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My 11-year-old daughter for Christmas last year asked for a bubble-gum vending machine. She got the idea from hearing stories about a family member who had over

My 11-year-old daughter for Christmas last year asked for a bubble-gum vending machine. She got the idea from hearing stories about a family member who had over a hundred machines placed at one time. I thought it was a great idea. She placed one machine, then another. Now she has four machines, but she has only placed 2 of them. Each machine makes about a buck a day gross, 70 cents or so net. I'm purposely not doing any of the stuff this guy's dad did -- charge for gas, insist on doing the math, etc. For now all she has to do is buy the inventory. Once a month or so to pick up the "haul." I think if you push these things then you lose track of the point. Right now it's something she enjoys -- who wouldn't want to take a trip each month and come back with tens of dollars? If we were to get into marketing, sales, cash flow, or any of that? I think it would turn it into a chore. After all, geesh, the kid is only 11. The only thing I've told her is that she has to save up if she wants another machine, and the more machines she has placed in good spots the more money she will make. Looking back over the previous year, I think this Christmas gift might turn out to be one of the best presents we've ever given. It has the potential to teach so many lessons. The coolest part is that it is all driven by motivation on her side -- she was the one asking for the machine, she is the one picking out the product, she is the one saving up for new machines, she is the one responsible for scouting out new locations and making the pitch to store owners, etc. If she pushes a lot, she could make some real cash. If not, then she knows more about how these things work. It's a win either way.

pitt1980 15y ago
just curious, where did your daughter place her vending machine? who worked out the logistics of where it could be placed?
robfitz 15y ago
I didn't really mention timescales, but in my case he added the various complications gradually over about 4 years. It was never something I sat down and "learned". Whenever I started to drift away via boredom, a fun new twist would mysteriously appear. Love what you're doing w/ the gum machines -- think it's an amazing approach.
Cushman 15y ago
The epitome of small-scale, early-stage funding. Good investment ;)
hugh3 15y ago
What was the initial investment?
- DanielBMarkham 15y ago
  As I remember, $160 covered the first machine and bag of gumballs. We don't spend a lot on Christmas, so this was her "big" present that year. It was interesting listening to her telling her friends about what she got! It took her about six months of operating to save up enough for the second machine. Once that machine was operational, it took another 4 months for the third machine, and so on. (I think the fourth was a birthday present). It's been a great applied lesson in exponential growth. To answer the other commenter's question, she placed the machines in places she visited once a month anyway. Civic groups, local hairstylists, etc. A couple of these spots didn't work out, so she had to find new places. I would be lying if I said I wasn't disappointed that these two are sitting at home (even though she still manages to weasel 1 or 2 sales a day from the family, the little rascal) and I've wanted to talk to her about placing her machines where there is lots of foot traffic, but I've been biting my tongue. Mostly. I figure you can't motivate somebody from the outside. Every month when she comes back home with her and mom holding a big bag of quarters, I feel like that should be feedback enough.
  - qq66 15y ago
    Hahah! Your daughter is going to be your boss someday. :)
  - hugh3 15y ago
    Whoa. $160 initial investment for seventy cents a day profit? Your kid is investing at 160%! If I spent $50K on these, I could retire! (Except I wouldn't be retired, I'd be driving around all the damn time taking care of my three hundred and twelve gumball machines. But still!)
    - DanielBMarkham 15y ago
      Don't forget it's all cash income -- no waiting on invoices to post or people to write checks. You crack open the machine, and it's like Christmas. I think if you did this with a higher-margin item, say DVDs or electronics, you could retire. But the trick is, as you note, scaling all the footwork and overhead. It's not like you can farm out the collection and restocking, not unless you really, really trust somebody. And chasing around 100-300 machines, the people that manage the site, and the product that works? It's not a trivial thing to do at all. Not only maintenance, there's also always moving the machines around, and pitching store owners to put a machine onsite. Some of them look at it like competition. A couple guys refused to place them unless they got a piece of the action! After she finished pitching, they decided they would go out and buy their own machines. All for 20 bucks a month. Dang cheapskates. And don't forget there are big, serious players out there who wouldn't think twice of using dirty tricks (and the know them all) to quash you like a bug. She's lucky she's under the radar. Somebody dropping a couple hundred thousand for a few dozen high-end machines would not go unnoticed. I actually like the business model a lot. It encourages direct selling, there's lots of business math, and there aren't a lot of tricky issues involved. So yes! Kinda. If you could retire on 400-1200 bucks a month, I think it would work. Past that point, though, it gets ugly. Small scale? It rocks. Large scale? It looks much better on TV than it actually is.

