Podcast Summary: The Side Hustle Show - Episode 662: From Zero to $50k/mo in Vending Revenue in 16 Months
Host: Nick Loper
Guest: Anthony Koloje
Release Date: March 20, 2025
Podcast: The Side Hustle Show by Nick Loper of Side Hustle Nation | YAP Media
Introduction
In Episode 662 of The Side Hustle Show, host Nick Loper welcomes Anthony Koloje, the founder of HnH Vending, who shares his remarkable journey from launching his first vending machine to scaling his business to over $50,000 in monthly revenue within sixteen months. This episode delves into the strategies, challenges, and insights Anthony encountered while building a thriving vending machine empire.
Anthony's Background and Motivation
Timestamp: [01:58]
Anthony Koloje, with a background in real estate dating back to 2009, decided to pivot to the vending machine business to create a more stable, recurring income stream for his family. Motivated by the desire to teach his young children (aged 3 and 5 at the time) entrepreneurship and work ethic, Anthony sought a business that required consistent effort but offered passive income potential.
"I really want to do something for the kids and teach them entrepreneurship and work ethic." – Anthony Koloje [01:58]
Discovering the Vending Machine Business
Timestamp: [02:50]
Anthony discovered the vending machine industry through Mike Hoffman’s VendingPreneur community on Twitter. After joining the community in September, he immersed himself in learning about vending operations and quickly decided to commit fully to the venture.
"Once you sell a house or flip a house, it's like, okay, gotta do it all over again." – Anthony Koloje [01:58]
Starting the Vending Business
Timestamp: [03:42]
Within fifteen months, Anthony's business soared to over $65,000 in monthly revenue, with projections to exceed $75,000 by April due to the installation of new machines in additional locations. His approach focused on scaling strategically by stacking locations and machines rather than merely increasing the number of machines.
Choosing the Right Locations
Timestamp: [04:21]
Anthony emphasizes the critical importance of location selection in the vending business, drawing parallels to real estate principles. He advises fellow entrepreneurs to be patient and selective, waiting for high-traffic, suitable locations rather than hastily placing machines in suboptimal spots.
"Don't just do your... Don't use your spring training or training camp and like football on a location that is not going to be the best." – Anthony Koloje [04:21]
Key Considerations:
- Foot Traffic: Ensuring a high volume of potential customers.
- Building Type: Preference for single buildings with direct access to vending machines.
- Employee Density: For office or manufacturing buildings, a minimum number of employees is essential.
Negotiating Placements and Revenue Sharing
Timestamp: [12:55]
Anthony discusses his unique approach to negotiating with property managers. Instead of standard vending, he pitches AI-powered smart markets offering both snacks and essential items like Tylenol and paper towels. This value-added proposition differentiates his machines from traditional providers.
"I offer a rev share agreement that starts after six months. If you refer me to over three other sister properties, I expedite the rev share for you." – Anthony Koloje [36:35]
Revenue Sharing Model:
- Typically 3-5% of gross sales.
- Presented as a partnership, ensuring property managers feel they receive value without bearing operational burdens.
Financials: Cost of Goods and Machine Investments
Timestamp: [06:04]
Anthony breaks down his cost of goods sold (COGS), aiming for around 35-43%. He highlights the importance of maintaining healthy profit margins by carefully selecting products and negotiating bulk purchasing with distributors.
"Sell something for a dollar, that means you bought it for 30 cents." – Anthony Koloje [06:43]
Machine Costs:
- Refurbished Machines: Approximately $5,000 each.
- Micro Markets: Around $8,000 to $12,000, including advanced features like digital advertising boards.
- AI Smart Machines: Approximately $8,000 with inventory management capabilities.
Leveraging Technology and Advanced Machines
Timestamp: [07:14]
Investing in modern, AI-powered vending machines has been a game-changer for Anthony. These machines not only offer a wider range of products but also provide real-time sales data, inventory tracking, and the potential for additional revenue streams through digital advertising.
"These new machines are blown away by property managers because they offer something they haven't seen before." – Anthony Koloje [26:24]
Scaling the Business
Timestamp: [29:33]
To manage rapid growth, Anthony utilized financing options to acquire more machines without depleting cash reserves. By financing machines at around $160-$175 per month, he maintained positive cash flow while reinvesting profits into further expansion.
