Chasing Passive Income, Americans Turn to Vending Machines

With a brick of cash in his hand and a grin on his face, Jaime Ibanez shows his half-million YouTube subscribers a path to earning money without burning many calories: Vending machines.

In videos with titles such as “This Is HOW MUCH My Vending Machines Made IN 7 DAYS!!” the swoopy-haired 23-year-old Texan makes the rounds to his 51 machines, stocking them and taking the profits.

His channel promotes the idea that with diligence and luck, anyone can go from snacks to riches.

Vending machines might seem an unlikely candidate for trending investment of the 2020s, but the idea has captured the imagination of Americans dreaming of easier money. Some pursue chips and soda as a side hustle because their regular paychecks aren’t enough for them to get by. Others bet on vending machines as a ticket to upward mobility, to quitting their jobs and becoming their own boss.

The startup cost is low and the formula simple. Buy a used machine for $1,500, load it up with products from Costco , charge a 100% markup and let the crinkled dollars roll in. But turning a profit takes real work, and the machines can be a losing proposition when stuck in locations without enough hungry foot traffic.

There is a fair amount of competition, too. America has three million vending machines, an $18.2 billion industry, with the average machine generating about $525 in monthly revenue, according to the National Automatic Merchandising Association.

More than half of operators bring in less than $1 million a year, according to trade publication Automatic Merchandiser. Many are individuals who have other jobs.

Social media has fuelled the notion of finding financial freedom in vending machines. Between 2019 and 2023, the number of posts or comments mentioning passive income and vending machines more than tripled on X and increased by a factor of six on Instagram, according to Sprinklr, a social-media management platform. Google search interest in passive income increased some 75% during that same period.

“There’s a real sense that doing things the so-called right way won’t necessarily land you in the middle class,” said Lana Swartz, a media-studies professor at the University of Virginia who researches financial technologies. “If the old rules no longer apply, then there’s a searching for new rules to get ahead or to get by.”

Some vending-machine newbies say they are on their way to building an automated empire. Others’ dreams get snagged like a bag of Funyuns on a faulty coil.

Making sales while you sleep

Last spring Rob Smith, a 30-year-old truck driver in Orlando, Fla., spent $4,000 on his first machine, a credit-card reader and a load of snacks and drinks.

He recently acquired his fourth machine, which is at an industrial bakery. His first three machines take up three to five hours of his week and bring in about $1,500 a month in revenue, which works out to roughly $750 in profit.

“I’ve made sales at four o’clock in the morning, when I was sleeping,” he said. “That machine is still working whether I’m there or not.”

He hopes to scale up to 30 machines and quit his job.

Smith started looking for extra income because his goal of buying a house felt out of reach with only his day job’s pay. He chose vending specifically after he witnessed a colleague complain about a malfunctioning machine at work and then use it anyway.

“He still put his $2 in,” Smith said. “I was like, ‘I need to get a vending machine as soon as possible.’ ”

Some budding vendors pay $300 or more for online courses to learn the trade. Smith relied on YouTube, Instagram and Reddit to get going.

At one point, he stocked a machine with orange soda against the advice he got in an online forum. When it didn’t sell, he and his family had to drink three dozen cans themselves.

Empty calories

Tom and Missi Hakes of Midway, Ala., started vending after Missi, 40, saw videos on YouTube about the business. The idea seemed more appealing than their stints driving for Uber, shopping for Instacart and trying to make it as YouTubers.

The Hakes, who both have full-time jobs in health insurance, scouted out locations in Atlanta, the closest big city and two hours away. After their best lead fell through, they paid a woman they found on Facebook Marketplace $500 to find a location for them.

She sent them to two spots that didn’t work out, including a cheerleading gym. The manager there was on board until she learned that the Hakes hadn’t operated a vending machine before.

Tom, 48, posted on a forum wondering how to address questions about their industry experience. At their next meeting, with the owner of a gym, they reluctantly followed some of the forum’s advice: They lied and said they had a few machines.

“We didn’t want to get another no,” said Tom.

