Here's my formula for valuing machines on location:

Compute value 1 to be what you think the machine might be worth as just a machine on Craigslist or eBay. Subtract a certain amount for the hassle of removing it from location. (Say, $20 for a small mechanical machine, up to a couple hundred dollars for full size soda machines.) This is the value of the actual equipment to you.

Compute value 2 to be 40 times WEEKLY profit. So, if the prices are set wrong and it's not making any profit, then value 2 would be close to nothing. So, if the machine is making $50/week in sales, and they follow the general rules right and it's making $25/week in profit, then the location is worth $1000.

The maximum of value 1 and value 2 is what you should offer. If the values are too far apart, it may mean that the machine is not right for the location. If value 1 is much larger than value 2, it means the location stinks and you're wasting a good machine on a bad location, and you'll have to move the machine off to a better location and move a new machine on. Factor in the hassle when making an offer. Similarly, if value 2 is much larger than value 1, you're probably losing revenue by having an under-sized machine on the location. Again, you'll have to go to the trouble of getting a new machine and putting it on the location.

Remember that Planet Antares *machines* really aren't worth anywhere near what people ask for them online. Since people who bought Planet Antares machines overpaid, they think they can charge too much too. My perception is that you shouldn't touch a Planet Antares machine unless you are getting a *bargain*. (Planet Antares is a business-in-a-box biz-op that got a lot of non-vending-type-people into the vending business.)


Also, it doesn't matter one bit how much money the seller put into the machines. If the seller got ripped off, that does not mean you need to get ripped off. In fact, if the seller is putting in a lot into maintenance, then you'll want to pay less because the machines are going to be nothing but trouble.


Do you know what kind of machines you are looking at?

Hope that helps a bit,
-Michael

thats the evaporation fan or circulation fan what ever you want to call it. That fan runs all the time to circulate the cold air in the machine. If that fan does not run all the time your machine would never get cold and the evaporator coils would freeze up.

Snack Dude

Thanks Snack Dude! That's what I suspected, but I just wanted to make sure that it wasn't about to run until it dies or something.

-Michael

It seems I've been Spammed.

Unfortunately, I don't have the particular coin mechanism that you can change by moving pins. My dumb mechanism requires new metal disks. (Probably the least expensive mechanism ever made.)

I'll keep looking around, of course.

-Michael

Simple enough questions. Yes, you can just go to a business and ask them if they want a vending machine in their snack room, or if they have a public waiting area, in there. (In the snack room, there will be fewer people, but the people will probably be more honest because they don't want to get fired for trying to steal from a vending machine.) In general, most locations, especially those that only want one machine from someone new in the business will not ask for any money (commission). Instead, they will let you put your machine there for free, since it is a perk for their employees/customers to have easy access to snacks, and they don't have to do any work to have it there.

Bigger locations may ask for a percentage of your sales, but I'd be surprised if you got a bigger location if this is your only machine.

It seems like a bit of a hassle to just have one machine, however, since economies of scale really come into to play with vending.

As far as setting prices, the rule is:
2*product price+commission+sales tax (if any) rounded to the nearest reasonable looking amount. For example, a product that costs $.28 sold at a location asking a 10% commission and 5% sales tax would be $.29*2=$.58 as your base price. 5% sales tax would be $.03 and the commission would be $.06, so that brings it up to $.67, which could either be $.65 or $.70 or even $.75 (depending on your competition in the area, etc).

Good luck. Hope that helps. (By the way, I'm relatively new to vending, so take other people's advice before you take mine.)

-Michael

Hey,
Just thought I'd add a couple thoughts (I'm new, so take my advice with a grain of salt). First, the Craig's List machines are "junky" machines. I don't care how much they cost new. The company that sells the machines is a "business in a box" company and their prices are extremely inflated. If you like at the Sam's Club website, you can see what kind of awesome machines you can get for $7000 (the amount that he claims they sell for new now.) The machines are worth something, and it's my understanding that most mechanical machines will give you fairly little trouble. Offer him maybe $400 per machine.

When I'm deciding if an existing vending route is a good deal or not, my general rule is that I pay 20 times weekly revenues on average. So, if a machine brings in $100 revenue (not profits)/week, it's worth $2000 on its current location. There are, of course, upper and lower limits to that, but that seems like a good rule of thumb. So, this fellow claims 4*$60+4*$14=$296 revenue per week. That times 20 is $5920. So, if you can *verify* his revenues, you could offer him $6000. Reduce that amount if things seem dubious (which they do). Don't get caught up in buying any one particular vending machine or route. There will always be more. I passed up a couple of hot deals (timing wrong) before I finally bought my 13-location route for $600 (no, I didn't leave off a zero - six hundred for 15 junky mechanical machines on 13 locations.) Brings in about $110/week in revenues and needs to be serviced about once every 3 weeks, which takes me a bit over 4 hours for all 13 locations.

One thing to keep in mind is that a *vending machine* is worthless. It's only value is its ability to make money. I can recommend the book "Rich Dad, Poor Dad" for a good definition of the word "asset". Basically, an asset is something you own that brings you income. So, a vending machine is not worth something because it is nicely arranged piece of plastics and metals, but rather because people put money into it and you get that money. A $10,000 vending machine on a location that brings you $10/week is only worth $200 according to my formula. Just as in real estate, there are 3 things that determine the value of a vending machine: location, location, location.

By the way, good luck! I'm also a young college student (grad student now - not quite as young as you.) You certainly can do it! As in any business, it takes work, but it's a different kind of work and it comes with its own frustrations and satisfactions.

Share your experiences as you make progress!

-Michael