Interested in starting a vape shop but can’t seem to find an opening because your city is already packed with them? Starting a vape vending machine business can be the perfect alternative. Operating vending machines involves some unique challenges that traditional vape shop owners don’t face. On the other hand, though, a successful vape vending machine business can potentially be much more profitable than a vape shop. In this overview, we’ll explain some of the important things that you’ll need to know.

What Is a Vape Vending Machine?

Internally, a vape vending machine is much the same as any other vending machine. You place the products between metal coils. When a product is purchased, the corresponding coil spins until the product drops to a collection area at the bottom of the machine.

Vape vending machines typically have additional features, though, that make them very different from the mechanical snack dispensers that you might see in hotels and apartment buildings. These modern machines typically include advanced features like touch-screen interaction, card payments, ID scanning and cloud-based inventory monitoring.

How Much Do Vape Vending Machines Cost?

The cost of a vape vending machine varies depending on its capacity and what features it offers. A small machine that mounts to a wall might start at around $2,500 and will hold up to about 50 vapes. A floor-standing machine will cost over $5,000 and can typically hold at least 200 vapes. A floor-standing machine can potentially require less maintenance since it won’t have to be restocked as often, but some venues may only have space for smaller machines.

In most cases, your machine will be required to verify the buyer’s ID automatically in order to comply with state and local laws. The manufacturer will offer an ID scanner as an optional add-on costing around $400.

Where Can You Buy the Inventory for a Vape Vending Machine?

To get the inventory for your machine, you’ll need to work with a good vape wholesaler like Shefa Distribution. Vape vending machines are typically filled with disposable vapes. Nicotine pouches are also popular. The same machine can stock both types of products, but you may need to buy an adapter to allow the machine’s coils to accommodate the smaller nicotine pouch cans.

Before you can buy from any vape wholesaler, you’ll need to have the appropriate business licenses. At minimum, your state will require you to obtain a reseller license and tax ID. You may also be required to obtain a tobacco seller’s license.

How Much Can a Vape Vending Machine Earn?

The thing that makes vape vending machines so attractive is the fact that they can potentially earn a great deal of money. If your machine sells a vape for $30, your net margin will be around $15 after accounting for the wholesale price, the card processing fee and your revenue sharing arrangement with the venue. It’s reasonable to expect a high-performing machine in a solid venue to earn several thousand dollars per month.

These are some of the common expenses associated with operating a vape vending machine business.

• Machines: As explained above, a modern vape vending machine costs thousands of dollars to purchase.
• Inventory: It’ll also cost thousands of dollars to fill a machine with vapes and/or nicotine pouches.
• Revenue Sharing: You’ll need to negotiate a revenue sharing agreement with the owner of the business where the machine is placed. They provide the venue, the customer base and the electricity. In return, you’ll typically need to give the business about 15 percent of your gross revenue.
• Card Processing Fees: As with any other business, the card processor will take a percentage of each transaction.
• Age Checking Fees: An ID scanner is an optional add-on for a vape vending machine that costs hundreds of dollars. You may also need to pay a small fee for each ID scan.
• Restocking and Maintenance: Vending machines have mechanical parts, so they sometimes break down. Fixing broken machines will add to your operating costs. You’ll also need to visit your machines periodically – sometimes daily – to restock them. That takes gas and time.

The good news is that vape vending machines are often very successful despite the costs. Once people are already in a bar or nightclub, they won’t want to leave to buy a vape. That means you can get away with charging substantially more than a vape shop would.

What Are the Gotchas?

As you certainly already understand, there’s no such thing as free money when you’re operating a business. There are always challenges that threaten to strip away your time, your money or both. Here are some of the gotchas that you might encounter as a vape vending machine operator.

• Regulatory Concerns: States and cities have strict laws about the operation of vending machines that sell vapes or cigarettes. You need to abide by all applicable laws, and there are some locations where operating vape vending machines isn’t a viable business at all. Virginia, for example, has a statewide ban on vending machines containing materials for vaping or smoking.
• Difficulty Finding Locations: In order to operate vape vending machines, you’ll need to find places to put them. Those locations will typically be bars and nightclubs because federal law only allows vending machines with nicotine products to operate in locations where minors under 21 are never present. Some venues may have machines already, and others might not be interested despite the income potential.
• Loss of Locations: If a location is extremely successful, there’s always a possibility that the owner of the business will ask you to remove your machine so they can install their own. You may also be asked to remove a machine that breaks down constantly, so maintenance is very important.
• Not a Side Hustle: Operating vape vending machines is rarely just a side hustle. As soon as you have more than one or two machines, you’ll find that restocking and maintaining them will consume much of your time. You should not expect an arrangement that allows you to collect free extra income while working a full-time job somewhere else.