This article records my own personal experience in entering the 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.
If. That’s what was promised to me.
Unfortunately, my experience has not been great. By this point, I’ll be happy if they deliver on their promise, but won’t be surprised if they don’t.
For obvious reasons, I will not mention the name of the company, but they’re quite a popular vending machine supplier in Malaysia and you can find them easily on Google or Facebook.
But I’m getting ahead of myself. Let’s start from the beginning.
Part 1 – Met the sales agent and learned how 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
- And more
The prices of these vending machines range from around RM8000 to over RM20,000 each, excluding financing (if available).
How to start vending machine business in Malaysia
My sales rep told me about her experience running her own vending machines (she said she owns 2 units herself), how they have been a profitable venture for her, and how easy it is for individuals to start a vending machine business in Malaysia. All I have to do is:
- Choose (and pay for) a vending machine package
- Pick a location I want (locations 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
As for the vending machine business package, I could either pick the:
- 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)
- (Other packages are available too, but I quickly dismissed them over maintenance issues – for example, I must figure out how to clean and wash the hot food and beverage vending machines options. Not something I want to do)
Her sales pitch was very good and it’s obvious she is experienced with using high-pressure sales tactics. The projected returns sound great (“most people break even by the second year, after that what you earn is pure profit”). Believe me, I was tempted to sign up on the spot. The only reason why I didn’t is due to my ‘sleep on it’ personal policy.
A few days later, after thinking about it and after doing some due diligence work on the company and on the business itself, I decided to go ahead with it. It didn’t help that the sales agent kept reminding me that the available locations are ‘going fast’.
I transferred over RM6000 for Option 2 and proceeded to the paperwork stage.
Is vending machine a profitable business?
Important note about the vending machine business: 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!
So, be aware. The risk of losing money is always there, because this is a business. Despite that, I still wanted in. I was curious about the vending machine business. I figured, at the very least, I can write about it (and I did).
So. Downpayment, done. Paperwork, done. By this point, I was excited – I can finally pick my vending machine’s location from the remaining ‘ready and hot’ locations which were going ‘fast’. I was also excited to test out products – which one sells, and which one doesn’t? Sales data, how fun! I even did a mini market research!
Unfortunately, dear reader, things went downhill from here.
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.
Part 2 – Waited for months to proceed
Every few weeks, I would shoot them an email to ask about the status of my vending machine. At first, they would reply back and apologise for the wait.
And then they just stopped replying to my ‘what’s the status of my vending machine’ emails altogether. My sales agent was not much help either – she had quit the company and simply referred me to HQ. (I should have seen it coming actually. On Glassdoor, I can see some negative reviews about the company, indicative of high turnover rate).
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 apology.
So I waited some more.
And waited some more.
And waited some more.
Part 3 – Finally concluded
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 that made me unhappy. 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?
Anyway, to make a long story short, I went to the HQ to meet my sales agent.
Things have changed. Again. He suddenly informed me of a NEW package: the Guaranteed Rental Return package. Essentially, I will earn rental income on the vending machine instead of profit from item sales.
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.
It sounds good. The contract is better than the rent-to-own scheme, too (the cancellation penalty is ridiculous). And I was already sick of dealing with the company, and wanted minimal interaction with them for the next five years.
So I took it, I switched plans. It will give me less profit potential, but will give me more peace of mind. Easy decision to make.
Vending machine business in Malaysia: worth it?
So, is it worth to do vending machine business in Malaysia?
When I shared 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! Thankfully the company I went with is not a scam. They just overpromised and under-delivered.
From all these, I’ve concluded some general guidelines – here’s what I’ll do if I were to do vending machine business all over again:
- If I 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), I’ll bypass the company. I’ll simply buy the vending machines directly from whichever supplier or from previous owners (at Mudah.my, etc)
- If I don’t have any or all of that, then yeah going through company is probably the safest way to do it. They have the expertise. My experience has been meh, but maybe that’s just my luck with this particular company, or simply bad timing. Finding these companies are easy – just type in ‘vending machine business malaysia’ and so many ads will pop up.
So far, I have not received any payment yet, so I cannot tell you whether starting vending machine business is a good decision or not for myself. In any case, I don’t regret experimenting with it. Now I know that there are multiple ways of doing the business (buy own machine, do rent-to-own, profiting from rental only, etc). I’ll update this article with more information after I learn more.
My big questions to you now:
- If you’re interested in doing vending machine business in Malaysia, what information would you like to know?
- If you’re have experience, how is your business doing and what did you wish you knew when you first started?
Let me know in the comments!
Lastly: for more income ideas, please browse through my articles related on Earning Money.