How to Create Passive Income with a Vending Machine Business – Andrei Cucit of VendingZone
INTERVIEW VIDEO (Length – 1:03:19)
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Andrei Cucit, the founder of Vending Zone, shares how he is creating passive income with a vending machine business. Andrei shares insider secrets about the costs involved, finding locations, and the limitations of outsourcing work.
Andrei Cucit, the founder of Vending Zone, discusses his entrepreneurial journey and strategies for growing his vending machine business. He shares how he became interested in entrepreneurship during the COVID-19 pandemic and decided to pursue vending machines as a business opportunity. Andrei talks about the costs involved, finding locations, and the limitations of outsourcing work. He emphasizes that the vending machine business can be a viable opportunity for generating extra income if one is willing to overcome challenges. Andrei also discusses the scalability of the business, potential growth opportunities, and his interest in investing in laundromats. He offers advice for entrepreneurs to take risks, think outside the box, and pursue their passions. Andrei is open to helping others learn about the vending machine business and may consider creating a course in the future.
- 00:00:00 In this section, Sushant introduces his guest, Andrei Cucit, the founder and business owner of Vending Zone, a vending machine operator in the Greater Toronto Area. The interview aims to learn about Andrei’s entrepreneurial journey and the strategies he has used to grow his business. Andrei shares how he became interested in entrepreneurship during the COVID-19 pandemic and started researching various ways to make money online. He eventually stumbled upon videos about vending machines and decided to pursue that as a business opportunity. Currently, Andrei operates nine vending machines, which he visits every two weeks to restock and collect the change. He considers this a side hustle while working as a mortgage agent and pursuing his passion for music.
- 00:05:00 In this section, Andrei talks about his early research and how he decided to invest in a vending machine business. He mentions that most of the resources he found were from entrepreneurs in the United States, so he had to adapt the information to the Canadian market. He found machines for sale on Kijiji and decided to purchase two machines for $10,000 because they were located in busy areas with lots of foot traffic, including medical clinics. The seller didn’t provide any records of sales, so Andrei had to take his word for it in terms of potential income. Despite facing some cooling problems and having to make repairs early on, Andrei was eager to get started and figured things out on his own.
- 00:10:00 In this section, the speaker discusses the cost of the vending machines and the ongoing expenses associated with them. They mention that the combo machines they prefer cost $3,500 each, with an additional $1,000 per location and $500 for card readers. The speaker explains that most locations do not ask for rent or commission because they appreciate having a free machine for employees or customers. However, it is clarified that the buyer only purchases the machine itself, not the rights to the location, so if the owner wants it moved, it is the buyer’s responsibility. Finding new locations can be challenging, as hospitals and shopping malls are difficult to access, but there are still plenty of local businesses and companies without vending machines. The speaker has found that many people do not respond or express disinterest in having a machine, even though there is no cost for them. As for the machines themselves, the speaker initially bought them second-hand, but it is not clear if they continue to purchase new machines for new locations or opt for used machines if available.
- 00:15:00 In this section, Andrei discusses the possibility of buying vending machines that are already on location versus buying the machine from a supplier and finding your own location. He mentions that it is more cost-effective to find your own location and gives an example of the cost difference. Andrei also talks about approaching businesses in person to offer them vending machines and how he contacts his supplier for help with installation and moving. He then discusses the idea of dispensing novelty items in vending machines and mentions that he occasionally switches out generic products for more interesting ones to see how customers react. When it comes to other items like toothbrushes or household items, Andrei mentions that it would require a different kind of vending machine and suggests that it could work in hotels or places where guests may need those items overnight. However, he also raises the question of why the hotel wouldn’t do it themselves to make money. Overall, he finds the idea interesting but still emphasizes the importance of continuously learning and experimenting with snacks and drinks for now.
- 00:20:00 In this section, the speaker discusses the limitations of outsourcing work for a vending machine business. While hiring someone to fill the vending machines and collect money would save time, it would significantly cut into profit margins. Additionally, there is a risk of theft if someone decides to pocket the money collected. The speaker prefers to stick with family and friends for help, but acknowledges the challenges of managing machines in distant locations. However, with close proximity and efficient planning, it is still manageable to service around 40 machines. The downside is the potential for maintenance and repairs, which can become overwhelming. Overall, the speaker suggests that the vending machine business can be a viable opportunity for generating extra income if one is willing to overcome these challenges.
- 00:25:00 In this section, Andrei talks about the scalability of the vending machine business and potential growth opportunities. He mentions that once the business reaches a certain level, it would make sense to hire employees and possibly have a warehouse for stock. He also discusses the possibility of selling machines, parts, or even entire locations to other entrepreneurs, offering them the opportunity to learn from his experience. Andrei acknowledges that the vending machine business is relatively easier to start compared to other businesses, as there is no marketing involved and no ongoing costs. However, he emphasizes that the notion of making substantial income without putting in any effort is not realistic, unless a significant investment is made. He also mentions the lack of regulatory issues in Canada for vending machine businesses, with the only requirement being to register as a legitimate business entity. Andrei shares that some vending machine business owners eventually upgrade to laundromats, as it simplifies their existing business and consolidates all the machines in one place.
- 00:30:00 In this section, Andrei Cucit discusses his interest in investing in laundromats and the potential profitability of this business. He mentions that laundromats are more affordable than real estate and can range from a hundred thousand to four hundred thousand dollars depending on size and location. While renting a location for a laundromat can be costly, owning the building and operating the business can be advantageous. Andrei also highlights that the profit margins of laundromats are generally good, making it a low-risk investment. However, he advises conducting thorough research before purchasing machines and emphasizes the importance of proximity to the laundromat, as it affects servicing and maintenance. Lastly, Andrei shares his interaction with other entrepreneurs in the vending business and mentions the potential for future partnerships or collaborations in the industry.
