This article records my own personal experience in doing vending machine business in Malaysia, as a way to earn extra income. If all goes well, I will enjoy 216% in returns by the end of the fifth year.
But I’m getting ahead of myself. Let’s start from the beginning. This article covers the following sections:
- Part 1 – Learning how the vending machine business works
- Part 2 – Learning how to start vending machine business in Malaysia
- Part 3 – Price for vending machine in Malaysia
- Part 3 – Is vending machine a profitable business?
- Part 4 – My bad experience with the vending machine supplier company
- Part 5 – Guaranteed Rental Return vending machine package
- Part 6 – Vending machine Malaysia – is this business worth doing?
Part 1 – Learning how the vending machine business works
In September 2020, I was happily browsing through the Home & Living Fair Expo at Mid Valley (and mentally furnishing my future house) when I chanced upon the vending machine supplier’s booth. I have no idea what they were doing there, but I, too, have heard about the high income potential from doing the vending machine business in Malaysia.
So I inquired. A nice sales lady immediately assisted me.
She told me about the company, which specialises in manufacturing and supplying vending machines all over Malaysia, and the various types of vending machines they offer, including:
- Snacks vending machine (available in multiple configurations. The most high-tech one got touch screen and e-wallet payment option)
- Hot food vending machine
- Drinks vending machine
- Mystery box vending machine
- Custom vending machine
- Cashless vending machine
- Coffee vending machine
- And more
The price for vending machines ranges from around RM8000 to over RM20,000 each, excluding financing (if available).
Part 2 – Learning how to start vending machine business in Malaysia
My sales rep, who runs 2 vending machines herself, said they have been a profitable venture for her (to be fair, of course she would say that), and it is easy for individuals to start a vending machine business in Malaysia (that too).
If I want to start, all I have to do is:
- Choose (and pay for) a vending machine package
- Pick a location I want (locations are provided)
- Collect the sales profit every month
She showed me a list of 100 or so ‘hot’ locations with ‘ready’ customers, all approved and waiting for vending machines to be installed. Locations vary; some are at public places, some at offices/factories, some at residential areas.
She explained the benefits of starting vending machine business through the company, as they provide many types of assistance, including (some services are included in the price, some with extra charge):
- Finding suitable locations and negotiating rental with the property management
- Delivery of the machine
- Providing a variety of vending machine-friendly items
- Stocking the items
- Refilling the items
- Processing the payments
- Handling repairs
- And more
Part 3 – Price for vending machine in Malaysia
As for the price for vending machine, the company designed 3 types of business packages:
- Buy package – Buy a smart vending machine for RM20,000 in upfront capital + monthly cost of approx RM200-400 for location rental, possible Internet cost and refilling service (optional)
- Rent-to-own package – Put RM6000 downpayment for a smart vending machine + monthly cost of approx RM600-1000 for location rental, possible Internet cost and refilling service (optional)
- Guaranteed Rental Scheme package – more details on this in Part 6
Her sales pitch was very good and it’s obvious she is an experienced salesperson. The projected returns sound great (“most people break even by the second year, after that what you earn is pure profit”).
Part 4 – Is vending machine a profitable business?
The salesperson made it sound like vending machine business is the easiest thing in the world to profit from. But of course I have to do my research.
What I found out: It has potential, yes, but like all businesses, it’s not as ‘easy’ or ‘passive’ as the sales agent suggested.
Based on my research, I would be lucky if I broke even within 1.5-2 years; it really depends on the location. If you happen to pick a bad location, then you may not turn any profit at all! The risk of losing money is always there, because this is a business.
When I asked on social media, some people replied with their own experiences.
- Some made great profit (they got great locations, sourced own machines, etc).
- Some make a loss (horrible location, etc).
- Some bought/sold their vending machines from other buyers/sellers, bypassing companies like these altogether. You can find vending machines listed on Mudah.my.
- Some said they, too, have also heard and tempted by over-optimistic sales projection by agents.
I found out that there is also a type of vending machine scam in Singapore!
Despite that, I still wanted in. I checked and am satisfied with the legitimacy of the vending machine company. But mainly I was curious about the vending machine business. I figured, at the very least, I can write about it (and I did).
Part 5 – My bad experience with the vending machine supplier company
Initially, I picked the Rent-to-Own package (later, I switched to the Guaranteed Rental Return package – more info in Part 6) and paid RM6,000 to the vending machine supplier company back in September 2020. However, my personal experience with this package was not great.
