How to start and scale a vape vending business
E-cigarettes — also known as disposable vapes — are booming in the United States. The US vape market is over $15 billion, making it the largest in the world, fueled by continuous product innovation and rising consumer demand.
China's manufacturing improvements have pushed wholesale prices on premium vapes (Geek Bar, Raz) as low as $7–$8 per unit, while retail prices sit around $25. After fees, gross profit on a single vape sold through a vending machine is around $12–$15. That's what drew me in — and it's why I treat these machines the same way I treated ATMs and Jukeboxes. Same concept. Better economics.
I formed an LLC called Vape Box, LLC and partnered with VapeTM, the largest distributor of vape vending equipment and domestic software provider. VapeTM informed us that we needed to purchase vapes from a registered Ohio distributor and that we needed an Ohio Transient Vendor's License.
Additionally, we needed to submit traditional sales tax on a monthly basis and understand placement requirements. Most states have rules about where these machines can be placed — but contrary to popular belief, very few states have specific rules concerning age-verification technology. Most states are not that current.
Once our paperwork was buttoned up, we purchased two machines. One was a "training" VTM that I kept in my house (it is still there!). The other we deployed at my Uncle Greg's bar, 1899 in Willoughby, OH. That account generates over $2,500 in profit every single month. Yes, I got lucky — but it's a tiny little dive bar that packs in youngsters and hipsters and sells a lot of booze. Nothing special. The machine did the work.
I got trained on VapeTM software through phone calls and their YouTube training videos and they connected me with a couple of vape wholesalers. There are hundreds of them — all high volume, small margin. That was the easy part.
Sales. Sales is the lifeblood of every business, and without top-line revenue, there is no profit. Most people talk too much about accounting, operations, legal, financial analysis — at the end of the day, focus more time on sales strategy and downright selling. It's a hustle, and the first account is the hardest.
I developed simple marketing material and drove from bar to bar in NE Ohio. I went before or after lunch, found out who the "boss" was, and relentlessly got in touch with them. I also made phone calls to everyone I knew in the industry — my family had operated Jukeboxes at a lot of these places.
The market was virtually untapped. I quickly realized I was sitting on a gold mine. I redirected focus to high-quality accounts — the young bars that sold a lot of alcohol late night and went through cases of High Noon. Some states publish liquor sales by brand — if yours does, go for the High Noon locations.
The main questions bar owners asked revolved around the law, taxes, compliance, licenses, and age verification. I became an expert on Ohio vape vending law. Once those questions came up, the sale was over — I had the right answers. I will say that I couldn't get many words in with a Marlboro Red old-timer. Those guys will come around next year.
The young bars started generating over $1,500 in gross revenue — about 60 transactions, or 2 per day. You heard me — 2 per day. That is the sweet spot because of the high margins.
A vape vending machine is like an ATM — but instead of earning $1.50 in surcharge for fronting $100 in cash, we dispense an $8 vape for $25. VTMs require ~$1,000 in vape inventory versus $10,000 in ATM vault cash. The economics of VTMs dwarf ATMs (and Jukeboxes) — but only at the right locations: bars and clubs that sell a lot of alcohol late night to the 21–40 year old demographic. Don't over-complicate it.
In the vape vending machine business, you can expect substantial profit margins — around $12 to $14 per vape sold, with the potential to sell 2 to 3 vapes per day. A well-placed and optimized machine can generate over $1,000 in monthly profit.
Enter your wholesale cost, retail price, and expected daily sales. The calculator handles the rest.
I treated the first few customers like gold — exceptional service and fast response time. Then I called them and asked for help. I told them the truth: that I was trying to make a living and quit my day job and my wife was going to kill me if I wasn't successful. Literally.
"Do you know any other bar owners that you could put me in touch with?"
Almost every bar owner wasn't looking for $100 or a referral fee. When I asked them for help, it changed the vibe — it disarmed them, and they were happy to help me. But this didn't work right away. Nobody followed up. I needed a new plan.
I asked a bar owner to meet me for coffee. I asked him to take out his cell phone and call a bar-owner friend — on speaker, with me there. Game over. Rinse and repeat.
In 6 months, we placed over 40–50 vape vending machines in NE Ohio. Today, we generate over $50,000 in recurring monthly revenue. After all expenses and merchant commissions, we profit over $20,000 per month. We have one part-time person restocking the machines. It's semi-passive income — I can't call it fully passive because sales was and still is a grind. If someone finds truly passive income, I will be the first to sign up.
What It Takes to Succeed in Vape Vending
With the right approach and determination, it's possible to grow a vape vending route rapidly and profitably. Good luck — feel free to reach out with any questions.