- 00:35:00 In this section, Andrei Cucit discusses his book recommendation for entrepreneurs, mentioning “Rich Dad Poor Dad” as a book that changed his perspective on money and business. He also touches on the oversaturation of e-commerce, with many people selling courses instead of actually doing e-commerce. Andrei expresses his excitement for automated technologies like Chat GPT and AI, as they save time and improve productivity. He recommends using Google Calendar for scheduling and emphasizes the importance of sticking to a schedule. While he doesn’t actively research businesses, he believes that anything related to AI technology is impactful and finds the idea of making passive businesses even more passive through automation intriguing.
- 00:40:00 In this section, Andrei Cucit shares some valuable advice for entrepreneurs. He emphasizes the importance of taking risks and not listening to others’ doubts or concerns. Andrei believes that time is the most valuable asset and encourages people to take a leap and do what they love instead of settling for a safe and average life. He reminds entrepreneurs to think outside the box and not let fear hold them back. Andrei also mentions that he is open to helping others learn about the vending machine business and may even consider creating a course in the future. Overall, his message is to take charge, be confident in decision-making, and pursue one’s passions.
People & Resources Mentioned in the Episode
- Google Calendar
What You’ll Learn
Interview with Andrei Cucit of VendingZone
|[00:00:27] Introduction to Andrei Cucit and VendingZone|
|[00:00:53] Welcoming Andrei Cucit|
|[00:01:32] Starting in Entrepreneurship|
|[00:02:29] Andrei’s Other Ventures|
|[00:03:50] Managing the Vending Business|
|[00:04:53] Growth of the Vending Business|
|[00:07:23] Initial Challenges and Learning Curve|
|[00:12:05] Evaluating Location Risk|
|[00:12:38] Location Scouting in the Vending Business|
|[00:13:10] Finding New Locations in the GTA Area|
|[00:13:58] Challenges with Location Response|
|[00:14:25] Considering New Machines vs. Used Machines|
|[00:15:03] Expanding Product Variety|
|[00:15:54] Novelty Item Vending Machines|
|[00:16:30] Exploring New Location Types|
|[00:23:56] Andrei Cucit on Servicing Vending Machines|
|[00:24:00] Managing 40 Machines as a Solo Operator|
|[00:24:38] Challenges of Maintaining Multiple Machines|
|[00:25:00] Scaling the Vending Business with Employees|
|[00:25:37] Selling Machines and Mentoring New Entrepreneurs|
|[00:25:56] The Realistic Perspective on Vending Business|
|[00:28:19] Minimal Regulatory Requirements in Canada|
|[00:30:00] The Potential of Upgrading to Laundromats|
|[00:31:49] Lessons from Entrepreneurship|
|[00:33:33] Building a Network of Fellow Entrepreneurs|
|[00:35:21] Recommended Book for Entrepreneurs: “Rich Dad Poor Dad”|
|[00:36:36] The Importance of Financial Knowledge|
|[00:37:00] Exciting Innovations in E-commerce, Retail, and Tech|
|[00:37:40] Using Google Calendar for Productivity|
|[00:38:00] Saturation in E-commerce and the Role of AI|
|[00:39:00] Valuing Your Time in Business Decisions|
|[00:40:00] Drawing Inspiration from Various Sources|
|[00:41:00] Taking Risks and Not Fearing “What Ifs”|
|[00:42:00] The Power of Thinking Outside the Box|
|[00:43:00] Wrapping Up the Discussion|
|[00:44:08] Contacting Andrei for Business Inquiries|
In this segment, the guest will answer a few questions quickly in one or two sentences.
Andrei Cucit of VendingZone
- Book recommendation that you would make to entrepreneurs or business professionals (Response:)
- An innovative product or idea in the current e-commerce retail or tech landscape that you feel excited about (Response: ChatGPT)
- A business or productivity tool that you would recommend (Response:Google Calendar)
- Another startup or business that is currently doing great things. (Response:)
- A peer entrepreneur or business person whom you look up to or someone who inspires you (Response: Get inspiration from all places and different people)
- One networking tip or building and sustaining valuable professional relationships
- Best business advice you ever received.
(Response: Take calculated risks, value your time, and pursue what you love without being held back by fear or conventional thinking because life is short, and achieving extraordinary goals is often more attainable than it seems.)
Sushant Misra of TrepTalks: Hey there entrepreneurs. My name is Sushant and welcome to Trep Talks This is a show where I interview successful e commerce entrepreneurs business executives and thought leaders And ask them questions about their business story And also dive deep into some of the strategies and tactics that they have used to start to grow their businesses And today I’m really excited to welcome Andrei Kuchet to the show.
Andrei Cucit is the founder and business owner of VendingZone. VendingZone is a vending machine operator that services businesses all over the Greater Toronto area. They offer the latest state of the art vending machines, equipped with card readers and stocked with delicious snacks and beverages. And today I’m going to ask Andrei a few questions about his entrepreneurial journey, and some of the strategies and tactics that he has used to start and grow his business.
So, Andrei, thank you so much for joining me today here at TrepTalks. I really, really appreciate it, your time No worries, Ben.
Andrei Cucit of VendingZone: No worries man Thanks for having me. [00:01:00]
Sushant Misra of TrepTalks: So, as I was just saying, you know, this is really the first episode in a series that I’m doing where I want to highlight local businesses, um, that can generate passive income while not requiring a lot of, um, management or time commitment.
And I may be wrong, so I definitely want to learn from you. So maybe you can start with sharing a little bit about. yourself and how did you get started into entrepreneurship?
Andrei Cucit of VendingZone: Yeah. So I think, um, I started becoming really interested in, uh, being an entrepreneur and sort of starting my own business and being self employed and all this stuff around 2020 when COVID was pretty bad.
