This Side Hustle Spotlight Q&A features Zach Downey, owner and CEO of Distinctive Vending, which operates cotton candy machines in high-traffic locations such as resorts and amusement parks.
Image credit: Courtesy of Distinctive Vending. Zach Downey.
What were you doing before starting your side hustle and why were you interested in entrepreneurship?
Even though I started selling vending machines my freshman year of college, entrepreneurship has been a journey I’ve been on for what feels like my entire life. One of my first entrepreneurial experiences was going door to door with a pressure washer and a window cleaning kit, which evolved into selling mini gun models (it failed and I have 200 units of mini guns in my apartment) . Each business iteration was an improvement over the last, bringing me to where I am today: cotton candy vending machines.
Related: I Turned My Side Business Into a Passive Income Stream That Made Over $1 Million, But Making Money Isn’t Even the Best Part
When did you start your side business and where did you find the inspiration for it?
This particular business didn’t start out the way it should have and I only turned to it due to lack of options. Initially, my goal was to add a pizza vending machine to the James Madison University campus. The idea was approved and the space was created to make it happen, but we lacked the funds to get the machines UL certified (which means the product or service meets local and federal environmental and safety regulations). Browsing the web looking for solutions to our UL problem, I accidentally discovered the world of cotton candy vending machines. I realized that the market hadn’t developed at all, so I started contacting companies to see if there was demand – and there was.
Did something go wrong in the early days of the side hustle? How did you solve the problem?
I started with two machines inside a resort and two months later both machines stopped working at the same time. I remember driving from Virginia to Texas in one stretch just to make sure I didn’t miss the resort activity. It was a stressful time, but I learned a lot.
How long did it take you to see consistent monthly revenue? And how much did the second hustle earn?
By having our machines in such a busy location, we started seeing revenue within 10 minutes of setting up our first machine. It’s a strange feeling to see an idea come to life and the numbers on the screen. In our first weekend, we made over $800 in revenue with just one machine.
Related: Getting fired allowed him to focus on his romantic side. Now he’s on track to make over $700,000 in 2024.
You’ve turned your side hustle into a full-time business. How much average monthly or annual revenue does it generate now?
As you might imagine, our monthly revenue is cyclical, with a larger percentage of revenue occurring during the summer. In a good summer month, a car can generate between $6,000 and $15,000 in revenue. Get 10 cars and make $100,000 a month – the key is to find a good position. In 2024, we are on track to reach $500,000 in revenue. We currently own and operate 10 machines with plans to add 25-50 in the next year. As we expand, we focus on locations that offer the opportunity to place more units.
How passive is the business now? Do you have employees who help maintain the machines?
Cotton candy vending machines are not as passive as regular vending machines – and this is by far the case. An employee will need to clean the bowl and burner lid after approximately 100 to 150 uses. The employee will also need to replenish supplies after 300 uses. The biggest issue we’ve encountered is failed disbursements, which happen from time to time. For example, I just repaired a car we have in Texas that had a moisture problem. The built-in humidifier didn’t work well enough, so when the machine made cotton candy, it didn’t stick to the paper stick. We increased the machine’s base humidity and fixed the issue, but be prepared to deal with issues like this on a weekly basis.
We technically have no employees and classify all of our workers as independent contractors, which saves us money on payroll taxes. We typically use a different independent contractor for each location unless we have a high concentration of machines in one area.
Related: He started a side business in his parents’ basement and won big on Richard Branson’s TV show. The company had annual revenue of more than $650 million last year.
What is your advice to others hoping to start their own successful business?
As a startup, you have to be fast. Too many people wait for the stars to align, for the seas to part, but when that happens, it’s usually too late. Everything you do has to be quick and should have been done yesterday. Startups live and die by how quickly they learn and implement those changes.