- Carla Mozee/Business Insider
How a 31-year-old entrepreneur made $300,000 from vending-machine sales and passive income last year
In 2018, Marcus Gram moved to Philadelphia with real-estate aspirations. But when he realized vending machines could generate cash flow and required less startup capital, he changed his mind. He launched a vending-machine business with the goal of turning his $10,000 in savings into a million-dollar company.
"We walk into businesses every day that have machines and never think about who owned them," Gram, 31, told Insider.
Today his company, Joyner Vending, operates 18 vending machines in four states. It generated more than $307,000 in revenue last year, which Insider verified with documentation. In addition to the drink and snack sales, Gram resells some of his machines to other entrepreneurs interested in the vending business; that made up more than 62% of his revenue.
Gram has turned some components of his business into passive income, requiring him to do fewer daily tasks. He also sells e-books and digital courses that teach founders how to start their own vending-machine businesses.
Anyone can get into the vending-machine business for $1,500, which covers the cost of a basic drink machine and the first stock of products, Gram said. But he recommends starting with at least $3,500 to afford a combo drink-and-snack machine and upgrade it with a card reader — he said that having card readers on his machines increased sales by 25%.
Gram gets most of his machines refurbished and buys them new only if he knows the location is big enough to make up for the expense. One of his most profitable locations is a casino, where his machine made $6,400 in its first month and $7,200 in its second month. Warehouses are also profitable locations, as more are being built across the country.
Before he had his first clients — which in his case are businesses or building owners with employees or residents — he presented himself as a "well-oiled machine," with a polished website, a logo, business cards, and branded polos and hats. He added that this level of professionalism is what helps him compete with bigger companies.
It took a couple of flops to find profitable locations
A few months after establishing his business, Gram booked his first client. Gram spent $5,000 to install two machines in a law office, but they generated only $60 a month for the first five months.
"It wasn't making any money because I didn't do a proper assessment," he said. "I was so excited, I skipped over stuff."
Most of the law office's 30 employees didn't spend much time at their desks and often went outside for food and drinks. Now Gram won't place a machine anywhere with fewer than 50 people coming and going, unless it's a warehouse with an overnight shift — he said manual labor usually means workers require more calories throughout the day.
Accessibility and visibility are important factors when considering a location, Gram said. A machine in the back of a closed-off room isn't going to get as many sales as one in a high-traffic common area, regardless of how many people occupy the space.
After a year in business, Gram hit the jackpot of vending locations: a dorm that housed 500 students. He spent $2,800 to place the machines, and they generate more than $3,000 a month.
Through the pandemic, Gram continued to add locations in gyms, athletic facilities, trucking companies, and warehouses.
"When everyone was taking a step back because everything was closing," he said, "I thought, well, why not look at things that are still open?"