Gumball Vending Machines (A good business idea?)

Would you like to start a gumball vending machines business? In this complete guide, I’ll walk you through everything you need to run your own operation. At the end of the guide I’ll give you my verdict on whether or not this is a good business idea.

Owning a gumball vending machine business looks like a great way to start making some passive income quickly. There will always be a market for the candy machines as long as there are kids (and adults) who like sweet treats and bubble gum.

So let’s get right into it.

The basics

Before you do anything about starting a vending business in the United States, you need to get some basic questions answered. Like any business, there is some risk involved in running a gumball vending machines business. So before you commit to anything when it comes to candy machines, think about the following.

Is a gumball vending machines business for you?

It’s a sensible question. If it isn’t you could be facing years of trouble chasing a business that just won’t work for you. There is a lot of hard work in running an operation like this, so you need to think about:

  • Do you need to earn some extra money? This is not as straightforward as it sounds. You will have to work hard and invest both time and money into the business. If you really need to earn extra money, that’s fine. But your need has to be great enough to make the kind of sacrifices required
  • Do you know where you would place a machine? Have you spoken to local businesses that might like a machine inside or outside their premises? If you haven’t, would you be comfortable and confident enough o approach business people?
  • Have you got the time for basic maintenance of each machine you own?
  • Do you know what the costs are for the business and can you manage these (especially in the early days?)
  • Would your local area benefit from such a machine? Are there many around?

It’s important to take the next few steps very carefully. A well-planned business leads to good execution.

Find a supplier of gumball vending machines

Before you start launching into a huge list of suppliers, know that there may be a few duds in there. It took me some time to find a supplier I would trust with my money.

After looking at the various options online, I found a site called Gumball.com. I’m not an affiliate, so don’t worry. This is a genuine site I found that offers a good range of brand new commercial gumball machines and stock for the machines. It also has a handy set of resources too. 

It also has contact details and a guarantee. These two aspects are what I always look for first when choosing a candy vending machine supplier. The company is in California.

I’ve also taken a snippet from the site’s FAQ section to show how it calculates profit:

How much money will a gumball machine make?

Revenue varies from machine to machine. The success of your machine will be dependent upon one key factor: location. The higher the traffic area & the right kind of clientele for the product you’re vending, the more product you will sell. The products themselves have different rates of return. Gumballs will typically have the highest rate of return.

Example: one case of gumballs will make $220 in profit?

Here’s how…

– Buy one case of gumballs (1080 pieces) = $50 product cost

– Sell one case of gum or 1,080 pieces x 25 cents each = $270 revenue

– $270 revenue – $50 product cost = $220 Profit in your pocket

From Gumball.com

I’m not going to go into suppliers much more in this post, but suffice to say, when sourcing machines, due diligence is important. The best way to make sure you are buying from reputable suppliers is to contact them. 

Supplier list:

Candymachines.com

Gumball Machine Factory

Gumballs.com

Toy Vending Supplier (Europe)

The above suppliers seem to have a wide range of machines, including carousel gumball machines and other candy dispenser units. There are also giant gumball machines as well as classic machines that you will remember from your childhood.

Look at the foot traffic 

Unless you have a clear idea of the foot traffic in the area where you are planning to install your gumball vending machines, as a business owner you could be setting yourself up to fail. 

You could simply just hang around the area for a while and see how many people pass through. But there are other ways to do it.

I’ve pulled together a small list of sites that can help you zero in on the foot traffic and/or general demographics for your local area. Use these to start your search for a good place to set up shop with your machine.

Placer 

This site focuses on existing businesses (like stores etc.) so you can gain a good idea of which places are best for foot traffic.

Area Vibes 

Here you will find demographic data so you can take a look at the lifestyle of a local area. Good for a general view of the people in a place or zip code.

Location One

Plenty of information here. Some has to be paid for though, but probably one of the best and most detailed services.

Tips on finding locations

This is perhaps the most difficult part for some entrepreneurs. But you won’t get the best results unless you take a proactive approach to finding high traffic areas for your candy machines. 

So let’s get into it.

Now that you are committed to building a gumball machine business, it is important that you stay on the lookout for good locations. Foot traffic is key, but if you see a gumball machine somewhere, it may be worth thinking being somewhere near that location or place of business. It’s usually a good bet that people are used to buying candy from machines in that area.

