Entrepreneur Turned A Vending Machine Side Hustle Into A $300K Business: Now He Works 4 Hours A Week

It took just a few short years for one young entrepreneur to transition from working for $17 per hour to owning a thriving startup generating more than $300,000 in annual sales. Here's how he did it.

What To Know: Entrepreneur and CNBC contributor Marcus Gram went from living at home with his mom to running a profitable business in just a couple of years by launching a vending machine startup.

"My goal was to save up enough money to purchase a rental property that could generate passive income. But one day, a new side hustle idea sparked when my friend saw a woman taking cash out of a vending machine," Gram wrote in a CNBC report.

That's right — it started as a side hustle. In 2018, he launched "Joyner Vending" with just two machines. He made around $5,000 that year, but it didn't take a lot of effort, so he kept at it. 

By the end of last year, Gram had acquired a total of 21 vending machines and was on pace for $500,000 in total sales. 

The Details: Gram saved up $10,000 working for hourly wages at a managerial job and living at home. His startup costs were only about $4,000, which he used to purchase a snack machine and a beverage machine and fill them with product. He also bought a couple of credit card readers.

"While credit card readers are optional, I’ve found that they can boost sales by up to 25%, since you aren’t only relying on customers to have cash on them," Gram said.

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He found success by spending time thinking about optimal locations to place the machines. He noted that the best places have a lot of foot traffic like apartment complexes, hotels and student housing areas.

"The more days and times they’re open, the higher the opportunity to make sales. More people working in or around the building means more potential customers," Gram said.

He also searched for locations where he didn't have to share profits. Most places just want machines and don't want to have to pay for installation or maintenance, he said. 

One of the keys to his success was studying what products people were after and buying them in large quantities. Most of them are Coca-Cola Co KO and PepsiCo Inc PEP products.

"Some of my best-selling items are Coca-Cola, Red Bull, peanut M&M’s, Doritos Nacho Cheese and Lipton iced tea. I usually get them in bulk from wholesalers," he said. 

Thirty percent of his revenues went toward restocking his machines. Another 10% was allotted for paying his five part-time employees and he left a 10% cushion for other costs, leaving him with 50% profits. The best part is he was only having to work about four hours per week. 

"Most of the time, I’m shopping online for food and beverage products. And once a week, I restock a machine in Maryland myself," Gram said.

However, the biggest thing that helped him stand out from the competition was his customer service. Despite only needing to put in a few hours per week, he always made sure to respond quickly to customer inquiries.

"I do my best to accommodate customers — both the venues that house my machines and the people buying items from them," Gram said.

Now Gram considers himself a "vending machine expert." The entrepreneur offers free tutorials and daily tips on how others can follow in his footsteps.

Photo: frankieleon from Flickr.

Some elements of this story were previously reported by Benzinga and it has been updated.