Cotton candy vending machines are gaining popularity among entrepreneurs seeking a unique side hustle. These machines offer a fresh twist on traditional vending and serve as a gateway to passive income. So…. how can you start your own cotton candy vending business?
Finding the Right Location
The first step in building a successful business is identifying who will want your product. For cotton candy vending machines, we’ve found that the best-performing locations are malls, theaters, parks, and other family-centric environments. We recommend visiting local venues and discussing potential partnerships with management before making any purchases. Ideally, secure a signed contract before proceeding. Many beginners skip this crucial step and rush to buy a machine, only to be left holding the bag without a place to install it.
Work Out the Financials
Once you’ve locked in a location, it’s time to project your annual net income and assess whether the real risk is worth the hypothetical reward. Most of your costs are variable cost and vary depending on your agreement with the resort and how many units you sell a day. Typically, the only universal fixed expense is insurance, which averages around $100 per month depending on your policy requirements. If you partner with a mall, they will charge a fixed rent payment somewhere between $500 – $1000 a month as well as a percentage of sales above a certain threshold – usually 10% for every dollar over $2,000.
Variable expenses include the cost of goods sold (COGS), payroll, and revenue share with the location. Here’s a basic formula to help you calculate:
-COGS = .30*(units sold)
-Revenue Share expense = Gross Sales * Percentage given to location
-Payroll = $50 – $100 a week
Projecting costs is relatively straightforward compared to estimating sales. This is where human bias and guesswork come into play. Resist the urge to be overly optimistic. The best approach is to model three different sales scenarios: a pessimistic/low estimate, a moderate one, and a high estimate. We’ll provide an example below, but if you’re interested in receiving a detailed template, fill out our contact form and request a copy!
Buy the Machine and Order Extra Parts
This is a guide that is supposed to be followed, for the most part, linearly. I don’t suggest jumping out of order and making this your first step, or you dramatically increase the risk you take on. Fundamentally, risk is the unknown, the more you know the less risk you take on.
So, how do you buy a machine?
As we’ve discussed in previous blog posts, not all cotton candy vending machines are created equal. Some lack essential debugging features, while others may require frequent replacements of key components like water pumps and heating elements. Whether you choose to buy directly from the manufacturer or through a middleman, do your research. We generally recommend buying through a middleman, but be sure to check reviews and ask for referrals. For more detailed guidance on selecting a machine, refer to our earlier post.
When ordering extra parts, read our guide on what parts break the most often. To give you the TLDR, buy motors, sugar pumps, one extra furnace, an extra water pump, and a lot of extra burner cover plates (seriously, they don’t have a long use life!)
Conclusion
In summary, don’t rush. Follow the steps outlined here, and your chances of success will significantly improve. Most importantly, do your own research rather than relying solely on guides. Building your own knowledge base will give you a stronger edge than the average entrepreneur.