There are some locations that I have found to be particularly effective for gumball machines. For example, you could investigate:

  • Shopping malls
  • Bowling alleys
  • Restaurants
  • Movie theaters 
  • Colleges
  • Coffee shops
  • Office buildings

Arranging to install

Tell the owner of any establishment you’re planning to set up in that you’ll completely service the gumball machine, bouncy balls machine or candy machine in their store when you set it up. 

Let them know that the machine doesn’t require electricity, takes up less than two square feet of floor space, and will provide great service to their customers. Plus, they get a cut of your sales (anywhere from 15% to 33%).

Create a written agreement describing your agreement with the location and offer a commission. You could offer the location manager a percentage of what the vending machine makes. It’s hard to tell how much money a machine will make until it’s operational.

iKrave Vending

By offering a percentage, you won’t lose all your earnings if your machine doesn’t work. Your written agreement has to be of high quality and it may be worth seeking some professional service provider to create this.

After setting up the first machine, find another location and repeat the process.

Choose what to vend

After taking care of all of the above, it’s now time to work out what you are going to fill your machines with. Later, you can even branch out into bouncy balls vending (they’re great fun) but focus on the candy first.

The most popular size for a gumball from a machine is one inch. This does mean that you will have to make sure that whatever machine you buy has a dispensing wheel on it for those 1-inch gumballs. Machines will come either with a gumball wheel or a candy dispensing wheel. You can sometimes even have both and change them when you need to.

When it comes to the one-inch gumballs inside the machine, you have a huge variety of choices available to you. A couple of pointers though. Don’t buy chocolate candy if your machine looks like it will be exposed to sunlight. This is a beginner mistake. 

Also, be aware that it may be a little while before you find the candy that sells well in the area you have chosen. Be ready to spend a bit on experimenting and testing your gumball vending machines. You can purchase bulk candy and it won’t be too expensive so you can test as much as you need to. Search around if you’re worried about cost for the lowest possible prices.

You can buy hard shell candies that will do well even in the harshest of sunlight, but just check with the supplier to make sure they can manage the heat just to be sure.

The break-even amount

Once you have the machine and location, as well as your bulk candy, it’s time to work out the costs involved and the break-even amount. 

Here are the numbers you’ll need:

  • A- The total cost of getting the candy to you (price of candy plus shipping).
  • B- Amounts accepted by your coin mechanism (.25, .50, others)
  • C- The number of pounds of candy you are getting 
  • D = The number of pieces of candy in a pound (found by searching Google)

Calculating the result:

  1. Take A and divide it by B. You will get the number of vends needed to break even = E
  2. Multiply C by D. Using this figure, find the total number of pieces in the candy box = F
  3. Take F and divide it by E. That’s the number of pieces per vend that will break even.

Toy capsule machines

As an additional idea, toy capsules are great fun. There are plenty of options out there for toy capsule machines that come in bright colors and really grab the attention of people passing by. It is well worth considering adding to your gumball machines business with some toy capsule machines as your business grows.

Gumball vending operator spotlight

Before I finish up, I thought I’d take a look at a couple of companies that offer machines and replacement parts.

Global Gumball

This company has been operating for a while (since 1993) and has a huge range of machines and replacement parts. I’ll let them introduce themselves:

We are, Global Gumball, inventor of the original Wizard spiral gumball machines. We have been manufacturing the original Wizard spiral machines since 1993 and are known worldwide for our quality and our professionalism. For years our company has lead the bulk vending industry with unique high quality products. Customers and partners have entrusted their businesses to our machines. All Wizards are manufactured and assembled in the USA.  Most of the components are produced in the USA.  Global Gumball obtains some components from only the best suppliers, such as, Beaver Vending and Oak Mfg.

Global Gumball website.

Rhino Supreme Bulk Vending Machines

Rhino has a huge range and plenty of support. They say:

See what makes our bulk vending machines the best in the industry. From metal sheet fabrication to metal alloy casting, from durable powder coating to elegant chrome finishes, we do it all.

Rhino website

So is a gumball vending machines business worth it?

Like all business ideas, good planning and discipline pay off. If you don’t choose a good location for your gumball vending machines, you only have yourself to blame. If the location is good and you look after the machine, it will make money.

