I am going into the bulk vending business using just ½ inch gumballs (8,500 ct is what I keep finding). The reason I am going with ½ inch is because the machines I have don't accept 1 inch gumballs.
I figured I would have my machines set to give two ½ inch gumballs per 25 cent vend, which is in essence, like giving one 1 inch gumball per 25 cent vend.
Now for the math:
For the regular 1 inch gumballs (850 ct) you buy it for say, $41 (including shipping, quoted at gumballs.com) and sell each gumball for 25 cents, your profit margins are high and the formula is as follows:
850 gumballs X .25 cents per gumball = $212.50 - $41 product cost = 171.50 per case initial (before taxes) profit.
With that in mind, I attempt to figure out the total profit per case with my 8500 ct ½ inch gumballs:
keep in mind the cost per case is $51 as quoted by gumballs.com... Each case of 8500 ct gumballs is 23 lbs.
seeing how I am going to vend [2] half inch gumballs per vend, I divide the initial 8500 by 2 and then multiply by .25:
8500 ct gumballs / 2 = 4250 gumballs
4250 gumballs X .25 cents per vend = $1,062.5 - $51 product cost per case = $1,011.5 profit per case before taxes
If I have 60 machines and each machine holds approx 12 lbs of product then do I really get my money's worth on this or will the cost per case be too much to bear??
12 lbs of product per machine X 60 machines = 720 lbs total...
720 lbs / 23 lbs per case = 31.30 cases (round up to 32 cases)
32 cases X $51 per case (with quantity discount) = $1,632 cost for product for all my machines
Here's the part that I am questioning, so please correct me if I am wrong:
If I get $1,011.5 profit before taxes per case, then how can I get this number?:
$1,011.5 X 60 = $60,690 from all my gumball sales?!?!
Surely I must be miscalculating somewhere! Because the most each of my machines can hold money wise is $60 each, which if I multiplied by 60 machines would only give me $3,600.
SOMETHING IS NOT ADDING UP!!!
PLEASE HELP!!
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In Topic: Am I doing my cost calculations wrong?!?!
01 March 2008 - 11:53 AM
You miscalculated a couple of things. First, each machine holds 12 lbs, each case has 23 lbs. So, a better way to figure this is that each case will fill 2 of your machines. Each case has 8500 gumball, which 4,250 should go in each machine. You will sell 2 gumballs per vend for a total of 2,125 vends/quarters, $531.25. If your machines only hold $60, or 240 quarters, you will need to empty your quarters numerous times before all the gumballs are dispensed. So, if each of your machines gross $531.25 fully filled, then X 60 machines is $31,875 (before costs & taxes).
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