And, um, I was spending a lot of my time inside sort of just doing research on, um, you know, e commerce and stocks and ways to make money online and just a whole bunch different things. And, um, Uh, I ended up finding videos at one point of, um, [00:02:00] You know, like laundromats and stuff like that, and car washes, mostly in the States.
And, um, I realized they were a little out of my price range there to actually buy one of those and start running that business. Um, but then I saw videos of, uh, vending machines, and I thought, that’s an interesting way to make money. So I, I went on Kijiji, and I, I saw a bunch of sellers for vending machines.
And it’s, uh, yeah, it’s been a journey since then.
Sushant Misra of TrepTalks: So it’s been almost three years, I guess, uh, since, you know, you started doing research. What does your business, what does your vending business look like? And can you talk a little bit about, you know, what kind of time commitment, like what, what kind of time do you spend in the business?
Are you doing other things as well? And this is really kind of a passive income business for you.
Andrei Cucit of VendingZone: Yeah. So right now, uh, these days, my main sort of thing that I’m doing is I’m actually a mortgage agent. I got licensed two months ago and I’ve been [00:03:00] sort of doing that full time. Um, so this is more of like a side hustle type of thing, um, for now, until it grows.
It’s bigger and bigger. And then we’ll see what happens from there. Um, other than this, I’m also, uh, into music too, if you could call that a business, I guess it can be having a band. So we play shows, record music, do stuff like that. Um, and then, but I’m always searching for new ways to make money and new, you know, different, interesting side hustles.
And honestly, the, the passive ones always interest me how to make money while you’re pretty much not doing anything.
Sushant Misra of TrepTalks: Um, for sure. For sure. And I think these days so many people want to have these kind of businesses. Um, so you’ve been in this business for 3 years. How, how many vending machines and, you know, you’re doing mostly in greater Toronto area.
Like, how big is your or how many vending machines do you have? Right?
Andrei Cucit of VendingZone: So, at the moment, I have 9 machines all on location. My number of machines went up and down, um, over the years as I’ve been in business. Some I sold [00:04:00] because they were too far for me. Um, Others I sold for other reasons because I needed to get some, you know, and into other locations and stuff like that.
Um, but yeah, at the moment I have nine and, um, you’re asking about how often I, I would say I’d go like once every two weeks and I try to get the whole route done at once. Um, so once every two weeks to fill them up, collect the change from them, and then I would need one extra day to actually go deposit the money, um, and also buy more inventory.
So I’d say total work time would be something like two days every two weeks, something like that. So it’s
Sushant Misra of TrepTalks: pretty fast. I mean, that’s, yeah, that’s, that’s pretty good. Um, and having nine vending machines and in a period of three years, I mean, I would say that’s pretty decent growth. So let’s, let’s get into kind of the.
Um, a little bit more details of the business. So when you got started, you know, one of the things that you [00:05:00] obviously mentioned is you didn’t want to get into a business which required a huge amount of capital investment. Um, and personally, you know, any business. I think, you know, any business that seems a little too easy, there’s, there’s always, there’s sure to be a lot of competition also.
So can you share a little bit about your early, um, you know, research and what did you find and what really kind of sealed the deal for you that this is the business that you wanted to invest, whatever investment was required. And then can you share like those first days when you got your first machine and got started?
Andrei Cucit of VendingZone: Yeah, so I mean, the funny thing is when I was researching this type of stuff, most of the videos and most of these entrepreneurs were actually in the States, not really in Canada. Um, so it’s, it’s a little bit different there, especially with prices to get started with something like this and all that.
So, um, I didn’t have much [00:06:00] knowledge going into it. Um, but. I saw ads on Kijiji for machines for sale. There was one that caught my attention and that was two, um, and they were 5, 000 each. So 10, 000 for both. Um, and the reason I caught my attention was they were in locations that were, there was a lot of foot traffic.
So they were both medical clinics. Um, you have patients walking in and out all day. Um, The doors open pretty early and close pretty late. So, uh, it’s not just, uh, patients, but it’s employees and staff and stuff like that, that can use it as well. So I met up, uh, with the owner that was selling them and it was just a cash deal, pretty straightforward.
Um, it was 10, 000 for both. I got the keys to the machine, we signed off on everything, and then I was pretty much on my own. Uh, unfortunately, the guy that sold me these machines, um, wasn’t inclined to stick around and sort of mentor me in this. Um, so I was just kind of left guessing what to do after that, but, uh, I was [00:07:00] eager to get started.
So I just, I, I took the leap. I made the deal. And then, um, pretty much I figured everything else out from there on my own. After I bought them, um, I sort of found the instruction manuals for the model that I had online and I was able to, you know, work out how to troubleshoot problems when I ran into them and stuff like that.
Um, and yeah, I sort of, I did all the research myself and, uh, made a lot of mistakes along the way, but I slowly grew and bought more and more.
Sushant Misra of TrepTalks: So that’s, that’s so interesting. I mean, it’s an interesting position to be where you, you purchase a machine and you don’t, you don’t know how to operate it. Um, but let me ask you, I mean, there’s so many questions there.
So to me, it seemed like, you know, the person who was selling you these machines, um, Of course, to me now, it seems like the description you’re buying the [00:08:00] location rather than the business, right? Um, because anybody can purchase the machine, but if you don’t have the right location, or even if you have the location, you don’t have the right demographic, then maybe this business is not going to be very successful.
So when you purchase this, like, did you do any sort of like, do you ask this person to show you their, like. Um, some sort of a bank deposit or financial statement of like last year or two to, to be sure that of course, you know, if he’s saying that you’re making, you’re going to make 2, 000 per month, you know, that there is an actual expectation of doing that.
Andrei Cucit of VendingZone: Well, I, I tried to, but he didn’t have any records of sales or anything like that. Um, he just told me like, uh, the expectations that they would be making 500 each every month. 500 per machine and I sort of had to take his word for it. I I used sort of my I would say like my judgment and saw that these were located in um, [00:09:00] places where there was a lot of people Since they were medical clinics and I figured honestly, you can’t really get into this business world without taking risks and Like, you know, you’ll never know, even if he did give me some records, they could have been fake, they could have been, you know, altered to just show me higher numbers.
