$51.9 billion was the value of the global vending machine market in 2021, with the beauty & personal care vending machine segment projected to grow the fastest out of segments from 2022 to 2030, with a CAGR of 10.7% growth. Find all you need to know on how to start a beauty vending machine business below.
What is a beauty vending machine business?
Beauty vending machines sell a variety of products including hair oils, moisturizers, do-rags, foundation, bonnets, shaving creams, deodorants, makeup removers, fake lashes, hair ties, lip gloss, hair extensions, brushes and other items to consumers who need to stock up on essential beauty products.
Vending machines are often placed in areas of high foot traffic including airports, malls, hotel lobbies, barber shops, spas, salons or college campuses and the business is typically highly profitable with the average hair and beauty supply vending machine generating an income of $2,000 per month.
They are also an alternative for customers who normally shop online for luxury beauty and skincare products whilst the increasing footfall in spas, airports, and shopping malls is expected to fuel the demand for beauty and personal care retail vending machines in the coming years.
The industry growth can also be attributed to the ability of these machines to deliver goods quickly, making it a very convenient option for consumers.
Regulations for opening a beauty vending machine business?
To open a beauty vending machine business, you’ll need to pay attention to certain business obligations and requirements. There may be required licenses and permits you need to obtain before launching your beauty vending machine business.
For example, you will need a sales tax permit if you plan to sell taxable items through your beauty vending machines. You might also need a business license, which you can get from your local city or county clerk’s office.
To find out what other licenses and permits you might need, contact your state’s licensing board and/or the Small Business Administration (SBA). Getting a license for your vending machine is also a necessary step in ensuring that your business is in compliance with all applicable laws.
In the U.S, a license is needed to operate a vending machine business. The license requirements vary from state to state, but usually involve submitting an application and paying a fee. Some states also require that the applicant complete a background check.
Before you can operate your vending machine, it will need to pass a health inspection. The health inspector will check to make sure that the machine is clean and in good working order. They will also make sure that the food or drink you are selling is safe for consumption.
In order to get a license for your vending machine, you will need to provide the following documents:
- A completed license application
- A photo of the vending machine
- Proof of insurance
- A background check (if required by your state)
Training needed to open a beauty vending machine business?
No formal training or education is required in order to open a beauty vending machine business. Experience in the field or in business is encouraged but not needed either.
Negotiation skills are useful as before you can pocket the profits of your vending machine, you’ll need to pay commission to the proprietor who provides the location and the electricity required to operate your machine.
Generally, you’ll pay the property owner 10% to 25% of the revenue from your vending machine so brushing up on your negotiation skills will certainly be beneficial.
Whether or not you hope to establish an exclusive partnership with a location, draw up a contract with the proprietor stating your agreed compensation rate, contract length, and terms you have with the owner.
Include provisions for breach of contract, too. It’s also smart to include expectations and obligations regarding servicing and restocking your vending machines, vandalism or theft, and the possibility of unprofitability and have a lawyer look over the contract before signing.
6 tips for opening a beauty vending machine business business
1 – Choose a suitable brand name
Give your beauty vending machine business an identity so people will think of it as a well-known and respected brand. You can take the name of your beauty vending machine business from your industry, focus on a geographical location, or use your own name among other options.
The main goal for naming your beauty vending machine business is to make it sound appealing and trustworthy to building owners so they are more likely to work with you.
2 – Choose your business model
There are 3 main types of business models for a beauty vending machine business including:
- Operator: You will be responsible for stocking, servicing, and collecting money from the machines
- Product company: You will contract with an operator to provide the machines and then sell products to the operator to stock in the machines
- Service company: You will contract with an operator to provide machines and stock them as needed
No matter which model you choose, make sure that it aligns with your business goals and the products you offer.
3 – Choose your products
You must take the time to study what items you want to sell, who you will be selling to, why you want to enter this industry, and more. Are you going to focus on just one kind of beauty product such as a fake lash extension business or a selection of products from moisturizers to foundation to lip gloss.
You’ll need to purchase products to stock your beauty vending machines. When stocking your machines, consider the following factors:
- Product expiration date: If applicable, you’ll need to rotate your products so they don’t expire
- Variety: Offering a variety of products will appeal to more customers and increase the chances that they’ll make a purchase
Whatever niche you select, you should read up on it first to learn if the niche will click with all the other elements of your beauty vending machine business.