He then spent a month repairing a used machine they bought for $1,400, staying up on some nights until 2 a.m.

When it was ready, Tom and Missi struggled to wrangle it into the 15-foot U-Haul truck they rented.

“Two people is not enough to move an 800-pound machine,” she said.

The Hakes spent about $2,500 on their vending business, as well as 20 to 30 hours a week for much of last fall.

They pay $50 a month to park it in the gym and it costs about $330 to fill up. It is currently grossing about $30 a week.

If anything, the income has been too passive, Tom said, “because it’s not really doing a lot of sales.”

If the machine isn’t selling more by summer, the Hakes will consider leaving the location, or perhaps vending machines overall.

Hit Facebook Marketplace, then Costco

Used vending machines of questionable quality sell online for as little as $500. More reliable ones cost in the range of $1,000 to $2,000, according to veteran vendors. A new machine with a touch screen and a robotic arm could cost upward of $7,000.

Many used machines have a maintenance issue about once a year, and they need to be cleaned. Cash is dirty, said Ben Gaskill of Everest Ice and Water Systems, a vending-machine maker. “Somebody digs around for coins in the bottom of their purse and it’s got grape jelly on it.”

Vendors shop warehouse stores like Costco and Sam’s Club to stock up. One machine’s worth of snacks or drinks can cost $200 to $300 a month. Owners then charge about twice what they paid for each product, or more. Prices of food from vending machines were up 10.6% year over year in January, according to Labor Department data.

The top-selling items in vending machines are cold drinks, snacks and candy, according to the latest data from Automatic Merchandiser magazine.

“No matter how healthy you try to make the machines, people are going to buy that Snickers bar,” said Lory Strickland, who sells courses and one-on-one coaching with her husband, Barry, under the name The Vending Mentors.

A never-vending story

Selling online classes and coaching can sometimes be more lucrative than a given moneymaking idea itself, said Swartz, the University of Virginia professor.

In online forums, she said, “there’s the joke that if there are people making courses about it, then it’s already oversaturated as a side hustle.”

To capitalise on interest in vending, some experienced operators started selling their expertise to supplement the income coming in from their machines. Some transitioned primarily to training.

Hyping the vending-machine dream predates the internet, though. The first machines in the U.S. sold gum and appeared on train platforms in 1888.

In the 1940s, media outlets cautioned about “get-rich-quick schemes” promoted by “unscrupulous agents involving vending machines.” In 1960, the magazine now known as Kiplinger Personal Finance warned of “vultures in the business” who promised “that an $800 investment may produce $200 a month, and that only a few hours of work a week are required to enjoy such rich pickings.”

The Australian sharemarket rose during four of five sessions in the week ending 30 October, but the headline gain concealed a sharp divide between recovering miners, rate-sensitive property stocks and retailers hit by inflation and weaker trading updates.

The Australian sharemarket finished October with a positive week, although the route higher was anything but uniform.

The S&P/ASX 200 closed Friday 30 October at 8,908.1, gaining 112.9 points, or 1.28 per cent, from the previous Friday’s close of 8,795.2.

The All Ordinaries advanced 1.34 per cent to 9,025, while the more concentrated S&P/ASX 20 gained 1.11 per cent.

The benchmark rose during four of the week’s five sessions. It added 0.17 per cent on Monday and 0.46 per cent on Tuesday, before slipping 0.03 per cent on Wednesday. It recovered 0.50 per cent on Thursday and gained another 0.18 per cent on Friday.

The index briefly reached 8,933.3 but again failed to establish itself above the psychologically important 9,000-point mark.

The week’s central tension was between a resources recovery and a less forgiving domestic interest-rate outlook.

Materials gained 4.06 per cent, reclaiming part of the previous week’s heavy fall. Australian real estate investment trusts rose 3.77 per cent, financials gained 1.05 per cent and energy advanced 1.39 per cent.

At the other end of the market, consumer staples fell 5.13 per cent and consumer discretionary shares lost 2.35 per cent. Utilities declined 0.73 per cent and communication services eased 0.68 per cent.