So at the end of the day, I just, I took the risk to do it. And, um, it turned out that the sales were lower than he stated for sure. But, uh, yeah, I mean, um, the, the only due diligence that I did, the main thing that I did was make sure that, um, there was no damage to the machines or anything like that. And everything was working before actually buying them.
Uh, one thing that I looked over was the cooling systems in the machines. Um, they weren’t working too well. And there was no way of me knowing that unless I actually opened it up to check. So I did end up having some cooling problems and I had to get some repairs done on the machines that cost. Some money and it set me back pretty early on.[00:10:00]
I mean, that’s
Sushant Misra of TrepTalks: a very interesting point. But so when you’re buying this machine, is the machine itself 5, 000 or is it kind of like, do you have to pay some sort of a rental and the building that you’re, uh, putting the machine? So there’s like an ongoing cost there as well.
Andrei Cucit of VendingZone: Yeah, that question I get asked a lot.
So what I found, um, over the years that I’ve been doing this, uh, the machines that I tend to go for are combo machines, which means they have drinks at the bottom that are cooled and they’re refrigerated. And then they got snacks on top. So, um, they’re called healthy max. Combo machines. That’s the brand name.
And they’re 3, 500 per machine, but people will also charge around a thousand per location and an extra 500 to put in card readers, which, um, we’ll make it a lot easier, not just for people tapping with their card, but for me to keep track of inventory on my phone in real time and sales and stuff like that, without the card readers, it’s pretty hard to see what’s going on remotely at [00:11:00] least.
Um, so yeah, um, It’s usually the locations won’t tend to ask you for rent or commission because they like the fact that they’re getting a free machine placed there for employees to use patients to use or whoever is, you know, in that area. Um, and. I’ve have seen cases where they ask for rent or commission, but I’d say 90% of the time you can get away by just saying, Hey, look, um, I run a vending machine business and GTA.
I’d like to put a free machine here for everybody to use and I’ll service it myself. You guys don’t have to do anything. And they hear the word free and you know, they like that and they say yes, most of the time without even asking for even thinking really to ask for rent or anything like that. But just to make it clear, you never buy like the spot where the machine is on, like the rights to it.
You just buy the machine that’s there. So if the, um, landlord or the manager of the [00:12:00] building ever says, Hey, I don’t want this here anymore, then it’s on you to actually move it somewhere else. So,
Sushant Misra of TrepTalks: wow. So there’s, there’s always that risk, but, but hopefully if, if a location. Has high foot traffic and you know, uh, it is a stable business.
I, I’m assuming that the case that they would ask you to move would be lower. So anybody who gets into this business, isn’t this really kind of a location scouting business where you’re always, you know, wherever you go, you’re looking. Now you probably have a radar where you’re always looking for buildings and you know, what kind of foot traffic it has, you know, is there, are there other vending machines?
I mean, what prevents, um, Are there a lot of locations? Let’s, let’s talk about, let’s say, you know, GT area. Are there a lot of locations where people have not already reached out and to put a vending machine? Like, uh, I mean, for example, let’s say, you know, a hospital, I’m, I’m [00:13:00] assuming most hospitals already have lots of vending machines and so forth.
And that’s probably a great location to have. But how do you find new locations?
Andrei Cucit of VendingZone: Well, the hospitals are usually the big players in the game. And it’s very hard to get your hands on locations like hospitals. And, um, um, like I’ve seen sometimes they’re in shopping malls too and stuff. And places like that, very hard to get your hands on them.
But if you were talking local businesses and just anything, because you could really put it anywhere. It could be a warehouse, a medical clinic. It could be anything that you can think of. It could have a machine in there. Any kind of company has an employee staff room where you can get a machine for employees to use when they go on break.
Um, I’ve seen car dealerships that are, that have a lot of these machines too. Um, so there’s definitely a lot of places that don’t have any, and I have reached out to a lot. But you’d be surprised how many people actually don’t respond to me or say that they’re not interested to have one in there at all.
They’re just not looking for one. [00:14:00] Um, and I’m not sure why, because it’s not, you know, there’s no cost for them, but it seems like they just, maybe they think it’s a hassle that they don’t want to go through. Uh, so I’d say before you actually get that one, yes, you have to go through a lot of different places.
Sushant Misra of TrepTalks: Wow. Very interesting. Um, so.
So the machine, like why, um, you know, you purchased this machine secondhand and I’m assuming, you know, you didn’t go to buy this new one because, you know, with a new one you would be guaranteed guarantee that it’s gonna work and probably get some training also, like now I think you, you purchased your first couple of machines because of course you were getting the location.
But now when you’re, you know, going locations, are you, Are you purchasing new machines or are you, you know, if somebody is willing to sell you the location, then, you know, you say, might as well, you know, [00:15:00] just spend the money because I’m getting the location.
Andrei Cucit of VendingZone: So that depends on, um, if I’m, if I see some deals online that really makes sense to me location wise, and I don’t want the hassle of buying one and moving it to a new location and stuff like that, then I would, but the deal has to make sense.
Otherwise, um, it is. Um, a lot more cost effective to just buy the machine from the supplier and then find your own location. So cost differences could be like, you’re only paying 3, 500 for the machine and that’s it because you’re finding your own location versus paying 5 to 6, 000 for a machine already on location.
So you can cut costs quite a bit. And what I tend to do is I approach these businesses in person and I just, you know, hand them a business card and say, if this is something that will interest you. Uh, we’ll talk about it and then I’ll contact my supplier. They’ll help me with the move and everything and the installation and from there it just basically starts doing sales [00:16:00]
Sushant Misra of TrepTalks: Now when we’re talking about vending machines, I think every Country has its own kind of culture and machines, right?
