Ok, I've got a few questions for everyone. First off, how many of you carry Liability Insurance? Do you have your companies incorporated? Pay income taxes on your profits?
I ask this because I just don't see much profitability in Bulk vending.
example- Rob has in his blog that he checked one location after 30 days or so and it had $35.00 in it.
Gross- $35.00=140 vends @ .25
Product Cost @ .05/vend = $7.00
Commission @ 30% on net = $8.40
Charity Contribution @ 5% = $1.40
Income Tax + or - $10.64
=$7.56 net
This doesn't include the following:
+ Locator fees
+ equipment costs
+ fuel / vehicle costs
+ insurance
+ city vending fees
+ your time
Am I missing something here? Please tell me how this is profitable large or small scale.
Thanks for your time.
Profitability
Started by ToddMiller, Jul 19 2007 01:04 PM
23 replies to this topic
#2
westlakevending
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Posted 19 July 2007 - 06:27 PM
The profit comes into play because first of all whoever is donating to a charity and paying commission is crazy. Second your charity and all expenses are a write off therefore, makes things a little better on this location. 35.00 - 1.00 to charity - 7.00 product cost = 27.00 * 100 locations = $2700 per month
Ok, I've got a few questions for everyone. First off, how many of you carry Liability Insurance? Do you have your companies incorporated? Pay income taxes on your profits?
I ask this because I just don't see much profitability in Bulk vending.
example- Rob has in his blog that he checked one location after 30 days or so and it had $35.00 in it.
Gross- $35.00=140 vends @ .25
Product Cost @ .05/vend = $7.00
Commission @ 30% on net = $8.40
Charity Contribution @ 5% = $1.40
Income Tax + or - $10.64
=$7.56 net
This doesn't include the following:
+ Locator fees
+ equipment costs
+ fuel / vehicle costs
+ insurance
+ city vending fees
+ your time
Am I missing something here? Please tell me how this is profitable large or small scale.
Thanks for your time.
#3
caserri
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Posted 19 July 2007 - 06:42 PM
Good to see you back westlake. Where you been?
#4
ToddMiller
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Posted 20 July 2007 - 09:25 AM
Westlake,
You honestly think that you are netting $27 on those figures? You have overhead don't you?
I beginning to think the vast majority here are not running legitiment businesses. No offence meant, just an overall observation. i hope they never have a liabel suit filed and are financially ruined for life because they don't think they need insurance or don't have their "company" incorporated.
If you want to be in business, do it right.
You honestly think that you are netting $27 on those figures? You have overhead don't you?
I beginning to think the vast majority here are not running legitiment businesses. No offence meant, just an overall observation. i hope they never have a liabel suit filed and are financially ruined for life because they don't think they need insurance or don't have their "company" incorporated.
If you want to be in business, do it right.
#5
caserri
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Posted 20 July 2007 - 09:49 AM
Todd,
The majority of the operators here are probably just beginning their journey into the bulk vending business. Many mistakes will be made however they do come here seeking advice. You and I are in agreement as far as legitimizing your company and protecting it from liability. You have a valid point that I have tried to convey on here many times, however you are way off base with your remarks about the profitability of this business. It is easy to think that a few quarters wont amount to much or even cover costs involved but nothing could be further from the truth. Without going into the details of my financials, I will say that I have made my business more than just profitable. I have gained freedom and independence from the 9 to 5 rat race. That is worth something to me but you place a deficit on it in your post above like its an expense. As for your other figures, my product costs are about as low as I can get them and I accomplish that through sheer volume purchasing. I pay no where near 5% to my charity, (although they do quite well by me), I pay $0 commission. And I dont know where you are coming up with that income tax figure. If I paid $10 for every $35 gross I made, I would not stay in business. With all the deductions I am granted in this business my yearly tax burden is insignificant.
No one here is trying to talk you into becoming a bulk vendor. You came here looking for answers so why are you making individuals here feel like they are screwing up their lives. Why not add something constructive. You seem to have a certian amount of knowledge about general liability, why dont you share it and try to help others who would like to do the right thing but dont know where to start.
The majority of the operators here are probably just beginning their journey into the bulk vending business. Many mistakes will be made however they do come here seeking advice. You and I are in agreement as far as legitimizing your company and protecting it from liability. You have a valid point that I have tried to convey on here many times, however you are way off base with your remarks about the profitability of this business. It is easy to think that a few quarters wont amount to much or even cover costs involved but nothing could be further from the truth. Without going into the details of my financials, I will say that I have made my business more than just profitable. I have gained freedom and independence from the 9 to 5 rat race. That is worth something to me but you place a deficit on it in your post above like its an expense. As for your other figures, my product costs are about as low as I can get them and I accomplish that through sheer volume purchasing. I pay no where near 5% to my charity, (although they do quite well by me), I pay $0 commission. And I dont know where you are coming up with that income tax figure. If I paid $10 for every $35 gross I made, I would not stay in business. With all the deductions I am granted in this business my yearly tax burden is insignificant.