Inflation changes the conversation

Australia’s September inflation data was the week’s pivotal domestic release.

Annual inflation of 4.3 per cent pushed market pricing towards another possible Reserve Bank increase and disrupted Wednesday’s early sharemarket rally.

By Thursday’s close, one widely followed market measure placed the probability of an increase in the cash rate to 4.85 per cent at approximately 80 per cent.

That pricing does not make an increase certain. It does, however, change the framework through which investors assess Australian businesses.

Companies dependent on discretionary household spending face renewed pressure on sales and margins. Property trusts, banks, developers and highly leveraged companies must be considered against the prospect of higher funding costs.

Banks present a more complicated equation. Higher rates can support margins, but they may also slow credit growth and increase arrears.

Miners recover

BHP gained 4.56 per cent across the week to close at $57.56, making a substantial contribution to the benchmark’s rise.

The recovery followed an 8.3 per cent fall during the previous week and helped lift the broader materials sector.

Northern Star Resources added 4.59 per cent, while Goodman Group advanced 6.85 per cent to become the strongest performer in the ASX 20.

The commodities picture was mixed. Gold fell approximately 3.12 per cent on the cited weekly measure, while Brent crude added around 0.68 per cent.

The Australian dollar was little changed at approximately US70.35 cents at the reference point.

Supermarkets and consumer shares retreat

The consumer-staples story was markedly weaker.

Coles fell 11.77 per cent after its first-quarter update, making it one of the largest significant-company declines of the week.

Woolworths lost 3.66 per cent and Wesfarmers fell 4.48 per cent to $76.69 as investors processed company trading commentary against the prospect of another squeeze on household demand.

The moves illustrate how quickly expectations can change when an apparently defensive company disappoints.

Supermarkets still benefit from the recurring need for groceries, but customers can trade down, shift between chains and reduce spending on higher-margin discretionary lines.

Wesfarmers carries exposure to several consumer categories through businesses including Bunnings, Kmart and Officeworks. A renewed rate increase would place more pressure on households already confronting higher prices.

The wider market’s biggest movements

Among companies outside the ASX 20, Mesoblast surged 27.32 per cent, SiteMinder gained 22.74 per cent and Zip rose 22.60 per cent.

The sharpest weekly falls included 4DMedical, down 33.51 per cent; Tuas, down 29.95 per cent; Catalyst Metals, down 17.47 per cent; and Champion Iron, down 13.35 per cent.

Those percentages require context.

The movements in BHP, Commonwealth Bank and other very large companies had substantially more influence on the index than similarly dramatic changes among smaller companies.

A 20 per cent move in a relatively small stock may attract more attention than a two per cent rise in a major bank, but the bank can have the greater effect on the market.

How the ASX 20 moved

The following list uses the S&P/ASX 20 constituents and five-session movements reported at the 30 October close.

Where the component feed did not publish a valid five-day comparison, no figure has been estimated.

BHP Group: Up 4.56 per cent

Commonwealth Bank: Up 1.66 per cent

Rio Tinto: Down 2.20 per cent

National Australia Bank: Up 0.48 per cent

Westpac: Up 0.08 per cent

ANZ Group: Up 1.92 per cent

CSL: Up 2.05 per cent

Macquarie Group: Up 2.19 per cent

Wesfarmers: Down 4.48 per cent

Woodside Energy: Up 1.43 per cent

Goodman Group: Up 6.85 per cent

Telstra: Five-day comparison unavailable from the cited component feed

Woolworths: Down 3.66 per cent

Fortescue: Five-day comparison unavailable from the cited component feed

Transurban: Down 2.40 per cent

QBE Insurance: Down 1.21 per cent

Aristocrat Leisure: Up 0.63 per cent

Northern Star Resources: Up 4.59 per cent

Sigma Healthcare: Down 0.36 per cent

Brambles: Down 1.20 per cent

The companies dominating the conversation

Coles was the week’s standout media-facing company for the wrong reason.