I mean, you may have different cultures, um, your machines, the way, you know, the way you’re describing is mostly to me seems like, you know, box and, you know, chips and those are chocolates and those kind of things. Have you seen or have you ever thought of going into a vending machine business, which is like dispensing some other items like some, some sort of a novelty item, but I’m assuming that would be a much bigger risk because, you know, you don’t know if people are going to buy it.
Andrei Cucit of VendingZone: Yeah, I mean, I, where I get my wholesale products from, um, it’s. They have mainly just snacks and drinks, but they do sell interesting things that I don’t see in other stores. For example, things that are imported from Japan or other countries that, you know, different flavors of Mountain Dew, for [00:17:00] example, or Coke or energy drinks that you won’t really find in other stores.
And I feel like that’s a good opportunity to test out those products and see if people like them. Um, so from time to time, I’ll actually switch out a generic, uh, thing, like a sprite, for example, for something a little more interesting, just to see if people take it and how they react to that. Um, when it comes to like actual items, I have thought about also expanding into, uh, claw machines and stuff like that, where, uh, people will try to, you know, win a prize and stuff like that.
But if we’re talking novelty items, where, um… There’s not much that I can think of because the only issue there is the price. Um, you can’t really put like a 20 item in a vending machine. So it would have to be something small. Yeah.
Sushant Misra of TrepTalks: And the reason you can’t put a 20 item is because there’s a… The risk of theft.
Andrei Cucit of VendingZone: Um, I mean, it’s not just the theft. It’s also the vending machines are more for convenience. And [00:18:00] I don’t really see somebody, let’s say, in a waiting room or in an employee break room, just kind of walking up to it and making a 20 purchase instead of just buying a snack. You know what I mean? Unless it’s placed maybe in a mall or somewhere where people are already spending money, then maybe it would make a little more sense.
But that’s further down the line right now. I’m still trying to Mhm. Um, I’m continuously learning now, even when it comes to just the snacks and the drinks, and I’m still trying to see what works and what doesn’t work and all that stuff. Yeah. I mean, my, I’m
Sushant Misra of TrepTalks: thinking, you know, if you look at the residential buildings, right, like condos and apartments and things like this, um, Could there be an opportunity for a vending machine that kind of dispenses, you know, some of these things that people need, like, you know, toothbrush and toothpaste and I mean, they’re not necessarily very expensive item, but it does occur that people run out of these items every once in a while, you know, like a soap or a shampoo or, you know, [00:19:00] those kind of things.
Um, a vending machine that dispenses those, those kind of household items and put them in, like, these kind of locations. I’m, um. Do you think that might work? Yeah. But that would require a different kind of ven machine. I, I assume.
Andrei Cucit of VendingZone: Yeah, I’d say, um, not necessarily because as long as it can fit between those coils that actually spin and drop out the products, then you could put anything.
It doesn’t have to be snacks or drinks. Um, the only, um, thing I could see going wrong there is, uh, you would, you would basically need to look for not necessarily condos more like hotels, I would say, or places where there’s guests and they need like stuff like toothbrushes and, you know, things that they’re going to be using overnight.
Um, the only, um, hurdle I could see you having to get over is. Um, why wouldn’t the hotel do that themselves to make money themselves instead of letting you put it there to get the sales for them? Um, but it’s definitely possible. It’s, it’s definitely, [00:20:00] it’s a good idea. And the possibilities, like I said earlier, endless, just because of the amount of locations that are out there, you can, this could be literally anywhere.
There’s no limit to, you know, where you can put these things.
Sushant Misra of TrepTalks: So to me, it seems like the big limitation here is that, um, I mean, have you tried, like you said that it basically requires about a couple of days of work every two weeks, right? Have you tried to, as you’re adding more and more machines, try to like outsource some of that work?
Like hire someone who can… Do that route, you know, fill, fill the inventory and of course you would, you would want to go yourself to collect the money. But, um, but let’s say that, you know, if you are in GTA area and let’s say you want to create a vending machine business in Hamilton, you know, of course you don’t want to, you don’t want to be doing back and forth.
Two weeks. So you can add from where someone who can do that. Um, that’s something
Andrei Cucit of VendingZone: that you’re considering. [00:21:00] Yeah. So, um, the thing with that is that, uh, it cuts a lot into profit margins when you start having to pay people to do this stuff for you, because profit margins are already at, uh, let’s say 60, 70% on the products themselves.
And, um, having somebody to go and do this, um, they would want to get paid Decently. I mean, at least minimum wage to go and fill these things up. And even that would, would cut into profits a lot. So, but not just that it’s also that there’s a coin and cash collections and it would have to be someone you trust not to pocket those when they’re collecting the money for you.
Um, I mean the sales I can track on my phone, so I would know if something is missing, but just kind of a risk where if somebody decided to take them and run, they could technically do that. So I try to stick with family and friends if I do need help. Um, I would recruit somebody that, that I’m close to and that I know is going to be a good part of the business and won’t try to, you know, steal from me and stuff like that.
[00:22:00] And, um, yeah, it’s interesting you mentioned that because I do have two machines in Orangeville that are very far from me. And, uh, those two machines, I, I do have somebody that takes care of them and we, we sort of worked out a deal where he gets a certain amount of money every month. For servicing both of those machines.
So it’s kind of a test run right now to see how it works. And if he ends up not being happy with that amount of money for the work, we might work out a percentage. Let’s say it does a certain number in sales. He gets 10% of that just for, you know, filling them up and stuff like that. Um, but that’s, yeah, it’s sort of an experiment right now to see how it goes, but, uh, they’re really good locations and I didn’t want to sell them, which is why I got somebody to try to manage them for me instead.
