He ‘Accidentally Discovered’ a Semi-Passive Side Hustle in College — Now He’s on Track to Make More Than $500,000 This Year When a lack of funding put a stop to Zach Downey’s pizza vending machines, he stumbled upon another lucrative idea.

This Side Hustle Spotlight Q&A features Zach Downey, owner and CEO at 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 you started your side hustle, and why were you interested in entrepreneurship?

While I started vending machines freshman year of college, entrepreneurship has been a journey I’ve been on for what seems like my whole life. One of my first business experiences was going door-to-door with a power washer and 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 on the last, leading me to where I am today: cotton candy vending machines.

Related: I Turned My Side Hustle Into a Passive Income Stream That’s Earned More Than $1 Million — But Making Money Isn’t Even the Best Part

When did you start your side hustle, and where did you find the inspiration for it?

This particular business didn’t start the way it was supposed to, and I only pivoted to it out of a lack of options. Originally, my goal was to add a pizza vending machine to the James Madison University campus. The idea was approved and the space was built out for it, but we lacked funding to get the machines UL-certified (meaning the product or service meets local and federal environmental and safety regulations). Surfing the web for solutions to our UL problem, I accidentally discovered the world of cotton candy vending machines. I realized the market hadn’t developed at all, so I started reaching out to businesses to test if there was demand — and there was.

Did anything go wrong in the side hustle’s early days? How did you fix it?

I started out with two machines inside a resort, and then 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 we didn’t lose the resort’s business. It was a stressful period, but I learned a lot.

How long did it take you to see consistent monthly revenue? And how much did the side hustle earn?

Having our machines in such a high-traffic location, we started seeing revenue within 10 minutes of setting up our first machine. It’s a weird feeling, to see an idea come to life and the numbers on the screen. On our first weekend, we did over $800 in revenue with just one machine.

Related: Getting Laid Off Allowed Him to Focus on His Sentimental Side Hustle. Now He’s on Track to Earn 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 bring in now?

As you can imagine, our monthly revenue is cyclical, with a larger percentage of revenue occurring during summer. On a good month in the summer, one machine can make anywhere from $6,000 to $15,000 in revenue. You get 10 machines, and you’re bringing in $100,000 a month — the key is getting a good location. In 2024, we’re on track to do $500,000 in revenue. Right now, we own and operate 10 machines with plans to add 25-50 in the next year. As we expand, we’re focusing on locations that allow the opportunity to place multiple units.

How passive is the business now? Do you have employees to help with machine maintenance?

Cotton candy vending machines are not as passive as regular vending machines — and it’s by a long shot. You need an employee to clean out the bowl and burner cover after about 100-150 uses. The employee will also need to restock the supplies after 300 uses. The biggest issue we’ve run into is failed dispenses, which does happen from time to time. For example, I just fixed a machine we have in Texas that had a humidity problem. The built-in humidifier wasn’t doing a good enough job, so when the machine produced the cotton candy floss, it wasn’t sticking to the paper stick. We increased the machine’s base humidity and solved the problem — but be prepared to deal with issues like this on a weekly basis.

Technically, we don’t have any employees and classify all of our workers as independent contractors, which saves us money on payroll taxes. Usually, we employ a different independent contractor for each location unless we have a high concentration of machines in one area.

Related: He Started a Side Hustle in His Parents’ Basement and Won Big on Richard Branson’s TV Show. The Business Saw Over $650 Million in Annual Revenue Last Year.

What’s your advice for others hoping to start a successful side hustle of their own?

As a startup, you need to be fast. Too many people wait until the stars align, until the seas part — but by the time this happens, it’s usually too late. Everything you do needs to be fast and needed to be done yesterday. Startups live and die by how fast they learn and implement those changes.