Saturday, December 15, 2012

Passive income

High school students are busy, it's no surprise to anyone. With students doing more homework nowadays than at any other point in time, participating in sports, and possibly experiencing a very rigorous, college preparatory curriculum, it's no wonder why students can't find time to support a part time job to make money. Be it for gas, college savings, or just spending money to have fun on the weekends, money for high school students is hard to come by.

Although there are some parents out there who are fortunate enough to be able to provide their children with gas money and spending money, many aren't. Students might want ways to make up more money for their own benefit once they are out living on their own, or some high schoolers like having extra cash to spend on their girlfriend/boyfriend, weekends, or other things.

In this and the next few articles, I will be showing high school students, or anyone seeking extra money, how to make money without doing work continuously. These sources of passive income won't make you rich, necessarily, but they sure can help out when you're in a tight spot money wise.

Bulk candy vending

The first form of passive income being discussed is bulk candy vending. This is a personal favorite of mine because I enjoy talking to people and getting out and being active. Bulk vending machines are the small machines you see in convenience stores, auto shops, super markets, and many other retail locations(note these are NOT the larger, more expensive electronic machines). You put in a quarter (or two), and get either gumballs, candy, stickers, or small toys from the machine. Kids love these, so they're also great for those of you who are fans of making people happy with your services. The best part of all about bulk vending machine: they make you money all the time, without you having to maintain or constantly visit the machine. All one must do is go and service the machine every couple of weeks or so, I prefer to do so after school or on a weekend. Servicing the machine simply entails walking into the location, giving the machine a quick clean, refilling the candy, and collecting your coin.

How much can I make?

This all depends on the particular location and the type of candy you decide to use. The national average per head per month of bulk candy income is $25. This means that if you service your machine once a month, and it has three heads, the national average would state that you'd pull in $75, not bad for not having to do much actual work, right? Of course the national average isn't correct when concerning every location, some make much more, and some locations will make less. It all depends on how good of a location you have. In general, 1" gumballs are the most profitable, selling for 25 cents a gumball when you spend only about 5 cents per unit. Candy, such as M&M's or Mike and Ikes, are also pretty profitable.


When buying your first machine I would definitely suggest buying used. You can usually find a decent, used machine on Ebay or Craigslist. I would definitely suggest buying a triple head machine, in general those are the ones which I find bring in the most profit per head. Used, these can run you anywhere from $75-$150, this means that after you've had the machine on site for two or three months, the machine will have paid itself off in profits!


The hardest part about bulk candy vending, by far, is locating. There are many great locating services out there who either physically go out locating for you, or call local businesses placing your machines. Of course, there is a fee associated with these services, and the ones who physically go in locating for you are more expensive. Many people prefer locating services over self locating.

Personally, however, I prefer to self locate. Self locating can be very difficult at times, even veteran vendors only report about a 1 in 10 success rate. Although the basics of self locating are pretty simple, the entire process can be very demoralizing at points. You will get denied, sometimes very rudely, and you will get down on yourself. Locating my first machine took about a month of inconsistently going out and making cold calls to random businesses, I can safely say I went to about 20 locations, getting denied at all of them. However, after I had learned the basics of sales through numerous conversations with my parents, refined my pitch, and kept at it. After I started my current sales technique, I got the third location I tried. After all the other failed locations, getting this one was one of the most rewarding feelings in the world. Keep at it, after your first location is secured, locating additional machines is much easier.

There are two types of locations: commission and charity. Commission locations are pretty self-explanatory, you simply pay the store owner a percentage of either your profits or gross income. Charity vending is a little different. There are numerous national charities with vending outreach programs. A vending outreach program is where you pay the charity a monthly fee in order to represent them and use their name. Locating a charity machine entails simply asking an owner to donate a few spare feet of store space to charity. You also get to display the charity sticker on your machine, making the store look good. The advantage of charity vending is that you may not have to pay as much for a particular location, you are also serving a good cause.


Servicing your route is something you will have to do only once or twice a month, depending on the location. When I service a machine I try to keep it quick and clean, no more than five minutes in the location is optimal. I bring: candy refills, keys, paper towels, rubber gloves (NEVER touch the candy with your bare hands), a small bank zipper bag for coins, citrus cleaner to keep ants away, and a screwdriver.

Good Luck

Overall, bulk candy vending is a great source of passive income that I thoroughly enjoy managing. At times things may get tough if you decide to self-locate, but persistence in really any business is key. Bulk vending really is a business that can make you as much money as you need it to, as long as you're willing to locate the machines and service them periodically! Before you get started, though, make sure to check local and state laws and get all the proper licenses for bulk vending.

Stay tuned to the upcoming posts in the series of passive income! Cheers!

1 comment:

  1. Hey Mitchell,

    Great write-up. Just wondering how do you prevent theft of the candy machine? Does the responsibility lie with the location owners?

    Another question, how do you set the coin size of the machine? If I am importing the machine from US to Malaysia, there will be a difference.

    Yours sincerely,
    An undecided entreprenuer