Sushant Misra of TrepTalks: So I guess that’s kind of the bottleneck in this business, right? Like you can’t, it’s like you can’t, it’s not very easy to create a big empire out of [00:23:00] vending machines because, you know, unless you have thousands of machines, which is probably you’re covering, uh, I think it will be difficult to manage, you know, people, different people are, uh, Um, filling it and everything.
So, I mean, in your opinion, if somebody is trying to get into business, I mean, everything that, you know, so far, within like a 3 year period, um. Would you recommend that, uh, you know, it’s really kind of a business of opportunity that, you know, if you’re looking at a location and you, you see that, you know, certain location may require a vending machine, you can put it there and maybe it will start generating a few hundred bucks extra income for you every month.
And if that’s good enough for you in terms of in a business, then maybe this is, this is okay. But what are your overall thoughts on the vending machine business so far?
Andrei Cucit of VendingZone: I mean, I think, um, if we’re talking. [00:24:00] Let’s say 40 machines. It is still doable even for one person to service 40 machines, because then you would just be breaking that up into maybe Three, four days of work as opposed to two and just doing as many as you can, especially one big thing is having them close together and close to where you live.
So you’re not spending a lot on gas and driving a lot. So if let’s say I had 40, for example, and they were all where I live here, I for sure could no problem get them done in 2 to 2 to 3 days, I would say, and then just. The other two weeks, I just wait for them to make money and go stock up again. Uh, the only downside to that is having 40 machines.
Um, The maintenance and the repairs when stuff starts to go bad Sometimes it’s not you know, it can happen all at once or every month one machine goes down and every month You have to fix something and it’s just uh, it becomes a headache. So I think
Ultimately, you should have like a, an [00:25:00] amount in mind that you want to be making every month. And try to reach that and sort of that’s it. After that, if you want to grow the business, that’s when employees start to come. Because if we’re talking 100 machines or more, um, employees would make sense then in the profit margins for sure.
Not to mention that you would probably have a warehouse at that point for stock and stuff like that. And, um. You know, people tend to not just run the business like this, but also sell machines, sell parts, resell machines or locations. And it’s something that I’m open to doing too from time to time if I have a profitable location, but I’m done taking care of it.
I’ll sell it to some other entrepreneur that wants to start in the business. And I offer him not just the machine itself and the location, but also, um, the opportunity to learn from me and I’ll, I’ll sort of mentor him and guide him along the way, because I don’t want them to have the same experience I did where they’re kind of handed the keys and then they say bye and they’re on their own.
Sushant Misra of TrepTalks: to me, it almost seems like, you know, people get into this business. [00:26:00] Almost like, you know, it may be your first business or something and you learn the business, but ultimately you realize that this is not scalable for most people. It’s not scale of the kind of time and money and effort. It’s requiring, um, and then you basically, you know, exactly, you know, that you try to sell that to someone else who can take over that and maybe use it to use it as a learning opportunity.
Andrei Cucit of VendingZone: Um, yeah, for sure. I think it’s a brilliant learning opportunity, especially for people that have never run a business before, because it’s, um, it’s definitely easier than other businesses to run and start up and do all those things, because there isn’t any marketing involved. There isn’t any, you don’t need a website or social media or any of that stuff, and there’s no ongoing cost.
So if you don’t make money, you don’t lose money. Um, of course, unless, uh, the machine breaks and you lose on your investment that way, but there’s no ongoing costs that you have to [00:27:00] pay every month. So it is a very easy business to get into. Um, but I, I want to, you know, let people know. You gotta give them a more realistic look into how it is, especially in Canada to run a business like this, because on TikTok YouTube and all that stuff, you see these guys saying, Oh, I make, you know, a hundred thousand a month from the vending business and I don’t do any work.
It’s, um, not really attainable unless you’re investing a lot of money. Um, So,
Sushant Misra of TrepTalks: yeah, I mean, based on what you’ve told me, it’s like, you know, when you started out the locations, you know, you were promised 500 per per machine, uh, which you said turned out to be a little bit more. Of course, you know, any seller would try to, you know, double the revenue that they’re making to try to sell you.
Um, yeah, so, so, yeah, very interesting and very enlightening. I think so many people, I’m sure many people are going to find this discussion very useful. Are there any. [00:28:00] There isn’t any, um, any sort of regulatory issue in Canada that kind of, um, regulates. vending machine businesses at all. So it’s pretty much kind of free range where, you know, you, as long as you have the permission from whatever location you’re working with, uh, you’re
Andrei Cucit of VendingZone: free to do it.
Yeah. The only thing that, um, um, is a requirement in Canada is to register the business, either as a sole proprietorship or a corporation, um, because it’s something that you’re making money from. So. They will need to know that it’s it’s a legit business that’s operating in Canada, which is a very easy thing to do, and it’s not expensive at all.
When you first register a sole proprietorship, um, which I recommend everyone does when they get started. And then, as business grows, they can upgrade to a corporation, make it a little bit more professional and stuff like that. But once you have that Ontario business number, it’s smooth sailing from there.
Sushant Misra of TrepTalks: So initially you said that you, you were looking into other businesses also like, you know, uh, I think you mentioned laundromat and, um, car washers and those kinds of things. What did you learn? Well, you said, you know, it was too much investment at the beginning, but did you, did you think that those businesses had a better opportunity?
Like if, if you were able to come up with the investment, do you think that those are better to get into?
Andrei Cucit of VendingZone: Yeah, and the interesting thing is that a lot of vending machine business owners end up upgrading to laundromats eventually, once they make enough money in the business and stuff like that, because what a laundromat gives you is basically all the machines in one place, um, with No need to purchase inventory either at that point, since you’re not, I mean, you can always have a machine in the laundromat or a few, uh, that’ll be up to you, but it’s basically like you’re, you’re upgrading and you’re simplifying your already existing business, making it all into one place.[00:30:00]
And it’s definitely something that I’d be interested in getting in the future. The more I build up capital, it’s. It’s they’re still very doable investments, I would say, um, especially if you do some sort of payment plan instead of paying it all at once. Laundromats go for between 100, 000 to 400, 000, depending on size and location and all that.