pitt1980 15y ago

just curious, where did your daughter place her vending machine? who worked out the logistics of where it could be placed?

robfitz 15y ago

I didn't really mention timescales, but in my case he added the various complications gradually over about 4 years. It was never something I sat down and "learned". Whenever I started to drift away via boredom, a fun new twist would mysteriously appear. Love what you're doing w/ the gum machines -- think it's an amazing approach.

Cushman 15y ago

The epitome of small-scale, early-stage funding. Good investment ;)

hugh3 15y ago

What was the initial investment?

DanielBMarkham 15y ago
As I remember, $160 covered the first machine and bag of gumballs. We don't spend a lot on Christmas, so this was her "big" present that year. It was interesting listening to her telling her friends about what she got! It took her about six months of operating to save up enough for the second machine. Once that machine was operational, it took another 4 months for the third machine, and so on. (I think the fourth was a birthday present). It's been a great applied lesson in exponential growth. To answer the other commenter's question, she placed the machines in places she visited once a month anyway. Civic groups, local hairstylists, etc. A couple of these spots didn't work out, so she had to find new places. I would be lying if I said I wasn't disappointed that these two are sitting at home (even though she still manages to weasel 1 or 2 sales a day from the family, the little rascal) and I've wanted to talk to her about placing her machines where there is lots of foot traffic, but I've been biting my tongue. Mostly. I figure you can't motivate somebody from the outside. Every month when she comes back home with her and mom holding a big bag of quarters, I feel like that should be feedback enough.
- qq66 15y ago
  Hahah! Your daughter is going to be your boss someday. :)
- hugh3 15y ago
  Whoa. $160 initial investment for seventy cents a day profit? Your kid is investing at 160%! If I spent $50K on these, I could retire! (Except I wouldn't be retired, I'd be driving around all the damn time taking care of my three hundred and twelve gumball machines. But still!)
  - DanielBMarkham 15y ago
    Don't forget it's all cash income -- no waiting on invoices to post or people to write checks. You crack open the machine, and it's like Christmas. I think if you did this with a higher-margin item, say DVDs or electronics, you could retire. But the trick is, as you note, scaling all the footwork and overhead. It's not like you can farm out the collection and restocking, not unless you really, really trust somebody. And chasing around 100-300 machines, the people that manage the site, and the product that works? It's not a trivial thing to do at all. Not only maintenance, there's also always moving the machines around, and pitching store owners to put a machine onsite. Some of them look at it like competition. A couple guys refused to place them unless they got a piece of the action! After she finished pitching, they decided they would go out and buy their own machines. All for 20 bucks a month. Dang cheapskates. And don't forget there are big, serious players out there who wouldn't think twice of using dirty tricks (and the know them all) to quash you like a bug. She's lucky she's under the radar. Somebody dropping a couple hundred thousand for a few dozen high-end machines would not go unnoticed. I actually like the business model a lot. It encourages direct selling, there's lots of business math, and there aren't a lot of tricky issues involved. So yes! Kinda. If you could retire on 400-1200 bucks a month, I think it would work. Past that point, though, it gets ugly. Small scale? It rocks. Large scale? It looks much better on TV than it actually is.