Lewiston Vending Opportunity

Sam Rattner shares a story about discovering why a vending machine business in rural Lewiston, Idaho was significantly more profitable than others.

"I was looking at vending machine businesses on these buy-sell sites, and there's this rural company in Lewiston, Idaho - not even Boise, like Lewiston, there's nothing there. When I looked at 20 companies, they all did about the same margins, but this company did 3 times the margin. I thought either they're lying or something's going on.

The broker convinced me to visit, so I flew into this remote airport in Lewiston and drove 40 minutes to this warehouse. When we opened it up, it was a full-blown operation. They had hundreds of vending machines they hadn't even deployed yet, stocked with more inventory than you'd think a hospital would have.

I spent all day in the pouring rain driving around Lewiston, and I realized: there's no grocery stores, no convenience stores, no Foxtrot coffee. They rely on vending machines. It's FedEx distribution centers, places where they build turbines for propellers - it's the workers' part of America. During lunch breaks, everyone goes to the vending machines. Warehouses will have 50 of them - snacks, cold food, hot food. Every meal of the working day comes out of vending machines.

That's when I understood why the margins were so high - they weren't just supplemental food options, they were the primary food source for these industrial workers."