It really is all down to location. I could place a $100 machine outside a car dealership and make $2 a week. Or, I could install one in a shopping mall and make $200 a week.

My advice? Test it. Buy one and research your location well. Then install it and wait and see. After a month, even if it’s made just $50 you’re breaking even after two months. Once you’re in profit, buy another.

They don’t go out of style, and they make money all year round.

Just remember. It’s all about location.

Want to know about setting up your own ice vending machine business? Head on over to this post right here.

How much does it cost to franchise a Starbucks (in 2022)?

Do you want to run your own business? Would you like to run a Starbucks? In this post I go into depth on the options available to entrepreneurs.

Contents:

How much does it cost to franchise a Starbucks?

The Starbucks coffee company brand is huge. There are over 32,000 Starbucks stores worldwide at time of writing, making it the biggest and most successful coffee chain in the entire world. Having a piece of that as a franchisee is obviously an attractive prospect. 

There are many benefits to the franchise model. It’s a quick way to build a successful business, and you have plenty of support from the brand. In this post I will take a close look at Starbucks and it’s franchise options. If you’re interested in hospitality franchises, this one’s for you.

How much does it cost to franchise a Starbucks: What is the Starbucks Experience?

The Starbucks Experience is a way of serving coffee essentially. If you remember the last time you were in a Starbucks, it probably all seemed rather effortless. However, employees are expected to promote the ‘experience’ by focusing on the three P’s:

  1. People. This refers to the Baristas and their relationship with customers
  2. Place. This is all about the place, right down to the unique coffee smell
  3. Product. This refers to the coffee (obviously) as well as the merchandise in the store

The concept is all about the Starbucks values. These were established when Howard Shulz, original CEO of Starbucks, set up the company.

How much does it cost to franchise a Starbucks in 2022?

The first thing you need to know is the bad news. If you live in the United States or Canada you can pretty much forget owning a franchise with this company. Starbucks just won’t let it happen. Instead, the company likes to offer licenses to business owners, rather than franchises.

In 2003, Starbucks CEO Howard Schulz, discussed the rationale behind the approach:

“We believed very early on that people’s interaction with the Starbucks experience was going to determine the success of the brand. The culture and values of how we relate to our customers, which is reflected in how the company relates to our [employees], would determine our success. And we thought the best way to have those kinds of universal values was to build around company-owned stores and then to provide stock options to every employee, to give them a financial and psychological stake in the company.”

Entrepreneur.com

You have more of a chance of franchising a Starbucks in the United Kingdom, where there is a different approach.

So where does that leave The United States and Canada?

Starbucks hasn’t abandoned entrepreneurs. It has a number of different ways for people to get their hands on a slice of the business. 

Seattle’s Best Coffee

Starbucks bought this back in 2003, and it is just one of the ways in which you can capitalize on the brand as an entrepreneur.

Seattle’s Best Coffee has stores and machines all across the United States, and the number of locations is rising. While it may not be considered ‘Starbucks coffee’ it has the full backing of the company. It is generally seen as a great way to start a business with lower costs and little risk.

This coffee is served in businesses too, including retail (You’ll find them at KFC, for example) and there are Seattle’s Best Coffee business units on university campuses and public buildings. 

The marketing and training support is phenomenal, with Seattle’s Best Coffee offering:

  • Messaging and marketing tactics.
  • Marketing ideas to drive sales and trial/repeat purchase.
  • Full line of branded cups (hot and cold) to get the “word out” on your offering.
  • SBC van to drive awareness and trial when you need it.
  • Live launch training
  • Online training support
  • Webinar support
  • Video library

(All information taken from Starbucks Branded Solutions)

This is a franchise opportunity, and as regards franchise fees and other costs, you will need:

  • At least $125,000 in liquid capital
  • A minimum net worth of $1 million
  • A full investment of between $180,000-$445,000

This is a more affordable option compared to a licensing agreement.

iKrave Vending

How much does it cost to franchise a Starbucks: Licensed Stores

This is where you get to run a Starbucks coffee house. While you may not be a franchise owner, it at least allows you to run it as a business.

