The real measure of a genius is not someone who doesn’t make mistakes, just someone who learns from and avoid other peoples’ mistakes. Let me tell you about one of my mistakes. When I first wanted to get into the vending business I spent about $3000 for a kinetic gumball Machine (I bought 3 actually, so it cost a total of $9000) with all the latest bells and whistles. And these guys looked real sharp.

I had them in malls and bowling alleys; during the “busy” months they would gross about $300 a month. Well, guess how many “busy” months I had; about four (if I was lucky). The “off” months grossed about $150 (at best). After commissions, COGs (Cost of Goods), and other misc expenses I kept about 1.5% (about $40). To make this equation even worse I did not take into account the life of the machine. At that rate I was going I would have to have had the machines on location for over 7 years – just to break even.

A lot can happen to a machine in 7 years: parts break, people bust into them and steal your quarters, you lose locations, etc.

The reason I tell you this story is because after about a year of owning these machine I decided I wanted more machines. Because I could not afford another $9000 I figured I’d go on the Internet to see if maybe I should try to buy used machines. To my amazement I could buy the exact same machines for only $300. Not only were these machines cheaper but most of them were bought brand new, never placed on location, and just sitting to people’s garage’s. One guy even still had them in the original packaging. If I had taken the time to look first, instead of letting a sales pitch cloud my judgment I could have bought over 20 machines for what I spent on just one.