How to Start a Vending Machine Business in India: A Complete Guide

2 minutes

25 January 2024

Starting a vending machine business in India can be a great way to earn money with a small investment. It’s easy to grow over time. This simple guide will walk you through the main steps – like picking the right products, finding the best places to put your machines, understanding legal rules, and checking costs. Learn how to start and grow your own successful vending machine business in India.

Costs to operate a vending machine business

The costs of running a vending machine business can be divided into two main categories:

Capital Costs

These are the costs of buying the machines and any financing fees if you take a loan to purchase them. Even used machines can have good resale value, so this is considered an investment, and the machine is seen as a business asset that loses value over time. Check your business loan eligibility to find out how you can finance your equipment purchase.

Operating Costs

These are the costs of keeping the machine running and stocked with products. Operating costs include:

Rent to the location owner – This could be a flat fee every month, or a percentage of your sales if you place the machine in a shop or other business.
Electricity – If your machine needs electricity to run (like refrigerated machines), you will need to pay for it. Some location owners might include this in the rent.
Stock – This is the cost of buying the products to sell, including any shipping fees and taxes.
Servicing – If you don’t know how to fix machines, you’ll likely need to pay for a service agent or repairman to maintain the equipment.
Insurance – You will need insurance to protect your machines from theft, vandalism, and other unexpected events. You will also need public liability insurance to protect yourself in case customers claim your machine or its products caused them harm.
Upgrades – Technology is changing quickly. Older vending machines that only accept coins are being replaced with ones that accept cards and mobile payments. Depending on how old your machines are, you may need to upgrade them to accept new payment methods.
Permits and Licenses – Some cities may require you to get a permit or license to operate each machine.
Taxes – You may need to pay taxes on the sales from your machines, and the amount can vary depending on where your machines are located.
Management Costs – These include travel costs for restocking your machines, collecting cash, and managing the inventory. You may also need to pay for vending machine software to help you track and manage stock.

Advantages of a vending machine business

One of the biggest benefits of a vending machine business compared to traditional businesses is that you can start it based on the budget you have. Other benefits include:

Part-time income – Once set up, vending machines can earn money with less day-to-day effort.
Good returns – You can get a higher return on your investment compared to many other types of businesses or assets.
Security – If one location isn’t working well, you can move the machine to another spot. This makes the business more stable.
High resale value – Machines placed at good locations usually keep their value and are easy to sell later if needed.
Flexible working hours – You can choose when to restock your machine and manage the business around your own schedule.
Low running costs – You don’t need to hire staff or rent a shop, and the business is often tax-efficient.
Easy to expand – The vending business is simple to grow as you earn more.
Straightforward business model – It’s easy to understand and manage, even if you are just starting out.

Types of vending machine businesses

If a product can fit inside a vending machine and there’s demand for it, you can probably sell it through a vending machine. There are four main types of vending machine businesses:

Food and drinks
Bulk vending (small items like toys, gumballs, etc.)
Specialty vending (things like electronics, cosmetics, or PPE)
Franchised vending (working with an established brand)

Before you choose a type of vending machine business and buy your machine, it’s important to do proper research. Different products may need extra features like electricity, water supply, cooling systems, or even Wi-Fi to work well.

Also, take a good look at what people are already buying in the area where you want to place your machine. For example, an office or hospital is a great place to offer hot drinks, snacks, and sandwiches. Make sure to observe the foot traffic – the best locations have people passing by all day, not just during lunch or rush hour.

Once you find a good spot and understand how busy it is, it’s smart to start with one type of product. This helps you focus, keeps your machine needs simple, and lets you learn about your customers and what sells best. Once your business is running well, you can think about growing – for example, adding a cold drink machine next to your snack machine to give people more options.