No one here is trying to talk you into becoming a bulk vendor. You came here looking for answers so why are you making individuals here feel like they are screwing up their lives. Why not add something constructive. You seem to have a certian amount of knowledge about general liability, why dont you share it and try to help others who would like to do the right thing but dont know where to start.
#6
ToddMiller
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Posted 20 July 2007 - 10:31 AM
Casseri,
Don't get me wrong I'm not tring to be negative here. I'm just trying to find the potential profit in this business. If someone thinks that the only expenses they have are product and charity contributions they are sadly mistaken.
I agree with you on the tax deductions and deprection on equipment. However as stated being self-empoloyed you are at a higher tax bracket due to the self employment tax, additional 10%. Part of being in business.
The figures I used for reference are from Rob's blog. I added the tax as a round about figure before any deductions. they include potential sales tax, income tax, usage tax, etc. These will vary in differnt locals.
If by my mentioning the potential liabiltities of oprating without insurance is making people think they are screwing up their lives.... Well...... they are. Plain and simple they are playing with fire in this "sue" happy world we live in. All it takes is a choking incident, pulling the machine over on top of a small child or just getting sick on the candy. And your financial future is done...
I came on here to see how others perceive the potential profitability in bulk vending. As stated when I put the pencil on it I don't come up with much. Show me I'm wrong.
I can appreciate the enthusiam shown on this site. However, I don't care for businesses being run under the radar. bad for business... bad for the industry....potentially bad for the operator...
Don't get me wrong I'm not tring to be negative here. I'm just trying to find the potential profit in this business. If someone thinks that the only expenses they have are product and charity contributions they are sadly mistaken.
I agree with you on the tax deductions and deprection on equipment. However as stated being self-empoloyed you are at a higher tax bracket due to the self employment tax, additional 10%. Part of being in business.
The figures I used for reference are from Rob's blog. I added the tax as a round about figure before any deductions. they include potential sales tax, income tax, usage tax, etc. These will vary in differnt locals.
You came here looking for answers so why are you making individuals here feel like they are screwing up their lives. Why not add something constructive. You seem to have a certian amount of knowledge about general liability, why dont you share it and try to help others who would like to do the right thing but dont know where to start.
If by my mentioning the potential liabiltities of oprating without insurance is making people think they are screwing up their lives.... Well...... they are. Plain and simple they are playing with fire in this "sue" happy world we live in. All it takes is a choking incident, pulling the machine over on top of a small child or just getting sick on the candy. And your financial future is done...
I came on here to see how others perceive the potential profitability in bulk vending. As stated when I put the pencil on it I don't come up with much. Show me I'm wrong.
I can appreciate the enthusiam shown on this site. However, I don't care for businesses being run under the radar. bad for business... bad for the industry....potentially bad for the operator...
#7
caserri
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Posted 20 July 2007 - 01:08 PM
I agree with you on the tax deductions and deprection on equipment. However as stated being self-empoloyed you are at a higher tax bracket due to the self employment tax, additional 10%. Part of being in business.
Maybe I'm not paying my tax man enough! As stated earlier, my tax liability is insignificant. I spend more on doughnuts and coffee each year than I do on taxes.
If by my mentioning the potential liabiltities of oprating without insurance is making people think they are screwing up their lives.... Well...... they are. Plain and simple they are playing with fire in this "sue" happy world we live in. All it takes is a choking incident, pulling the machine over on top of a small child or just getting sick on the candy. And your financial future is done...
Like I said, valid point, I agree. Now lets leave that horse alone. Its dead.
I came on here to see how others perceive the potential profitability in bulk vending. As stated when I put the pencil on it I don't come up with much. Show me I'm wrong.
I already told you how I do it. I'm not sure how you can't see potential profit in selling products for 5 times the cost. Its as simple as that. Do you think WalMart is selling all of their products for 5 times what they paid? No, absolutley not. When I was in retail, the going markup was double cost. Except of course for electronics, jewelry and such. Every business has overhead. Your markup has to include that and enough for a comfortable profit margin. Since most of these machines take quarters, you have very little control over what you charge. Vendors offset that by closely controlling their costs. But when you are marking up at least 5 times cost, (Gum is more), there is plenty of room for profit AND overhead.
#8
ToddMiller
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Posted 20 July 2007 - 01:26 PM
Maybe I'm not paying my tax man enough! As stated earlier, my tax liability is insignificant. I spend more on doughnuts and coffee each year than I do on taxes
Are you relying on only your deductions for your company to show a "profit"? OK, sounds like a real profitable industry....
