; parents who want to keep their kids entertained, quiet and happy are more than willing to buy toys from vending machines to do it.

Another method vendors use to increase revenues at toy vending machines is to install token-operated models. Toy vending machine tokens can be purchased from machine manufacturers, and sold at a rate that adds up to be higher than a coin-operated vending machine would charge for the same toy. For example, a toy that would cost a quarter in a traditional vending machine could be sold for a token in a token-operated model, significantly increasing revenues if tokens are sold for, say, two for a dollar.

What to Sell in Toy Vending Machines

Generic toys specifically manufactured for sale in vending machines are readily available, and they are usually very inexpensive when purchased in bulk quantities. Costs per unit for capsule vending machine toys are normally only a few cents, and can sell for anywhere from a quarter to a dollar. However, the future of the toy vending machine industry lies in selling brand-name, popular toys through high-tech machines.

Children want items on impulse, and parents indulge them; to serve the changing needs of toy vending machine operators better, manufacturers have developed models that dispense packaged toys. Now, items that were once only available in toy departments can be sold virtually anywhere kids go, in vending machines that accept bills of varying denominations as well as electronic payments. The bottom line for vending machine operators is opportunity: with creative thinking and wise machine placement, excellent profits can be achieved and sustained.

School vending machines present entrepreneurs with excellent opportunities to create income streams by selling a variety of foods, drinks and other goods. You should, however, begin your research by looking into laws that apply to school vending machines in your state, county and/or city. You should also be aware that certain jurisdictions, particularly on the county level, have also overtaken the job of managing school vending machine contracts. In such jurisdictions, school boards have complete control over the operation and management of vending machines and usually take half the profits, with the other half being pumped back into the school. Independent operators do not stand to profit from vending machine operation in these jurisdictions, which have turned to self-reliance in an increasingly health-conscious society.

Industry estimates suggest some 20,000 school vending machines are in operation across the United States. Each of them is governed by federal and state laws regarding hours of operation and, more frequently nowadays, the types of foods and drinks that may and may not be sold. Almost all elementary, middle and junior high schools in the country now enforce strict policies which do not allow foods of “little nutritional content,” particularly soda pop, chips and candy bars, to be sold in vending machines. However, high schools that do permit the sale of sweets and treats in vending machines hold the potential to earn their operators high profits.

Consider the following statistics, drawn from a recent study:

• Approximately 71 percent of the items students purchase from school vending machines are soft drinks.
• Similarly, 71 percent of the student body surveyed in the study purchase soft drinks from campus vending machines on at least a semi-regular basis.
• Of students who use vending machines at least semi-regularly, 68 percent of them usually buy at least one snack item in addition to a soft drink.

The study also found that consumption of sugary beverages is higher in schools that are located in close vicinity to fast food restaurants, owing to the habits kids form from indulging in quick, cheap lunches. To the vending machine owner considering operating in a school that permits high-calorie snacks and sugary drinks to be sold, these figures suggest a combination snack-and-soda vending machines placed in a school near a high concentration of fast food restaurants are the most likely to generate sustainable profits.

Stocking School Vending Machines Healthfully

Of course, one way around the restrictions on foods offered in vending machines is to stock them with healthier alternatives. But will kids accept them? It seems they will. Miami-Dade County Public Schools in Florida made changes to high school beverage machines in 2004. Only one-third of their machines still stock soft drinks. Another third offer only low-fat milk, and the remaining third offer water and juice. Water is an increasingly popular choice, and revenue from the more health-conscious machines increased by $400,000.

Yogurt, nuts, string cheese, fresh or dried fruit and vegetable-and-dip packets are popular choices for restocking snack machines. With technological advances in refrigeration, machines that accept swipe cards and other innovations, it is becoming easier than ever before to offer healthy options such as salads, sandwiches and fresh produce to school children.

Especially popular in offices and on college campuses, coffee vending machines now offer more than just coffee. Improvements in technology have promoted a rise in the sale of specialty caffeinated (and decaf) beverages from coffee vending machines, including fresh-brewed cappuccinos, espressos and even iced drinks and teas.

Features of a Typical Coffee Vending Machine

Expect to find a variety of shapes and sizes of coffee vending machines, but shop with a compact design in mind. At the large end of commercial coffee vending machine sizes are models that measure as high as 6 feet, with a unit weight of at least a couple of hundred pounds. Larger units require more electricity to operate, so expect to see power costs increase proportionally with the size of your coffee vending machine.

Beyond the variation in size and weight specifications, coffee vending machines are also equipped to offer a variety of products and features designed to enhance convenience and ease of use. One example of an ingenious touch featured on modern coffee vending machines that drums up additional business is the ability to allow customers to fill their own coffee mugs. These machines are ideal for school or work environments, where much of the traffic around the vending machine is there on a daily basis. Many machines also come with a complimentary service option, allowing for versatile use on special occasions when coffee is offered free of charge.

Where Should You Locate a Coffee Vending Machine?

With more than 100,000,000 coffee drinkers in the United States alone, locating a coffee vending machine near people who enjoy a cup of joe isn’t the challenge–it’s choosing a location where large numbers of people in need of a pick-me-up converge. When you consider that the average coffee drinker enjoys an average of more than 3 cups per day, with 18 percent of those people purchasing specialty coffee beverages on a daily basis, it’s easy to see how a versatile coffee vending machine can become profitable very quickly.

Employers who want to generate a little extra revenue might consider adding a coffee vending machine to the company lunchroom and lounge or break areas. If you’re interested in becoming an independent operator of a coffee vending machine business, consider approaching established companies. Ask whether they’re open to an agreement that will allow you access to the company’s employees in exchange for a percentage of the machine’s intake. Well managed, such arrangements can become win-win situations for employers and entrepreneurs alike.

Where else do coffee drinkers mingle with tired, thirsty folks? Lecture halls and school dormitories, bus and train station waiting areas, airports, hotel lobbies and convention centers, exhibition grounds, entertainment venues…in short, just about anywhere you can think of. When considering a location, anticipate its need for a coffee vending machine by observing the flow of pedestrian traffic, areas where people gather or pass through and what’s available nearby in terms of caffeinated beverages. If you find the right place, earning a strong income can become a simple matter of stocking your machines and collecting your money.