In the world of investments, where complex strategies and financial jargon reign, there’s a charming contender that’s been capturing attention for decades: the humble gumball machine.
While placing a gumball machine side by side with the concept of dividends might seem unconventional, these two seemingly disparate worlds share some intriguing similarities. Both promise a regular stream of income, the allure of passive earnings, and the potential to sweeten your financial portfolio.
But before dismissing a gumball machine as mere child’s play, let’s explore the question: Is a gumball machine a good investment?
I’ll share the surprising nuances that make gumball machines more than just treat dispensers. They might just be a smart investment avenue you haven’t considered!
Is a Gumball Machine a Good Investment?
Here are some things you should consider when deciding if gumball machines are a good investment:
4 Reasons Why Gumball Machines Are a Good Investment
1. Gumball Machines Can Earn You Up To $2,400 Per Year
Although the gumball machine is a passive business, it can earn you great money. However, the amount a gumball machine can make varies depending on a number of factors, such as the location and size of the machine. Most machines generate between $20 to $100 in profit per month.
You can make even more money, as illustrated below:
Large gumball machines in the best high-traffic locations can earn you more profit per year. For example, Quick Play’s 7-foot gumball machine was awe-inspiring regarding the generated profits, bringing in over $200 in less than a month. With some quick math, this is over $2,400 per year.
You can expect a lower income if your gumball machine is smaller in size. For example, ET Vending explains that their medium-sized gumball machine fetched a profit of around $30 in under two weeks. Some quick mathematics will tell you that it equals roughly $60 per month and $720 per year.
Gumball machines in areas with low demand for gumballs or low-traffic places can generate much less profit or even losses. Therefore, if your gumball machine generates less than $25 per month, consider relocating it to a high-traffic area. You need your gumball machine to be visible and placed in places where impulse buyers, such as kids, frequent.
2. Gumball Machines Only Require 2 Hours of Work Per month
There are multiple ways to make money as fast as within one hour or even two hours. Gumball machines are one of the investments that only require 2 hours of work per month, and most of that time is spent calculating your profits!
The main work you will have to do for your gumball machine includes refilling the machine with gum and taking out the earnings. Since you will have quarters, you will need to count them and roll them up before taking them to the bank.
Depending on the size of your machine, this can take a while to do. That is why I estimate this task to take two hours, including the drive to the store and the bank!
3. You Can Easily Increase Your Machine’s Profitability
Dividends are great because they tend to pay you a similar amount each quarter.
Yet I would argue that gumball machines are even better because you can actually increase your earnings on this investment!
From adding small prizes as incentives to changing the location of a store, there are little things you can do to increase your earning potential.
You can even move your machine to an entirely new location if you need to!
4. You Can Sell Your Gumball Machine Business
While you can often sell the stocks that earn you dividends, chances are they only go up at the average rate the stock market increases each year.
According to the latest research, the global demand for gumball machines share and market size was valued at around $17 billion in 2021. It was projected to reach approximately $18.66 billion in 2022 and is expected to rise to about $28 billion in 2030 at a CAGR (compound annual growth rate) of around 7% during the forecasted period 2022-2030.
You might be surprised to learn that businesses often sell for 2 to 10 times their profit amount.
2 Reasons Why Gumball Machines May Not Be a Good Investment
1. Maintenance Costs Can Add Up
Unlike dividends, your gumball machine might have maintenance issues that can cut into your earnings. I was lucky enough to never have an issue with my machine in the three years that I had it, but your mileage may vary!
As a good rule of thumb, the fancier and bigger your machine is, the higher the odds are you might have issues. You may also have to decide if your machine is even worth the effort of fixing or if you should just invest in a new one.
In fact, towards the end of his YouTube video, Reyes the Entrepreneur talks about how malfunctioning issues of his gumball machine cost him more money to fix, making it difficult to turn a good profit.
Therefore, as with any business, you might want to set some savings aside for these kinds of issues.
2. General Business Costs Eat Into Profits
Many people forget to count every business expense when determining their profits. For example, you will probably be using gas when driving to these stores! It may seem like a small expense, but with limited earnings each month, it is something to consider.
Additionally, if you decide to create an LLC, there may be administrative costs to account for. For example, in California, the Franchize Tax Board charges businesses $800 for simply existing, even if they operate at a loss or don’t conduct any business!
Of course, the more gumball machines you have, the less these things become an issue. That said, if you only plan on having one machine, you may want to consider your taxes, etc., carefully.
Final thoughts on if a gumball machine is a good investment
Like any other business, if you listen to advice, learn about the industry, and be strategic, the gumball machine can be an excellent long-term investment.
For instance, if you put the gumball machine in a high-traffic location and have expert support behind you, it will be an excellent investment as it can earn you up to $2,400 per year. The business is also flexible enough that you will only require 2 hours of work per month.
Moreover, gumball machines are a great investment because you can increase your machine’s value and sell your business at 2-10 times their profit amount.
However, unlike dividends, gumball machines might have maintenance issues that can cut into your earnings. Besides, the general business costs can eat into your profits.
Have you invested in a gumball machine yet? How much money do you hope to make from your gumball machine investment? I’d love to hear from you in the comments below!
