Start Your Own Vending Business – Nineteen-year-old Jamie Ibanez has five vending machines, but he makes most of his money from his YouTube channel.
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Start Your Own Vending Business
Vending machines are a profitable business, but not as profitable as YouTube. Paul J. Richards/AFP via Getty Images
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Here’s a little known fact: Vending machines are independent entities. PepsiCo doesn’t hire, Coca-Cola doesn’t send drivers every evening to return soda cans, and Wrigley never gets the four quarters you land on a candy store stool for a month’s worth of Skittles. Instead, the vending industry is the source of people like Jaime Ibanez, a 19-year-old who has 25 machines in eight locations around the Dallas-Fort Worth area, all under the banner of his company: Vending Bites.
The vending machine business is ridiculously tight, Ibanez told me. He wakes up early and checks an app on his phone called MoMa, which provides his eyes with special items purchased from readers on his device. Then we go to Sam’s Club, where he buys potato chips, pretzels, and wrapped candy, in multiple packages. Ibanez would haul merchandise in the back of his truck along the highways of North Texas until his vending machines were restored and the money returned. All this work was done by Ibanez and his girlfriend, Lisbeth Galvan. (They don’t get paid, but the vending machines pay the rent and joint bills).
Ibanez is a licensed vending machine owner, but many of his day-to-day responsibilities resemble those of a gig economy worker: the high costs of logistics and mileage, the unexpected bottom line, sales. Limited number of company products. . Supervision and responsibility of the companies themselves. It seems to be very much in line with how many young people are making their money in 2020.
Ibanez actually gets most of his income from his YouTube channel, where he keeps his 273,000 subscribers up to date with the baron’s daily activities. All in all, Ibanez told me the channel makes an extra $10,000 a month, which is triple the money he gets from the quarters and dollar bills he burns through the machines. Ironically, Ibanez found it more profitable to talk about his work on camera than to run the company itself. We talked about that, as well as why he wanted to change from getting a real estate license to buy vending machines and the biggest mistake young investors make in an illegal industry.
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I graduated high school in 2018 and planned to go to residential school. But a week after I graduated, I saw a YouTube video of someone doing the same thing I’m doing now. It seemed interesting to me: the man was moving all this money around in these machines, and he said he basically works once a day. Two days later, I went out and bought my first vending machine.
I think many people think that vending machines are owned by certain companies, not individuals. What is that kind of grinding? Do you DIY too much? Should you contract with a company like Coca-Cola, or buy something and put it in the machine?
Yes, it’s easier than people think. You can buy a used vending machine on Craigslist, and get a business license. You go door to door, talk to business owners, and offer service. You say, “Hey, we’re a sales company, would you like to work with us?” You can make a deal with them. I don’t really have a contract with anyone to work with, but you can.
Usually yes, but I have 25 machines and I only pay commission to one owner. Many of the owners do not even know how it works. Some ask me, “How much do you charge?” Which is crazy, vending machine owners will charge money to set up their machines. But yes, I talked to them and we made an appointment to install the machine, and I fill it every two weeks.
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You mentioned getting a work permit. Does it have to be an LLC or something done right?
Yes, you need a license and tax ID to do this legally. Especially since it’s food and drink. We are a food and beverage company.
On a normal day, when we go to return the machines, I like to get up early because there are many machines in the offices and warehouses. Sam’s Club doesn’t open until 7, so I’ll get up at 6, go online – I can see what’s sold with my credit card scanners, to tell me exactly how the drink and chips are out. I write down what I’m going to buy, and sort the items into boxes. Then I went to the venue. I usually only do two or three points a day, because I make YouTube videos, so I want to have enough things to shoot.
I have around 4pm because my pages last for an hour and I can’t go through them all in one day because of my YouTube videos. But other vending machine people can go to 10 locations in one day and not come back for two weeks.
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The most common ones are warehouses, because workers can’t really leave [that place]. The barber too. I now have a hair clipper and it works really well. But not retail. I’ve tried retail before and the staff there won’t buy anything.
I’d call a good month for 25 machines and eight locations for $6,000-$7,000. But the thing about vending machines is that the net profit is only 50 percent. So about $3,000 a month. The margins are the same, between buying food and gas.
So, when I first started, I went to Sam’s and bought random things. It was trial and error, to see what worked. But basic stuff always works well. M&Ms, Skittles, regular chips. I’ve tried different types of candy, and the basics always work best. We stick to that. Sometimes I still put one thing in the machines [in the past that included packets of instant ramen, frozen pizza, microwave popcorn, even milk], but everything else is the same.
How about when you pull out a bunch of quarters and nickels from the machine and try to transfer them to your bank account? Is this difficult?
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It is very sad. I don’t take coins to the bank because I have to change them. I don’t want to sit there and do that all day. But I have a 5 gallon bucket in my office that I pour into. Now it’s about half. I will probably find a bank that will take more money. I’ll know when it’s full.
You mentioned your YouTube channel, which is very popular right now. Why do you think there is such magic in watching people work at the sound of a vending machine?
I really think it’s the money. The reason my channel grew was because of the thumbnails I had cash, I was 18 years old and I had my own business. But many other people say that the videos are satisfying, watching the vending machine in return. Before videos, no one knew how they worked together.
The biggest mistake people make is not researching the equipment. They are not sure which is better and which is worse. This is very important. In sales, you want to spend a little more money to get a good machine because it will benefit you in the long run. I have talked to many sales people and they would tell you not to buy foreign made machines. If the machine breaks and you have to get parts, you have to get them from Pacific, and that will take weeks.
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New people, yes, because they hear and don’t know what’s going on. But for me, if I get a call and someone tells me that my device doesn’t accept cash, I know that’s easy. Like the coin system – where the coins go – it’s cluttered, and easy to change.
It is likely that you can be contacted at any time to repair the equipment. I’m at home, it’s my day off, and I get a call: “Hey, something’s wrong with the equipment.” I like to be fast in the way I run my business. I want to fix it
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