Investment & Return in Vending Machine Business

Greetings, everyone! Welcome to another informative blog where we will discuss the vending machine business, specifically focusing on investment and return in vending machine business. Today, we will explain how you can earn a significant income from this business. So without further delay, let’s get started!

First, let’s understand what the vending machine business is. Imagine you have installed a machine that dispenses snacks, drinks, or even coffee, all without the need for a shopkeeper. Customers simply come, select their desired product, make a payment using the scanner on the screen, and take their product. It’s simple and efficient!

INITIAL INVESTMENT

Now let’s talk about investment. To understand this process better, we have divided the investment into three major parts: CAPITAL INVESTMENT, FIXED COST, & VARIABLE COST. So, let’s discuss each in detail.

CAPITAL INVESTMENT

This is the initial investment you need to start your business. The biggest expense in this category is the machine itself. At Fraxotic Innovation, you can find machines ranging from 1 lakh to 4 lakhs, depending on the size and features.

In addition to this, there is also the cost of a warehouse. You will use the warehouse to store stock for your machines. The cost of the warehouse will vary depending on the size of your business. Remember, friends, the warehouse should not be too far from your machines to ensure efficient restocking.

Additionally, licensing fees are also part of capital investment. For any food business, it is necessary to obtain an FSSAI license and a trade license. You can easily apply for both of these licenses online from the comfort of your home by visiting the official websites. The cost for these licenses is approximately 1k-2k rupees.

FIXED COST

These are the expenses you need to pay every month. The first thing that comes under this is the rent for the location. This varies depending on the location, but generally, it can range from ₹1,000 to ₹5,000.

The second expense is electricity. You will need electricity to operate the machine. This cost depends on your location and the size of the machine, but generally, it can range from ₹1,000 to ₹1,200. Additionally, vending machines require an internet connection, so there is a separate cost for WiFi, which can be around ₹300 to ₹400. There is also the optional cost of cloud storage, which will be approximately ₹1,000.

Friends, don’t worry about all these expenses. They might sound like a lot, but in reality, these investments are necessary for any business. The only difference is that people often don’t discuss these details. However, “Fraxotic Vending Machines” has always aimed to provide you with accurate and detailed information to make it easier for you to start and run your business.

Lastly, we have VARIABLE COST

 These are the expenses that increase with your sales. The biggest expense in this category is the cost of the products. For example, if your machine sells ₹50,000 worth of products every month, you will need to maintain a stock worth approximately ₹1 lakh at all times.

Now let’s talk about PROFIT:

In India, the profit margin for the vending machine business typically ranges from 12% to 36%. Let me explain this in more detail: Suppose your machine generates sales of ₹1 lakh per month, and if we assume a profit margin of 25%, you will make a gross profit of ₹25,000. From this, you will need to subtract the monthly rental, Wi-Fi, cloud charges, and electricity costs. Even after deducting these expenses, you can comfortably earn around ₹20,000 to ₹22,000 per month.

While the profit margin can vary, the good news is that you can increase your earnings with smart strategies! By using smart features along with the right products and location, you can push your profit margins closer to the higher end of 36%!

Explore Our Insightful Video on Vending Machine Investments. Watch Out!

So friends, this was our brief workshop on the vending machine business. We hope you found this blog helpful and informative. If you found this information helpful, feel free to leave your thoughts or questions in the comments section below. Stay tuned to our blog for more updates!