I already told you how I do it. I'm not sure how you can't see potential profit in selling products for 5 times the cost. Its as simple as that
Whoa there calm down. When I add up all the TRUE over head costs involved as stated above, I come up with a minimal if not negative profit margin.
Your right dead horse!!
#9
westlakevending
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Posted 20 July 2007 - 06:03 PM
Dear Tood,
Many vendors are new like myself on here seeking advise. I think you need a lesson on math....................100 locations * 20.00 each location is 2,000 per month cash. Now, yes there is overhead such as machines, gasoline, ect.... but do the math again......this time concentrate on these figures, thats 24,000 per year and on average each setup costs 123 with product in it. now if each setup makes 20.00 it was pay itsself off in about 6 months. After the machine is paid off you spend very little in overhead. With your negativity i dont think you will ever succeed in business. With 200 locations that 48,000 per year........Its a numbers game man........look at numbers.
Many vendors are new like myself on here seeking advise. I think you need a lesson on math....................100 locations * 20.00 each location is 2,000 per month cash. Now, yes there is overhead such as machines, gasoline, ect.... but do the math again......this time concentrate on these figures, thats 24,000 per year and on average each setup costs 123 with product in it. now if each setup makes 20.00 it was pay itsself off in about 6 months. After the machine is paid off you spend very little in overhead. With your negativity i dont think you will ever succeed in business. With 200 locations that 48,000 per year........Its a numbers game man........look at numbers.
Maybe I'm not paying my tax man enough! As stated earlier, my tax liability is insignificant. I spend more on doughnuts and coffee each year than I do on taxes
Are you relying on only your deductions for your company to show a "profit"? OK, sounds like a real profitable industry....I already told you how I do it. I'm not sure how you can't see potential profit in selling products for 5 times the cost. Its as simple as that
Whoa there calm down. When I add up all the TRUE over head costs involved as stated above, I come up with a minimal if not negative profit margin.
Your right dead horse!!
#10
ToddMiller
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Posted 20 July 2007 - 08:41 PM
No negativity here westlake. Just REALITY! I don't think anyone on here knows what a true cost of doing business is!
Guys it's no skin of my back, I could care less about if you make it or not.
I asked to show the profitability of this business, I've been shown nothing but under the table BS so far. If you think your making a profit by operating without insurance, without considering a TRUE cost of doing business. So be it!
Your right westlake, if this is the way the industry is I won't make it. Because I won't waste my time looking over my shoulder all the time.
Good Luck to you all. I hope you make a go of it. Just do yourself a favor and get some insurance.....
Guys it's no skin of my back, I could care less about if you make it or not.
I asked to show the profitability of this business, I've been shown nothing but under the table BS so far. If you think your making a profit by operating without insurance, without considering a TRUE cost of doing business. So be it!
Your right westlake, if this is the way the industry is I won't make it. Because I won't waste my time looking over my shoulder all the time.
Good Luck to you all. I hope you make a go of it. Just do yourself a favor and get some insurance.....
#11
pusherman
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Posted 20 July 2007 - 09:10 PM
you've got everything figured out already
#12
pusherman
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Posted 20 July 2007 - 09:18 PM
you know nothing about the way people on this board run their businesses and you shouldnt come on here accusing people of things you know nothing about. no one is going to post their financials on a public board just to prove to some know it all prick that there is money to be made in bulk vending. dont expect much help when you accuse people of running shady businesses.
#13
westlakevending
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Posted 20 July 2007 - 11:14 PM
VENDORS STICK TOGETHER.
you know nothing about the way people on this board run their businesses and you shouldnt come on here accusing people of things you know nothing about. no one is going to post their financials on a public board just to prove to some know it all prick that there is money to be made in bulk vending. dont expect much help when you accuse people of running shady businesses.
#14
coinvestor
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Posted 21 July 2007 - 06:13 AM
Todd,
I don't see how you can say that bulk vending has a negative profit margin. I don't think that anyone here that is living off the business would be paying out of pocket to keep the business up. I don't do bulk, I do drink and snack and I'm considering adding some bulk. I like bulk because of the minimal investment and HIGH profit margins. Yes, with drink and snack I have even smaller profit margins with even greater equipment cost.
"Are you relying on only your deductions for your company to show a "profit"? OK, sounds like a real profitable industry...."
Relying on it... No, but I don't need to tell you that the greatest tax advantages go to businesses. Maybe we are not underestimating the cost of doing business and you are underestimating the benefits of doing business.
I hope you find success and a venture that fits your needs.
Jeremiah
FYI... I literally just finished paying my Q2 sales tax for my limited liability company and my annual premium for my multi million-dollar liability policy about 10 minutes ago.