"I have to explain, like, I had a net payment of $750-$800 and break even in less than a year." – Anthony Koloje [28:28]
Expansion Strategies:
- Buying Existing Routes: Transitioned a route in downtown Chicago by purchasing it from a community member.
- Leveraging Referrals: Turned one location lead into three by incentivizing property managers to refer other buildings.
Overcoming Challenges and Operational Efficiency
Timestamp: [39:01]
As the business grew, Anthony faced logistical challenges, such as managing multiple machine types and ensuring consistent inventory. Hiring dedicated staff became essential to maintain operations and focus on business development.
"I started interviewing people based on the best quality candidates instead of worrying about their vehicles." – Anthony Koloje [41:35]
Operational Tips:
- Warehouse Management: Secured a storage unit with a loading dock to facilitate bulk inventory deliveries.
- Reliable Staffing: Invested in hiring reliable stockers to handle restocking, allowing him to focus on scaling.
Customer Relations and Sales Strategies
Timestamp: [44:19]
Anthony highlights the importance of building strong relationships with property managers through excellent customer service and responsive communication. By quickly addressing their needs and exceeding expectations, he ensures long-term partnerships.
"I set up the expectation that the machine will be stocked on a specific day, so they know when to expect refills." – Anthony Koloje [18:21]
Sales Strategies:
- Value Addition: Offering unique products and smart technologies that competitors lack.
- Follow-Up: Consistent and value-driven follow-ups to keep leads warm and engaged.
- Incentivizing Referrals: Providing revenue-sharing agreements to encourage property managers to refer additional locations.
Lessons Learned and Key Takeaways
Timestamp: [51:38]
Anthony shares crucial lessons from his vending business journey:
- Location is Paramount: Just like in real estate, foot traffic is the lifeline of vending machine profitability.
- Sales Pipeline Management: Building and maintaining a robust sales pipeline is essential, given that property managers have numerous priorities.
- Revenue Sharing: Offering modest revenue shares can incentivize property managers to partner without feeling burdened.
- Hiring and Delegation: As the business grows, delegating operational tasks becomes necessary to focus on strategic growth.
- Persistence: Overcoming objections and maintaining consistent follow-ups are key components of successful sales.
Notable Quote: "Location, location, location. Same thing here with vending. But it's foot traffic. Foot traffic, foot traffic." – Anthony Koloje [49:26]
Future Plans and Aspirations
Timestamp: [49:22]
Looking ahead, Anthony aims to increase his monthly revenue to $100,000 and potentially scale up to $200,000 or even $400,000 per month. He envisions leveraging his established operations to explore additional revenue streams, such as digital advertising through his smart machines.
"If you push through the adversity, you will be successful." – Anthony Koloje [51:38]
Conclusion
Anthony Koloje’s journey with HnH Vending exemplifies the potential of side hustles to evolve into substantial income-generating businesses with the right strategies and perseverance. His emphasis on strategic location selection, modern technology adoption, effective sales strategies, and operational efficiency provides a blueprint for aspiring entrepreneurs looking to enter the vending machine industry or similar ventures.
For more insights and detailed strategies, listeners are encouraged to visit HnHVending.com and explore the resources shared by Anthony and the VendingPreneur community.
Key Takeaways:
- Strategic Location Selection: Prioritize high foot traffic areas and thoroughly qualify location potential.
- Adopt Modern Technology: Invest in AI-powered and smart vending machines to differentiate from competitors.
- Effective Sales Strategies: Build strong relationships with property managers through value addition and consistent follow-ups.
- Operational Efficiency: Scale by hiring dedicated staff and managing logistics effectively.
- Persistence and Adaptability: Overcome challenges through perseverance and continuous learning.
Notable Quotes:
- "Sell something for a dollar, that means you bought it for 30 cents." – Anthony Koloje [06:43]
- "Location, location, location. Same thing here with vending. But it's foot traffic. Foot traffic, foot traffic." – Anthony Koloje [49:26]
- "If you push through the adversity, you will be successful." – Anthony Koloje [51:38]
Relevant Links:
- HnH Vending: hnhvending.com
- VendingPreneur Community: Connect with Mike Hoffman and access vending resources.
This episode serves as an inspiring case study for anyone interested in building a successful vending machine business or scaling a side hustle into a significant revenue stream. Anthony’s practical advice and real-world experiences offer valuable lessons on entrepreneurship, strategic growth, and operational excellence.