I am brand new to the vending machine business, and have found this site to be the absolute best source for information available!!

In reading the post on tracking profits it seems to me that many people over think this and/or make it too complicated.

some people even subtract the amount of gas they use to service their route. I don't think anyone subtracts the amount of gas they use driving back and forth to their day job from their salary,

It is simple economics.

Lets say you have $1200.00 what can you do wit it:

1) put it under your mattress = 0 ROI
2) Put it in a savings account = 0.09% ROI
3) put it in a mutual fund = Potentially 5% ROI but that fluctuates and you have to be in it for the long haul
4)Buy something you want, but don't need = your money is gone and you have something you eventually will never use and can't sell
5) etc, etc, etc

OR

6) You buy 8 or 10 bulk vending machines = you get a monthly 10% ROI IN CASH, you can grow your business and add more machines. Also, you can always sell the USED machines eventually. Sure, if you put the $1200.00 in a mutual fund your initial investment does not devalue as fast, but their is inflation and the dollar devalues


It is really that simple. sure it is work, but it should be fun to you.


Anyone else want to chime in on this??

of course u have to factor gas, do you not count the cost of the product either?
return on investment is calculated after costs. a job is a job not an investment

do you think I should have a provision in the sale agreement that if I am not able to continue the operation of this route business that I am not liable for the unpaid balance of the seller-financed Note?

sure why not, i doubt u will get it

In short a company we were doing vending for implemented a employee wellness program in conjunction with their group insurance company. It was a pilot program that rewarded the company for implementing a wellness program that would cut down on health insurance claims. Every employee was required to maintain wellness guide lines to continue receiving matching contributions to their health insurance. We originally estimated and loss 42% in gross sales. The company agreed at the start to subsidise the difference to help keep the cost of "healthier" items affordable. We worked directly with the company nutritionist who set the guidelines. Only diet soda,teas,water, juices, milk, energy drinks. Snacks could only be single serving packaging, 10 grms fat or less, only 35% calories from fat, all the fruit, nuts, and protein we want. No restrictions on cold food items. Of course at the start it was shakey without the subsidy we would not have made it. That was 5 years ago and today the program is a success saving the company thousands of dollars. Every year we are graded and get a B+ only because the cold food has no restrictions the average for the country is a C- for the companies on the program. Because of the inventory we had to have we do 30-40% nutritional products in all of our locations and use that as a selling point we can even go higher % if need be. Other than the soda if you check what you are putting in snack machines now 30-40% of your inventory now will meet these requirements.
As of March 19 2012 all of my park and recreation accounts have set the same nutritional guidelines except they only allow 30% calories from fat. They do not subsidise BUT I only have to be 35% compliant by 3/19/12, 50% compliant by 9/12, 75% compliant by 1/13 and 100% compliant 6/13. The good part is no non-compliant product can be sold for less than a compliant product. Which means I'm getting a 300% profit margin on the items that sell. Right now on a 10 select soda we only have to have 4 items compliant we already carry 2 gatorades 20oz and a water 20oz we've added tea 20oz and changed soda back to cans @ 2.75 we get 2.50 for the 20oz bottles pissed the customers off but made client real happy. We will revaluate at each change to see if it is profitable we will probably do a 10-15% price increase at each change to make 100% compliant profitable.
I recommend that you educate yourself on "more nutritional items" and when someone says they want more "healthier" items then you will be ready. People assume that anything in a vending machine is junk food which is far from the truth. Anybody that uses the term "healthier" do not know what they are talking about if you have a nutritional plan that is 30-40% compliant then you will sound like you know what your talking about. The key to this is only 40% of a vending machine is sellable anyway. Example: On a 8 select soda machine only 3 selections are sellable meaning if any 1 of those three selections are out they are calling you to fill the machine. So if you have at least 3 selections compliant (2 diet and a tea) your 40% more nutritional and still have your best 3 sellers. On a 4 wide snack 32 select you will need 12 selections to be compliant. Doritos, Sunchips, double salami, beef& cheese stix, cashews, pistachios,peanuts,sunflower seeds shelled and unshelled, pretzels, cheez-its, 3 musketeers, granola bars, special k bars, snackwells cookies, all 100 calorie pastries, single serving pop tarts, tator -skins tgif, pork skins,trailmixes,animal cookies, the new sunmaid trailmix and apple raisin cookies big seller. etc.etc.etc. I can go on and on there are multiple flavors of all those chips. These are all items that sell I have never lost any of these items because of dates. Set your guidelines study the products educate yourself and when a customer says we need "healthier" items you'll be prepared and you will amaze them with your preparedness. If you already use these items you can say we're already at 40% nutritional or you can say "well you do know that healthier items are more expensive" then raise your prices 20%. Just my thoughts. I hope this helps.
Vend1ng

this is a hall of fame post

very nicely explained

thank you.

By your post it sounds like you have already bought in your mind and you are hoping for someone to validate what you have already convinced yourself of. If its such a great deal why are tey selling a biz op and not just doing it themselves.

No