Beleive it or not – selling ice and water can be profitable!
When people think of new business ideas, selling ice and water often isn’t considered. It’s surprising because ice vending machines are one of the highest-margin businesses you can start today.
What do you need to make ice? Just water and a freezer. Water is cheap across the United States. For every bag of ice sold, you can make more than a 95% profit.
This article explains how to start a successful ice vending machine business.
Is The Ice Vending Machine Business For You?
Running a successful ice vending business needs a lot of dedication. Some people think vending machines bring in passive income, but ice vending machines aren’t completely hands-off. You’ll need time for maintenance, restocking, and finding good locations.
The more vending machines you have, the more time you’ll need to manage them. Modern vending machines let you scale up quickly without overworking. They have features like remote management, so you can monitor them from anywhere with internet access. Despite this, ice vending machines won’t provide “passive income.”
Investment Cost
You also need to consider the initial investment cost. Ice vending machines usually require a five-figure amount, unlike snack and drink machines. Good machines start around $20,000 and can go over $50,000 depending on their size and features. Many providers offer financing options.
You might pay half the cost upfront and finance the rest. While you can find cheap vending machines or even get one for free, finding a good ice vending machine for cheap is harder.
Start by Writing a Good Business Plan
You need a solid business plan to start a successful vending machine business. This plan doesn’t need to follow a specific format.
The purpose of the plan is to help you think through important aspects of running an ice vending machine business, so you’re not caught off guard later. It also gives you a clear overview of your business model.
Dealing with Your Competition
Your competition as an ice vending machine operator is not just other ice vending machine operators. Some local grocery stores and convenience stores also sell ice and purified water.
A great way to stand out from competitors is to offer card readers on your vending machine! Accepting credit card payments significantly boosts your potential customer base.
With fewer people carrying cash, especially coins, offering a card payment option ensures that anyone can make a purchase, anytime.
Marketing and Advertising
Marketing and advertising an ice vending machine effectively involves a mix of strategies to attract and retain customers. Here’s a simplified approach:
Target Audience and Location
Identify your target audience: convenience seekers, travelers, outdoor event attendees, small businesses, and residents in hot climates. Place your ice vending machine in high-traffic areas like gas stations, grocery stores, parks, beaches, and sports complexes. Ensure it’s well-lit and easily accessible with clear signage.
Branding and Digital Presence
Design the machine with bright colors and clear images of ice and drinks. Develop a memorable brand name and logo. Create a user-friendly website with location info, prices, and features. Use social media to share engaging content, testimonials, and promotions. Optimize for local search terms to attract nearby customers.
Local Advertising and Promotions
Distribute flyers and posters in nearby businesses and community centers. Place billboards in high-traffic areas with directions to the machine. Advertise in local newspapers and magazines. Offer introductory discounts and loyalty programs with rewards for frequent use. Run seasonal promotions, especially during summer.
Register an LLC and Secure the Necessary Permits
Running your ice vending machine business as an LLC protects your personal assets. If your business faces a lawsuit from customers, creditors, or anyone else, your personal assets stay safe.
Forming an LLC is simple. Register the company in your state or choose from five other states. Usually, it’s best to form the LLC in your state unless another state offers better tax benefits. Always seek tax advice from experts before starting your vending machine business.
Important!! Get Your Permits
Before installing your vending machine, you need a permit from your state. Each ice machine requires a permit before installation. To get this permit and keep it, you must follow your state’s rules on machine construction, maintenance, performance, and installation.
Your state will also have labeling requirements. For ice and water vending machines, you must clearly display the water source, treatment or purification method, and any additives or preservatives used.
New ice vending machines can cost tens of thousands of dollars. For many people, an initial capital outlay of such magnitude is not feasible. If you want to get into the ice vending machine business but can’t afford a new machine, consider getting a used one.
What to Inspect When Buying An Affordable Ice Vending Machine?
Thinking about getting a used ice vending machine? Here are some things you should think about before hitting that “buy” button:
Machine Age: Check how old the machine is. Older machines might need more fixing up. Ice vending machines usually last around ten years before needing big repairs. A newer machine could save you headaches later on.
Brand Reputation: Some brands are more reliable than others. Look for ones known for quality and durability. Choosing a trusted brand can give you peace of mind that your machine will keep working well.
State Rules: Every state has its own rules for vending machines. If you’re buying from another state, make sure it meets your state’s rules. Not following the rules could mean trouble down the road, so it’s worth checking.
Maintenance Costs: Older machines often need more fixing. Even if the upfront cost is low, ongoing maintenance could eat into your profits. Consider how much you might need to spend on repairs over time.
Haggling Skills: Don’t be afraid to negotiate. Many sellers are open to lowering the price or covering delivery costs. It never hurts to ask for a better deal.
By thinking about these things and doing your homework, you can make a smart choice when buying a used ice vending machine and set yourself up for success in the vending biz!
Financing Instead of Paying in Full
Considering starting an ice vending machine business for the long haul and have solid credit? Here’s a tip: think about investing in a brand-new machine. Why? Well, with good credit, you can negotiate favorable financing terms, ensuring that the equipment cost won’t eat into your initial capital too much.
Moreover, most ice vending machine providers have arrangements with financial institutions to offer financing options. This typically involves making a down payment. If you’re interested in a custom-built machine, you’ll begin by entering into an “intent to purchase” agreement with the manufacturer, which often requires a down payment ranging from 20% to 50%.
Once the down payment is squared away, you can finance the remaining balance through the financial partner of the vending machine provider. By opting for a new ice vending machine and taking advantage of financing options, you’re setting yourself up for success in your vending business endeavors.
Find the Best Ice Vending Machine Locations
Your ice vending machine business’s success hinges greatly on your choice of locations. For example, if you’re situated in a popular beach vacation spot, strategically placing your top-notch machines near large apartment vacation rentals or bustling holiday resorts where beachgoers frequent can ensure brisk ice sales.
A prime location could yield profits of over $1,300 per month per vending machine. Since this venture operates without the need for employees and relies heavily on automation, expanding rapidly by establishing new locations becomes quite feasible.
What Makes a Great Ice Vending Machine Location?
A great location will have traffic and the supplies you need to successfully operate an ice and water vending machine. You need a reliable supply of fresh water and a safe electric outlet. Water quality varies by state – get a machine with a filter that can purify the kind of water you have in your state.
Street-level visibility is essential to attract new customers on a target market. In a small to mid-sized town, you need to be near a road where 9000+ cars pass daily. It is important that people on the road can see the ice vending machine.
Parking space should also be available so that people can pull up and load bags of ice onto their cars. Great locations include gas stations and near convenience stores.
Find Good Locations
You can scout for potential locations yourself or hire a vending locator to do it for you. There are two types of vending locators – full-service locators who will find locations, talk to location owners, and negotiate contracts on your behalf, and those who will just give you a list of potential locations in your area so you can visit and do the negotiations yourself.
The second option is more affordable and may suit you better as a beginner with limited capital. We run such a service and can search for high-traffic locations for you. We’ll deliver a detailed list of potential ice vending locations with contact information so that all you have to do is reach out to ask if they are open to having ice vending machines on their premises.
Wrapping Up
Running ice vending machines can be a lucrative side hustle viable in numerous towns and cities throughout the United States. It offers the flexibility to manage your own business while holding down a job or pursuing other entrepreneurial endeavors.
Given the minimal need for human oversight, you have the freedom to expand the business by establishing new locations. If you’re seeking assistance in identifying potential installation sites for an ice vending machine in your vicinity, access a comprehensive list of options here.