So they’re less than what real estate is nowadays here. So it’s definitely doable.
Sushant Misra of TrepTalks: Yeah. But I’m assuming with laundromat, I think probably a big issue also is like the rent, right? You probably have to get a building or location where you have to pay the rent.
Andrei Cucit of VendingZone: Yeah, the lucky ones are the ones that actually own the building itself and operate the laundromat at the same time because they have no rent or anything.
Um, but obviously investing in a building like that would be a lot more than just buying the business, but profit margins are typically good, even with rent on laundromats, [00:31:00] because it’s a very simple business that everybody needs to use, um, and. I mean, it’s pretty low risk. Your only risk is same with the vending machines.
If something needs maintenance or something breaks and you have to pay for it, that’s pretty much your main risks there. Yeah, same with car washes.
Sushant Misra of TrepTalks: Yeah, yeah, for sure. Um, So as, as an entrepreneur, you know, in every entrepreneurial journey, I know you, you did mention some of the mistakes that you made, or, you know, uh, things breaking down and those kinds of things, uh, in the last three years, what would you consider has been your biggest mistake or failure or lesson learned?
That you can share with others, uh, that may be beneficial for others.
Andrei Cucit of VendingZone: Yeah. So one of my biggest mistakes I would say was during the first deal that I made with those two machines in the medical clinics was, uh, not making sure that they were in good condition before buying them [00:32:00] and having to basically get the cooling systems repaired for both machines.
Um, which is actually something that ends up breaking most often in these machines is the cooling systems and the compressors and stuff like that inside the machines. But, um, yeah, once once I got those repaired, I realized that I had to do a little bit more homework on the machines themselves before actually making a purchase like that.
Um, certain things, like I said before, it’s still going to be a risk, but, um, other things you can sort of, you can minimize that risk by doing your research and your homework and stuff before purchasing. Um, so yeah, that, that was one of the bigger ones just because of the cost involved to repair those cooling systems.
The other thing I would say is, uh, when buying new machines, be very aware of how far they are from where you live because, um, I was very eager to buy what seemed to be very good locations and stuff like that. And they were, but they were [00:33:00] just a little too far from me and I wasn’t able to service them as frequently as I would have liked to.
Um, so be patient, I would say, and just, you know, wait until that deal comes around. That’s Close to where you live, maybe 30 minute drive max, I would say. Um, even less than that, if you can, and, you know, keep your root close, keep your root local just to make it easier for yourself. Yeah, for
Sushant Misra of TrepTalks: sure. Because, I mean, of course, you know, there’s the gas cost, but then of course, you know, you’re spending your time and that has a big cost involved also.
I mean, since you’ve been in that, in this business, have you come across other similar entrepreneurs who are in vending business or, you know, someone who. Who has been able to scale this to a much bigger extent, uh, and is doing rather
Andrei Cucit of VendingZone: successfully? Yeah, so I’ve, um, I’ve bought some machines from, um, it was actually a team of people.
I think there were three of them [00:34:00] who actually sold their machines to me because they were upgrading to laundromat. So I, I still do need to, I still have their contact and I need to follow up with them at some point just to see how their business is doing and maybe get some tips on if I ever wanted to upgrade to a laundromat, how that would look like.
Um, but I, I like to keep the context of, um, Anybody that I run into, for example, if I’m selling a machine and someone wants to buy it, um, and I see that they’re very entrepreneurial like myself, and they want to, you know, learn, learn how this business works. I’ll always keep their contact because you never know.
Maybe we’ll partner up and make a purchase together, or I can get them to help me service a machine that I don’t want to service anymore. Um, just so they can learn more and stuff like that and make some money without an initial investment. Um, so i’m always i’m always whether i’m selling one or buying one I like to keep the contacts of these people that are in the game just to You know just for future use in case I need them for anything.
Sushant Misra of TrepTalks: Definitely. That’s that’s such a great [00:35:00] idea um So now I’m going to move on to my rapid fire segment and this segment I’m going to ask you a few questions and you have to answer them maybe in a word or sentence or so. Um, the first, the first one is. One book recommendation for entrepreneurs. Um,
Andrei Cucit of VendingZone: and why?
Um, so I, well, I’m going to be honest with you. I don’t read a lot of books. Um, every e commerce person or guru you see online will tell you, you have to read every morning for however many minutes to be successful. Um, I disagree with that. I think there’s so much information online and even just on YouTube that you can find that, um, I mean, if you just don’t like reading, you don’t like reading, but, um, uh, this book called rich dad, poor dad, that I’m sure a lot of entrepreneurs know and I’ve heard about was the one book that after I read that still around COVID times, when I started getting more interested in business, that is the book that I actually read.
And it’s sort of changed my [00:36:00] perspective on how money works and how business works and stuff like that. And, um, sort of changed my perspective, honestly, on the whole, um, The whole, like how working is, um, in Canada and how retirement works and how you make money and how much you’re taxed and all this type of stuff.
It’s sort of got me out of that bubble that I feel like too many people are in nowadays and got me thinking outside of that. Um, so yeah, that, that, that book, I recommend to anybody that’s starting any kind of business. Honestly, it’s a very good read.
Sushant Misra of TrepTalks: Yeah. And I think, you know. It’s universities and schools do such a disservice by not equipping people with that kind of, you know, financial knowledge.
And they really promote the employee mentality. And I think that book really kind of helps you to think outside of that employee improvement [00:37:00] mentality and really see how money works and how you can invest in things like that. Um, an innovative product or idea in the current e commerce retail or tech landscape that you feel excited about.
