In a world where so many people are looking for the next business idea somewhere in the high tech universe, the more basic ones are easy to overlook . . . like a candy dispenser business! Interested? Here’s what’s involved.
The Benefits of Starting a Candy Dispenser Business
Why would you want to have a candy dispenser business?
- Simplicity. Like we discussed at the beginning, this is a very simple business that relies far less on technology (and the training that requires) than it does on negotiating skills and a willingness to put in the effort.
- Cash-and-carry. This is literally a cash business, and that means no credit card fees, bounced checks or hassling with banks.
- You can grow as big as you want. You can start with a single machine, then add a second, third, fourth and so on—using the profits from your machines.
- It can work well as a part-time business. If you’re only looking for a part-time business to supplement your income, this one is perfect. It can be done in a few hours a week.
- No employees. You can operate the business all by yourself, and that means no payroll taxes, workers comp, benefits or potential lawsuits.
The Cost to Start
One of the most attractive elements of a candy dispenser business is that it’s a very low cost start-up. Your basic upfront costs are the dispensing machines and the candy needed to fill them.
If you don’t have a lot of cash, you can start with just one dispensing machine. Brand new they can cost well over $100, but you don’t need to pay even that amount. Used dispensing machines aren’t all that hard to find. Check the classified section of your local newspaper and on Craigslist to see what’s available. You can probably get good machines for less than $50 each.
Candy is the next start up cost, and even this is fairly inexpensive. You can find commercial sized boxes of candy and gum balls at common outlets such as Sam’s Club, BJ’s, and Costco.
You should be able to launch your candy dispenser business for under $100. Apart from that, your primary ongoing costs will be gasoline (driving to the places that have your machines in them) and candy for restocking the dispensers.
Where Should You Put the Machines?
This is the single biggest challenge in the candy dispenser business, and it all comes down to location.
Since kids, teenagers and young adults are the biggest consumers of candy and gumballs, you want the machines to be in stores that are likely to draw in that market. Toy stores, hobby shops and sporting goods stores are examples. Hardware stores and auto parts dealers draw a different clientele and probably won’t work as well.
Small shops are generally the best locations. Large stores, schools, factories and office buildings are often difficult to place machines in and even if you can there may be a lot of competition either from other vendors or from the establishment itself.
In addition to the type of establishments, the physical placement of the machines is also important. Since candy and gumballs are impulse purchases you want them to be in the highest traffic areas of the store. Entrances, exits and check out counters are typically the best locations.
Try to get the owner to accept your machines as an add-on service for their customers so you don’t have to pay for the location. Failing that, you may have to work out the payment of a small monthly rental fee, or a percentage of the profits on each machine. This will take some serious negotiating skills, but you’ll have a stronger position if the merchant doesn’t already sell what you have in your machines.
How Much Money Can You Make?
Income potential depends largely on the amount of candy and gum balls you sell from a machine, which is why getting the right location is so important. You may have to experiment with several stores before you find the best opportunities. Once you do, you can generally expect a 50 % profit on the sale of candy and gum balls.
Obviously, the more stores you have machines placed in, the greater the income potential. Once you have a few profitable locations, you’ll have a better feel for what works and what doesn’t and you can adjust and move forward from there.
Working With Vending Companies
When starting out you may be tempted to buy some sort of package deal from a vending company, but that’s not the best course. If you do, they’ll most likely want thousands of dollars up front, and may provide poor grade dispensing machines and a few questionable store locations to place your machines in.
Understand however, that success or failure in the business will depend more on your own ability to find and negotiate strong locations for your machines than any other single factor. That’s a skill that has to be learned — it can never be bought with a package.
A Few More Things to Consider
If you are thinking about starting a candy dispenser business, there are a few more things to be aware of. Because it’s an easy entry business (low cash investment, no special skills), the competition is strong. Many stores you walk into — hoping to place your machines — will probably already have several up and running.
Gas prices are another issue. You’ll be driving from store to store to replace candy and gum balls, and collect cash from the machines, and that will require a good bit of driving. High gas prices can eat into your profits.
While having no employees can be an advantage, it’s also a disadvantage. As your business grows, you’ll need to cover a lot of territory in order to service dozens and especially hundreds of machines. When you do, you may start to think about hiring an employee or two to help make the rounds, but this doesn’t work too well with the candy dispensing business.
Your employee will be collecting cash from the machines, then replenishing them with candy and gum balls. Both can disappear without a trace and you’ll never be the wiser. A single dishonest employee can quite litereally run you out of business.
But if you can overcome the obstacles and get the location and negotiating part mastered, this can be one of the better business opportunities around.
Have you ever considered starting a candy dispenser business? Leave a comment below!