First, I was told that all the locations shown to me during the expo were no longer available, they ‘ran out’ despite me paying the downpayment to book them. In short: they have pulled the classic overpromise and underdeliver tactic.
I was told to wait for new locations. Because it was the peak pandemic period and stay-home orders were given and everything, I (stupidly) accommodated and waited.
Finally, around January 2021, (a good 3 months after), a new sales agent contacted me. He introduced himself and told me he would contact me after they found new locations.
Around the same period, I received a letter via email, informing me of the delay of the vending machine (as if I didn’t notice). They blamed Covid-19 and offered a free month of rental as an apology. So I waited some more.
In March 2021, after about 6 months since I signed the contract, my sales agent finally contacted me with a location.
A location. One. That was a far cry from the list of ~100 over locations shown to me during the first sales pitch. I knew that location matters, so I asked as much details about the location as possible. After some prodding, I was given one more (just one more) possible location, which isn’t as good.
Was I annoyed? Yes. I wanted choice, and now it seems like I have to take whatever location is available. I had wanted to visit some locations before making my decision, to see the foot traffic and type of possible customers and safety of the location.
There were other things displeased me. I was told to attend a vending machine maintenance class, so I can learn basic troubleshooting of the machine in case it malfunctions. I was never told this, or if it was, only in passing.
I was also told to create a new company for the purpose of registering for e-wallet functionality. Reader, I signed the paperwork 6 months ago and was told everything was okay. Suddenly I was told to do additional work. How’d you feel?
Part 6 – Guaranteed Rental Return vending machine business package
After complaining to my agent, he informed me of a NEW package that is better suited for me: the Guaranteed Rental Return package. Essentially, I will earn rental income on the vending machine instead of profit from item sales.
How it works is:
- Pay RM22,000 in upfront capital, get the machine within 31 days
- Receive monthly rental payment for 3 years – RM300 per month in Year 1; RM350 per month in Year 2; RM400 per month in Year 3 (Totaling RM12,600)
After the 3 years, you have 3 options:
- (1) Take the vending machine for own business,
- (2) Renew and continue earning rental payment of RM400 per month for 2 more years (RM400 x 24 = RM9,600), or
- (3) Sell the vending machine back to the company for RM22,000 (your upfront capital)
It sounds good. The contract is better than the rent-to-own scheme, too (the cancellation penalty is ridiculous). And he’s right, this is a better package for me. I wanted minimal work for the next five years.
Under this package, I don’t have to worry about opening a new company, stocking the vending machine, maintaining the vending machine, and more. I will simply receive income every month, no other action necessary.
So I switched plans. It will give me less profit potential, but will give me more peace of mind. Easy decision to make.
My contract came into effect in April 2021. As of writing time, the plan is going well – I am receiving RM300 rental income every month. Like I said at the beginning of this article, *if* all goes well, I will enjoy 216% in returns by the end of the fifth year.
If you’re interested in the same plan, leave your contact details in the comments section (or you can DM me on my social media) and I’ll pass your contact to my agent. You’ll also get RM1,000 discount (RM21,000 instead of RM22,000)
Note: Nothing is risk-free in business. I will be so happy if this business works out, but I will also not depend on it. You’ll be advised to use the same approach as well – don’t use life savings or emergency funds or anything.
Part 7 – Vending machine Malaysia: is this business worth doing?
So, is it worth doing vending machine business in Malaysia?
From this whole experience, I’ve concluded some general guidelines – here’s what I’ll do if I were to do vending machine business all over again:
Bypass vending machine supplier company IF: already have a location AND capital (ie upfront money) AND time to refill the machines AND technical capability to fix the machines (or know who to call when it breaks).
If I know what to do, I’ll simply buy the vending machines directly from whichever vending machine supplier with the best price or better yet, from previous owners (at Mudah.my, etc).
Go through a company IF: no experience at all. Going through company is probably the safest way to do it, they have the expertise. Be very sceptical of profit projection though – so far I am happy with the vending machine package I picked, but I need to remember that every business carries risk.
That is my experience in doing vending machine Malaysia business so far. If you are interested in it, what else do you want to know? If you have experience, how is your vending machine business doing and what did you wish you knew when you first started?
Let me know in the comments!