I don't see how you can say that bulk vending has a negative profit margin. I don't think that anyone here that is living off the business would be paying out of pocket to keep the business up. I don't do bulk, I do drink and snack and I'm considering adding some bulk. I like bulk because of the minimal investment and HIGH profit margins. Yes, with drink and snack I have even smaller profit margins with even greater equipment cost.
"Are you relying on only your deductions for your company to show a "profit"? OK, sounds like a real profitable industry...."
Relying on it... No, but I don't need to tell you that the greatest tax advantages go to businesses. Maybe we are not underestimating the cost of doing business and you are underestimating the benefits of doing business.
I hope you find success and a venture that fits your needs.
Jeremiah
FYI... I literally just finished paying my Q2 sales tax for my limited liability company and my annual premium for my multi million-dollar liability policy about 10 minutes ago.
#15
caserri
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Posted 21 July 2007 - 09:29 AM
Ok, you are right Todd. This is my last post to you since there is nothing anyone can say that will make you even consider that you are mistaken...
There is no money in this business! You got us! You called us all out! We are all just spinning our wheels here and throwing our good money into a bad, unprofitable business. Is that what you want to hear? There it is.
If you are interested, visit the NBVA website at www.nbva.org for profitability figures.
Good day to you sir.
There is no money in this business! You got us! You called us all out! We are all just spinning our wheels here and throwing our good money into a bad, unprofitable business. Is that what you want to hear? There it is.
If you are interested, visit the NBVA website at www.nbva.org for profitability figures.
Good day to you sir.
#16
ToddMiller
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Posted 21 July 2007 - 12:19 PM
You guys are right I don't know any thing. You know everything. LOL. Whatever guys. Good Luck to you...
#17
candyman007
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Posted 21 July 2007 - 07:01 PM
You guys are right I don't know any thing. You know everything. LOL. Whatever guys. Good Luck to you...
I'll run though my expenses for a single machine averaging $20 a month. Candy on average costs 5 cents per vends.
GROSS $20
-Candy $4
-10% of gross to charity $2
NET: $14
35% tax bracket (highest tax bracket possible)
14 X .35 = $4.9
NET $14
- TAX $9.1
That obviously doesn't include fixed costs for a machine. Those are only my variable costs.
1 machine = $9.1 X 12 Months
= $109.2 PER YEAR
Cost of a double head machine = $95 After 1 year you have already covered your initial investment. What other business opportunity can you do this with? Granted I didn't include insurance but you are talking $500 a year maybe for 100 machines.
Rob
http://candyman007.blogspot.com
#18
caserri
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Posted 21 July 2007 - 07:20 PM
Dont waste your time Rob, He'll never get it.
#19
ToddMiller
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Posted 21 July 2007 - 08:52 PM
Casseri,
Oh, I get it all right!! Your attitude speaks volumes. i thought you were done here?
Rob, thanks for your response. You may however want to find a new group of advisors. this bunch is going no where fast. Good luck to you...
Oh, I get it all right!! Your attitude speaks volumes. i thought you were done here?
Rob, thanks for your response. You may however want to find a new group of advisors. this bunch is going no where fast. Good luck to you...
#20
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Posted 22 July 2007 - 03:24 AM
I agree. It's all about the numbers. If you re-invest your profits and place 500 machines on location within a year's time, for example, and if you net $25 per machine monthly, that's $12,500!
#21
caserri
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Posted 22 July 2007 - 07:11 AM
Casseri,
Oh, I get it all right!! Your attitude speaks volumes. i thought you were done here?
Rob,
Please let Todd know that if he actually took the time to read my posts he would have seen that I have made my last post to him. I am in no way "done here"
#22
candyman007
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Posted 24 July 2007 - 06:49 AM
Rob,
Please let Todd know that if he actually took the time to read my posts he would have seen that I have made my last post to him. I am in no way "done here"
Some people like to spout negativity because they don't think something is possible. I believe that everything is possible. You will not have an enjoyable life if you do not try new things, take risks, and believe in yourself. If I listened to every person that told me I couldn't do something I would have never accomplished anything.
Robert N. Patterson II
#23
25Cents
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Posted 24 July 2007 - 11:01 PM
What? There's no money in this business? 
Guess I will have to stop taking all these bags of Quarters to the bank. 
Guess I will have to stop taking all these bags of Quarters to the bank.
#24
candyman007
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Posted 25 July 2007 - 08:26 PM
What? There's no money in this business?
Haha, nice post. I think I dropped off about 15 pounds of quarters today at the bank. I'm not quite sure, anyone know what a quarter ways? 25cent, nice name.
Rob
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http://kickstartvending.com/forum/