Its trading update produced an outsized repricing and drew attention across the grocery and retail sectors. Woolworths and Wesfarmers were also scrutinised as investors considered how stubborn inflation and another possible rate rise could affect sales volumes.

Bank of Queensland offered a more positive corporate signal.

The bank reported that its FY26 net interest margin had risen six basis points to 1.70 per cent, ahead of the 1.68 per cent expected by the market according to contemporaneous reporting.

Bank of Queensland shares rose 5.8 per cent on Thursday, while the major banks also rallied.

Endeavour Group finished Friday at $3.39, up 4.31 per cent on the day, and released the results of its annual general meeting.

The movement was notable during a week in which investors were highly sensitive to consumer-facing companies. The AGM result should not, however, be presented as the sole cause of the share-price increase without further supporting company guidance.

Mesoblast’s 23.4 per cent Thursday rise and 27.32 per cent weekly gain returned the biotechnology company to the centre of market attention.

For editors, it is important to separate the size of that percentage movement from its influence on the index. Mesoblast was an eye-catching performer, but it did not drive the ASX 200 in the way BHP or Commonwealth Bank did.

Qantas remained part of the broader market conversation as investors watched travel demand and company updates.

However, the primary-source review did not locate a fresh Qantas announcement that justified attributing a major weekly market movement to new company information. The airline should therefore remain on the monitoring list rather than being forced into the week’s causal narrative.

Is Australia’s IPO market reopening?

The official ASX new-listings pipeline remains active but selective.

ASX’s upcoming-floats page included formal applications with offer timetables extending through October and at least one anticipated listing on 30 November.

The exchange notes that its page covers companies for which a formal listing application has been received. It does not represent every company privately exploring a float.

The wider debate concerns whether Australia’s public market is sufficiently competitive when high-growth businesses can pursue capital in the United States or remain privately funded for longer.

ASX has previously raised possible reforms designed to improve the attractiveness of the local market. These include debate about reducing minimum free-float requirements and streamlining aspects of the admissions process.

An enhanced fast-track pathway for qualifying applicants can shorten the review process, reducing the execution risk created when market conditions change during a long IPO timetable.

That does not remove the more fundamental challenge.

New floats still require credible earnings or a convincing growth pathway, sensible pricing and enough genuine free float to support trading after listing.

Investors can already obtain diversified exposure through low-cost exchange-traded funds or buy established, liquid businesses. A float must therefore offer more than novelty.

The current pipeline suggests that the IPO window is open, but it is not indiscriminate.

What investors will watch next

The Reserve Bank’s next decision now sits at the centre of the domestic outlook.

Any change in cash-rate expectations will flow rapidly through banks, retailers, property trusts, listed developers and companies carrying substantial debt.

Investors will also watch whether the materials recovery can continue, whether BHP can hold its rebound and whether consumer companies provide further evidence of slowing demand.

Overseas, technology-sector volatility, commodity prices and the United States interest-rate outlook will continue to shape Australian trading.

The week’s 1.28 per cent headline gain was encouraging, but it was not a broad declaration of confidence.

It was a rotation towards miners, selected financials and property securities—and away from consumer businesses facing a more difficult inflation and interest-rate equation.

Market dashboard

S&P/ASX 200: 8,908.1, up 1.28 per cent for the week

All Ordinaries: 9,025, up 1.34 per cent

S&P/ASX 20: 5,214.7, up 1.11 per cent over five sessions

Best sector: Materials, up 4.06 per cent

Next-best sector: A-REITs, up 3.77 per cent

Weakest sector: Consumer staples, down 5.13 per cent

Major large-cap winner: Goodman Group, up 6.85 per cent

Major large-cap loser: Coles, down 11.77 per cent

AUD/USD: Approximately US70.35 cents at the weekly reference point

Gold: Approximately US$3,885 an ounce, down 3.12 per cent on the cited weekly measure

Brent crude: Approximately US$117.70 a barrel, up 0.68 per cent on the cited weekly measure