Andrei Cucit of VendingZone: I feel like e commerce is pretty oversaturated nowadays, at least from what I’ve seen. I feel like everybody’s doing it and more people are, um, at this point selling courses than they are actually doing e commerce just to teach other people how to do it and make money off of them. But I, I think chat GPT and similar AIs are very interesting nowadays because I’m, I like how everything’s being sort of automated.
Where we don’t have to do the work like certain, you know, certain aspects of the business. We don’t have to do anymore. And, um, anything that will save you time. I think I’m very excited about anything that will do stuff for you is very important. And, um, I’ve tried chat GPT a little bit. [00:38:00] And I mean, it’s, it’s powerful for writing anything.
Um, so the more they, they develop these types of AI’s, I feel like it’s going to be Thank you. You’re welcome. Really impactful.
Sushant Misra of TrepTalks: Yeah, that you could be really, really powerful. Yeah, for sure. Um, a business or productivity tool or software that you would recommend or a productivity tip.
Andrei Cucit of VendingZone: Um, I don’t really use any special productivity tools, I would say, but I, I think that one of the most important things when you’re running a business is scheduling and being able to stick to that schedule.
So honestly, just use Google Calendar. It’s free and everything that you need. We’ll be on there. Um, I’m sure there’s gonna be a bunch of other tools. People try to sell you, but if you’re able to have a good schedule and stick to it, um, and take the time to do your research and stuff like that, you know, block certain hours of the day for that.[00:39:00]
That’s one of the most important things for being successful. Definitely.
Sushant Misra of TrepTalks: Um, a startup or business that you think is currently doing great things?
Andrei Cucit of VendingZone: Um, I, to be honest, I don’t do much research on, on businesses unless it’s something that I’m, I’m interested in doing myself. Um, and like I said, I, I tend to lean more towards the passive stuff, but like I mentioned earlier, I think anything with AI tech is, is very important nowadays and making, um, Already passive things, even more passive is, is pretty cool.
I mean, even you were asking me earlier, why don’t you get employees to do your business that you do 2 times every 2 weeks? So to me, that’s like, okay, we’re going to take this already passive business and just automate it fully. Um, so yeah,
Sushant Misra of TrepTalks: for sure. Yeah, I mean. I think it just comes down to what is, [00:40:00] what is the value of your time, right?
So if you think you can spend that hour that you’re, you know, driving to go fill that machine, if you can spend that hour to, to create more money, then it doesn’t make sense for you to be doing that. Right. So, um, a peer entrepreneur or business person whom you look up to or someone who
Andrei Cucit of VendingZone: inspires you. Um, that’s a bit of a tricky 1 for me, because I usually there, I never really look up to 1 specific person.
I get inspiration from all over the place. I’d say I take bits and pieces from different people that I see online and different people in my personal life with what they’re doing. I take the pieces that I need to, you know, I need to grow my own business. And I, I sort of use them in that way. So yeah, I mean, I pick and choose, I, I’m not sure if I could really think of one person specifically.
Um, but yeah, yeah, [00:41:00] they’re everywhere these days for
Sushant Misra of TrepTalks: sure. Final question. Um, best business advice you ever received or you would give to other entrepreneurs.
Andrei Cucit of VendingZone: Um, I think the biggest thing is, um, just take the risk and don’t listen to anybody else’s concerns or doubts that they have when it comes to business and entrepreneurship and stuff like that.
I think one very important thing that that people forget is that, um, our most valuable thing. On earth is time and we want as much time as possible to do the things that we enjoy. So before sort of taking the safe route and saying, okay, I’ll work for 40 years, then retire when I’m 70. And, you know, can’t really do anything at that point.
Instead, just take, take a bet on yourself, take a risk, take a leap, you know, because life’s short and really do what you want to do. You know, there’s too many [00:42:00] what ifs I think that people ask and uh, the what ifs are always what hold you back. I think that that’s that whole fear of what if this happens, this is too risky, it’s too crazy.
Just think about the fact that everybody’s goals are pretty average for the most part and the top that is not very hard. You just need to think outside the box and sort of do what you love. Yeah, so that’s about it. Take charge. No, that’s
Sushant Misra of TrepTalks: a, that’s a great, great advice. Um, and without risk, I think people sometimes have to train themselves to take risks.
You know, people are, it’s difficult for a lot of people to, to take risks. So maybe the You know, maybe take small risks first, just like you did. And then as you become more confident in your decision making and, um, and, uh, then I think you can take bigger risks as well. Well, Andre, that was, that was a really [00:43:00] insightful discussion.
Thank you so much for sharing your story for really kind of. demystifying the whole, um, you know, vending machine, uh, business model, uh, you know, there’s a lot of, uh, articles and things like that online and they don’t really share kind of the details of it, you know, um, and hearing it from someone who’s doing it and who’s doing, you know, who has gone through the challenges and successes.
I think that’s a, that’s a really great way to do it. So thank you, Andre. I really appreciate your time. If somebody wants to get in touch with you, what’s the. You know, either about a vending machine business or anything. Uh, what is the best way
Andrei Cucit of VendingZone: to do that? Uh, right now, honestly, if anybody wants to learn about this type of business, um, they can send me an email right now.
I don’t have any social media or anything related to the vending business, but if they send me an email at, uh, it’s a vending zone, to, um, at gmail. com, just say that you’re interested in learning and, um, preferably [00:44:00] in Canada, because that’s where my expertise is, um, um, in Ontario, Canada. Um, then yeah, shoot me an email and i’ll help you out.
I’m always happy to talk about this. Um, I’ve even considered creating a course to help people get started in a business like this and sort of, you know, put my knowledge to use in a way. Um, so yeah.
Sushant Misra of TrepTalks: Awesome. Well Andrei thank you so much again. Really appreciate your time and thank you so much for sharing your story.
Um, and wish you all the very best, uh, uh, in your vending business and also when you ventured here for today. So thank you again.
Andrei Cucit of VendingZone: No worries. No worries. Take care.
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