Why Vending is the Perfect Starter Business for High Income Earners

SPEAKER_1 (0:00)

College football is back, so Hilton called on me, the superstition concierge, to make your fan rituals a reality. Need a room to match your lucky number? We got you. Wanna make sure our team doesn't wash your lucky jersey? Ooh, that smells lucky.

Hilton's unmatched hospitality can keep up with any superstition. Even a marching band wake up call at 555 in 55 seconds. Hit it! When you need a team that will do whatever it takes on game day, it matters where you stay. Hilton, for the stay.

Michael Zuber (0:31)

Why is vending the perfect starter business for W-2 employees? As you guys know, Bo is the concierge to small business. Lenny, he talks his buying businesses, franchises. But I want to have a conversation about that starter business. I want to talk to the tech professional, the doctor, the lawyer, whoever it is about vending because I'm hearing from more and more people. It is the amuse-bouche of businesses and plenty of full-time employees are taking it as a starter business. Bo, I understand even vending is going through an AI renaissance now.

So what's going on in vending? Is it still the great starter businesses or has something changed?

Bo (1:13)

I mean, it's a great business model, right? It does require work, but it is less intensive, meaning once those machines are deployed, everything is going to be tracked on your phone. You know what sales are happening, you know what products are getting, where you need to restock inventory. And it really comes down to, I mean, the numbers are simple, right? Like, you got top line sales, what's an average ticket? You know, every time somebody puts money in, are they buying one product or are they buying two product? And what is that average ticket, and how many sales per day is the potential of that location? So with these new smart coolers, what the difference is, is they don't have traditional coils in them, right? So you can configure them for gyms, for hotels, you can put deodorant in, you can do a lot more things.

And I read a study, I believe it was from Cantaloupe, and they compared a traditional vending machine, average ticket versus a AI cooler. And it was about double the sales ticket price. So let's just say the average was 250, and I don't know the exact numbers off the top of my head, but the average for AI cooler was like $4 plus.

So when you're figuring that out, it's attractive, plus you're not going to have the same mechanical issues.

Michael Zuber (2:34)

Yeah, so if people are picking up on this, the old vending that we're used to, at least I was used to in high school, they had these coils or rings that they would insert candy bars or other purpose, other specific things that fit that design, so it would spin, it would then fall out, gravity would take over, and you would get your M&Ms or KitKat bar or whatever you chose. You're telling me they're now not vending machines, they're AI coolers, and by being a cooler, it means you can purpose configuration it for the facility. Back with the coils, you only could do certain things. And now you could do, like you're saying, deodorant. I've seen some of these AI coolers with like iPod chargers, like maybe you left your charger at home, maybe you left earphones at home. It could be purpose built for the environment.

Is that true?

Bo (3:22)

100%. So you think about a gym, we're gonna put protein shakes and things like that.

Michael Zuber (3:27)

Yeah, coconut water and all of those things.

Bo (3:30)

Protein bars. Then you think about a hotel, then you think about a school, then an employment center. They're all gonna be a little bit different.

Michael Zuber (3:37)

I like it.

Bo (3:38)

So then you can kind of get an idea of what your average sales would be per machine. What you're gonna do is you're gonna validate with other owners that own the businesses throughout the nation and say, okay, well, let's just pretend it's $4, an average sale, because they're gonna go. What happens is they walk up with their phone, and the Apple Pay comes up, the door opens, and now they don't have to do one item. They're gonna pick up the Doritos, they're gonna pick up the Diet Coke, they're gonna put the Diet Coke back, they're gonna get a Coke Zero. The door shuts, and they're built. Right. So it's a little bit more seamless, and I think, we work with a couple of vendors in the vending space.

One of the business models still works traditional coil machines, because there's still a need.