7 replies to this topic

[danl]

I currently have about 30 full size soda and snack machines. My average monthly gross revenue from each machine ranges anywhere from $30 to nearly $600. In other words, it's all over the map. For the past few months I've been actively engaged in relocating the low income producers as an alternative to buying more machines. So far the results of the relocations have been good. The overall monthly average for each machine is now about $20 higher than when I first started relocating them 2 months ago. That translates to about $600 more total monthly gross revenue overall. What I'd like to know is what kind of gross monthly income per machine (i.e. Soda and Snack) would you consider to be acceptable in this business. Define acceptable as "is enough revenue that you wouldn't consider relocating the machine any time soon."

Dan

[BVI]

I just messed up the poll. I thought it was weekly instead of monthly. So, let me explain what I expect.

Regardless of whether it is a soda or snack machine, I want $100 per week per unit. I know I will get it from some and not from others. If it is a new machine and I'm getting less than $100 per week, I will pull the machine and replace it with a 3rd party (for soda). I also do that if the snack machine is averaging less than $100 (replace the generic soda with 3rd party) so as to help offset the total machine liability I have on the account.

It really just has to do with the debt to income on the account. I am willing to take a lower level of revenue if I have very little equipment cost against the account, and if margins are decent on the sales I do get.

[danl]

BVI, thanks for the explanation. Looks like my thinking is not so different than yours and judging from the few responses to the poll so far, I'd say I'm in the ball park for what to expect from soda and snack machines.

[coinvestor]

I agree with BVI, but I figure it a little differently. I shoot for 10% of investment in monthly sales. So for every $1000 I spend on equipment I should get $100 in monthly sales. This helps me decide what machines, and how much I can spend. If I figure the location will do $400 a month (my minimum to stop) then I can spend $4000 on equipment. You can see that if this location needs a drink and snack machine then I would need refurbs to stay in the ballpark.

This may be different from what is the minimum amount of $ to warrent a stop, to me I don't want to pull off the road for less then $100 a week.

JD

[BVI]

I agree with BVI, but I figure it a little differently. I shoot for 10% of investment in monthly sales. So for every $1000 I spend on equipment I should get $100 in monthly sales. This helps me decide what machines, and how much I can spend. If I figure the location will do $400 a month (my minimum to stop) then I can spend $4000 on equipment. You can see that if this location needs a drink and snack machine then I would need refurbs to stay in the ballpark.

This may be different from what is the minimum amount of $ to warrent a stop, to me I don't want to pull off the road for less then $100 a week.

JD

Jeremiah, I really like the way you figure this. It's a very precise way to know just how much to spend on an account. As with any method, you have to get really good at predicting how well the account will do before you buy the equipment. Given that, this is the best way to know how much to spend on an account I have seen.

[BVI]

Using this formula, I figured that I over-spent on my biggest account by $4,000. However, I make it up on other accounts where I have underspent, and the use of 3rd party machines really helped out with this.

[coinvestor]

Using this formula, I figured that I over-spent on my biggest account by $4,000. However, I make it up on other accounts where I have underspent, and the use of 3rd party machines really helped out with this.

The number will be squewed for very small and very big accounts, but its a good quick way to estimate your investment. I have accounts that do better and worse.

I stole the idea from rental property investing. They say you should be able to get 1% of the purchase price of the property in rent monthly, then excelerated it for vending (ie a good property that cost a 100k should be able to rent for 1k a month to earn a decent return).

JD

[BVI]

Using this formula, I figured that I over-spent on my biggest account by $4,000. However, I make it up on other accounts where I have underspent, and the use of 3rd party machines really helped out with this.

Oops... there I go again. I figured this using weekly numbers instead of monthly. This account I'm speaking of averages $800 per week. That's $3200 per month. According to the formula, I would be able to spend $32,000 on equipment. Ouch. You're right about big accounts being skewed a bit. I spent $13,000 on new equipment for this account - which I still feel was way too much money - but at the time I was leery about the reliability of 3rd party machines and reconditioned equipment and didn't want to take any chances with my first large account. Believe me, if I had it to do over again, I would not have spent more than $6,000, including the coffee machine I bought for them in January. Expensive lesson learned.