Vending machine = Multi-Button Bandit
July 22nd, 2005 | by mbhunter |Got vending machines in your building at work? They’re making a killing. Especially sodas. You’re paying a hefty premium for convenience.
I went around with a gentleman with a small vending machine route because I was interested in purchasing it. He shared some information: he aims for a 100% markup on the items he vends. He buys Snickers at Costco for 30 cents apiece and sells them for 60 cents. He does even better on soda: he catches sales and buys a 12-pack for 2 bucks, and sells them for 50 cents apiece. That’s a 200% markup!
So, if you need your pretzels or your soda, get them from the store or a wholesale club, or get a big package and divvy them up. You’ll probably chop off two-thirds of the cost.
3 Responses to “Vending machine = Multi-Button Bandit”
By Dawn on Jul 22, 2005 | Reply
So are you going to buy a route?
By Cathy on Jul 22, 2005 | Reply
I was going to ask the same question as Dawn. Also, how much time would you have to spend on it? And, how much money does he really make? I can understand that it’s a good profit, compared to the investment, but you’d have to sell 100 Snickers bars to make $30. I’d love to know how you end up deciding whether it’s a worthy investment.
By mbhunter on Jul 22, 2005 | Reply
This was a few months ago, and I haven’t contacted him again about it.
He had four soda-and-snack combo machines in service in the same area. He spent a few hours one day a week servicing and refilling the machines, plus bookkeeping and buying the concessions. All told he was probably pulling about $15 per hour he worked. He had other things besides Snickers — about 15 different items in four machines.
I think that the price he was looking for the route was probably reasonable. Judging by his “take” from a couple of the better-performing machines on the route it might have taken about a year and a half to pay it off, excluding time, if I had serviced the machines myself. If I paid someone $8 per machine per week to take care of them (or leased the route to them for $200/month and they keep everything they make), it would take longer, but if would take a lot less time.
The faster an investment pays off, the better, of course. I would like to have something of this size pay itself back in less than a year, but that’s getting it at a really good price, and he wasn’t pressed to sell it. He could afford to wait.