This option is overseen by Starbucks. The company will set you up as a licensed seller of the food and beverages, and do a number of things that will get you started. According to the company website, you will receive:

  • Unrivaled, customizable store design (you will still have to follow the core Starbucks aesthetic to a degree, chosen from their 18 designs)
  • Starbucks menu, equipment, training and support
  • Seasonal promotions
  • Proprietary equipment and fixture package
  • Exclusive Starbucks® food and bakery programme
  • Whole bean packaged coffee and comprehensive merchandise assortment
  • Ongoing expertise, consulting and support including onsite visits

So why do Starbucks only offer licenses?

That’s the way things are in the US and Canada. The general feeling is that Starbucks seems to want to have complete control over the product and the brand image in these two countries. And fair enough, it did all start in Seattle.

A licensed coffee shop is controlled by Starbucks. Entrepreneurs who take on this particular challenge and have their own Starbucks coffee shop will need to understand that the coffee retailer has high standards. Each store is very much held to the exact same high standards and product quality that you would expect from the corporate office.

The company has also been able to grow its store count by offering a diverse selection of products to a diverse group of coffee buyers. Starbucks distinguishes itself from its competitors by not franchising. 

How many Starbucks licensed stores are there in the United States?

According to Statista.com, there were 6,497 Starbucks licensed stores in the US in 2021. That is compared to 8,947 company-owned stores. 

How much does the average Starbucks make per day?

This is obviously down to differences regionally and so on. Bear in mind that Starbucks is very quick to close down under-performing stores, so the average revenue must be consistent across all stores.

On average, Starbucks stores make around $500 per day profit.

When thinking about Starbucks, think location

The coffee shop chain has strict control over many aspects of the Starbucks license agreement. One of the key aspects is an attractive location, or what is often referred as ‘position’. You need to have a prime position before Starbucks will even consider offering you a license.

The main concern is foot traffic. If you don’t have a location that is busy with coffee-loving patrons, then you have a very slim chance of acquiring that license. This is why so many licensed stores are in airports and hotels. 

Want to run your own ice vending machine business?

Find out how by clicking here.

How much does it cost to franchise a Starbucks: The next step

If you think you are the type of person who can make a Starbucks successful, then begin the license application process. Go to the Starbucks Branded Solutions website and fill out the application form. The form is quite detailed, and will ask for:

  • What kind of business you manage
  • Business information such as your name and address 
  • Contact information
  • Products that you will offer

Then, the more detailed part of the process kicks in. Expect to be asked specific questions about you and why you would make a valuable licensed store owner. The company will also look at your vision for competitiveness in the food and beverage industry. It’s quite heavy stuff, but if you want your own Starbucks store badly enough, you should be ready for this.

And the money?

Starbucks usually expects that you have around $700,000 in liquid assets (cash you have to spend) for the funding part of the operation. Add to that the $315,000 for the actual licensing fee (permission to use the name and other branding elements).

What about the store design?

You will know the brand ‘look’ for Starbucks. It’s very much iconic now. As a license owner, you get all of that as part of the deal.

When it comes to store design, there is a little bit of a perk here. While the Design Studio for Starbucks has 18 designs that you will have to use as a starting point, after that you can customize to some degree. Many license holders tailor their stores so they fit in more naturally to the particular location. This gives you an opportunity to create a truly local Starbucks 

What does the license actually include?

There is a comprehensive licensing package supplied by Starbucks, which includes:

  • Store design that can be customized 
  • Food and bakery items that are exclusive to Starbucks 
  • Expertise, consulting, and onsite visits to provide ongoing support 
  • Fixtures and equipment proprietary to the company so you know they are the best available 
  • Promotions during the year 
  • Menus, equipment, training, and support for Starbucks 
  • A comprehensive product line of packaged Whole bean coffee and merchandise based on the Starbucks trademark

The verdict

In 2022 there is a real sense that the time is right to start your own business. The pandemic is approaching a different phase, where vaccines are widely available and part of everyday life for many. 

If you live outside the USA and Canada, go for the franchise option. That makes sense (presuming you can work long hours and truly love the brand). If you don’t live in the rest of the world, your only option is licensing the business model in North America and Canada.

And that’s not a bad thing. You get an amazing package of materials and support, and a ready customer base. The only thing that might stop you from taking the opportunity is the cost of the total investment. While investing over $1,000,000 in a licensed operation or franchise is par for the course for big-brand restaurants and fast food places, it is still a cool million plus for a license fee.

To sum up, it’s an amazing opportunity, if you can afford it.