4 – Choose a good location
As part of your business plan on how to open a beauty vending machine business, you must select a good location. Just like any retail business endeavor, the location of a vending machine will affect its sales success.
Areas with a lot of foot traffic provide the best opportunities. And, of course, locations should be a good match for the type of products your machines sell. Reach out to retailers in these locations and set up a meeting to discuss space rental costs for your vending machines.
Places where beauty vending machines often do well include:
- Malls and shopping centers
- Apartment complexes
- Hotels and motels
- Hospitals and health centers
- Train stations
- Bus stations
Realize that there may be Americans with Disabilities Act (ADA) compliance standards to adhere to when placing vending machines in certain locations.
Also, consider how safe your machines and products will be. Locations prone to theft or vandalism will cost you time and money if you have to repair or replace machines.
5 – Work on your finances
Your project is developing now but you’ll need to firm up on the figures. For this, you’ll need to develop a business plan for your beauty vending machine business project and its financial plan. This is an essential step to ensure the success of your business.
It lists all your expenses and allows you to estimate your revenues. The business plan will allow you to validate the profitability of your project. This is when you can decide if you need to use financing solutions and which particular options would work best: Bank loan, crowdfunding, investors or something different.
The business plan is generally required by the banks or other financial partners from which you apply for financing and therefore should be clear, precise and complete. You may need a business starter loan from your local bank, Credit Union or avail or start your business with loans guaranteed by the Small Business Administration.
Good to know: The budget needed to open a beauty vending machine business depends on the investments needed for the vending machines, products, location rental costs, cash requirement at launch and more. Prospective owners should budget an estimate of between $1,000 to $10,000 depending on the above items.
6 – Equip yourself with the right business tools
To ensure your business runs smoothly, it’s in your best interest to equip yourself with powerful and efficient tools. In particular, you’ll need to:
- Open a business bank account
- Obtain a POS system to allow customers to pay with card
- Use accounting software to record day-to-day financial transactions and/or use an online accountant
From an inventory point of view, you should consider your:
- Beauty vending machines – Buy new or used machines, with the price varying depending on the condition and features of the machine. Consider the product capacity and machine size for your available space
- Some sources of vending machines include Manufacturers, Wholesalers, Specialty retailers and online sellers, Craigslist, Amazon, Alibaba and eBay
- If you want to reduce your costs, consider buying used or refurbished machines, which cost anywhere from $1,200-$3,000. It’s even better if you know how to repair the machines or get someone to do it for you at an affordable price. Then you won’t have to worry about warranties.
- Products – Stock up on hair oils, moisturizers, do-rags, foundation, bonnets, shaving creams, deodorants, makeup removers, fake lashes, hair ties, brushes and other items
- Location design – Includes the overall branding, design and lighting
Which business structure should I use to open a beauty vending machine business?
When setting up a beauty vending machine business, you’ll need to think about what business structure will work best.
Many prospective business owners find themselves lost in the complexity of understanding and indeed choosing between an LLC, a sole proprietorship, a partnership or another alternative.
In the case of beauty vending machine business, we advise you to choose one of these legal forms:
- A Limited Liability Company (LLC) for one or multiple owners
- Sole proprietorship if you own an unincorporated business by yourself
LLC’s are often preferred as, unlike a sole proprietorship, their business structure in the U.S. protects its owners from personal responsibility for its debts or liabilities.
An attorney or accountant can also explain to you how to open a beauty vending machine business or you can choose a professional company formation service. These services offer excellent legal advice and business formations at a fraction of the price of a traditional attorney.
Are beauty vending machines profitable?
Beauty vending machines can be very profitable with the average hair and beauty supply vending machine generating an income of $2,000 per month.
Where do you put a beauty vending machine?
Beauty vending machines can be placed in airports, malls, hotel lobbies, barber shops, spas, salons or college campuses, ideally in a high foot traffic area that grabs the attention of those who may have forgotten to pack their beauty essentials.
What is in a beauty vending machine?
Beauty vending machines can sell a variety of products including hair oils, moisturizers, do-rags, foundation, bonnets, shaving creams, deodorants, makeup removers, fake lashes, hair ties, brushes and other items.
Tom is the founder of Gottagrow.io. He reads the offers, deciphers the details including features, pricing, included services and more to find you the best products and services.