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This 31-year-old started his vending machine business with $10,000 in savings. Here’s how he maxed out his profits to make $300,000 last year.

profile photo of Marcus Gram with city backgroundMarcus Gram is the founder of Joyner Vending.

Marcus Gram

  • Marcus Gram started his vending-machine business in 2018 with $10,000 in savings.
  • Joyner Vending operates machines in four states and booked more than $307,000 in revenue last year.
  • Here’s how Gram built a business based on passive income and how he found profitable locations.

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.

His company, Joyner Vending, operated 18 vending machines in four states as of 2021. It also generated more than $307,000 in revenue that 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.

Here are the steps Gram took to build his business and his tips for finding sales-generating locations.

Gram says you can start a vending-machine business for $1,500

two vending machines Marcus Gram and his sister stand on either sideGram hired his sister to maintain most of his vending machines.

Marcus Gram

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.

Marcus Gram stands next to a vending machineGram operates vending machines in Pennsylvania. New Jersey, Delaware, and Maryland.

Marcus Gram

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?”

Read the original article on Business Insider