The five big tips for starting this business from Marcus Gram’s CNBC YouTube appearance:
1.) Never buy a machine before you have a place to put it.
2.) Find a good place with foot traffic (e.g. apartments, hotels, motels, student housing, motels, and student housing)
3.) Don’t get overcharged on a machine Vendo 511s should run $1500-3500, AMS snack machines should run $1500-5000, and Crane National 449s (this is for places where only one machine can be placed) should run $3500-7000 all depending on condition. Getting a good price will make your ROI faster.
4.) His top selling products are Red Bull, Coca-Cola, Peanut M&Ms, Nacho Doritos, and Lipton Iced Teas
5.) He sources his products from Sam’s Club, Costco, and a local vending distributor. Basically buy in bulk.
He didn’t go into detail on agreements made with locations, theft, or sourcing product. I know from my own trips club stores will place limits on the amount which can be bought per store trip, so naturally as you scale you would need to find a distributor and lease/rent/buy/build a warehouse with a loading dock to receive product. I know some machines in some locations need a cage to be protected from smash and grab theft.
Indoor locations are probably ideal for this reason. As for doing profit share vs. renting agreements with the locations he did not go into detail there, but I imagine as he scaled he had better margins.
