Also, your blue collar worker is more willing to spend money on vending products that white collar on average (about 2 to 1).  The general rule is you can expect $2.00 per week per white collar employee and $4.00 per week per blue collar employee as an average.  It is this reason alone not to immediately invest in a lot of machines right off the bat. Take a handful and every week or month depending on the use of the vending machine, track the numbers to see what the performance is.  If you have a low performing unit, simply move to another.  There is no sense, especially in the beginning when revenues are low to tie up a large investment for an account that can cover costs.  Your time will be better off with fewer, higher income vending machines rather than more, lower performing ones.

The best locations will tend to be businesses that have lots of employees.  Typically, blue collar workers eat more than white collar while women eat the least.  At most businesses, blue collar workers often don’t leave for lunch so their meal comes from the vending machines.

Many vending operators set a threshold of $100 per week per unit for their machine to generate, otherwise the machine gets moved to a new location.   Others have a ratio and calculate their minimum required income.  For example some will require 10% of their investment to be the monthly sales. So for every $1,000 on equipment they require $100 in monthly sales. This method removes the arbitrary minimum per week (this number really can only come from experience) and factors in the amount of investment in vending equipment so you know whether you are getting a positive return on investment.   If you can make the same amount but spend $750 on a refurbished vending machine versus $3,500 on a new one, guess which one will be more profitable?

Estimating Vending Machine Profit

While actual figures will vary, especially due to the actual income of a machine, here is a way to estimate your profit from a vending machine.  Developing a spreadsheet to calculate this number is the fastest way so you can try different sales estimates.

Total Sales – Start with a monthly number but also figure into annual sales so later we can determine the return on investment with your machine.

The remaining numbers are subtracted from your total sales.

Cost of Inventory – The average should be 20%-30% depending on what you are vending.

Expenses – There are several other expenses that need to be considered even though they do not come directly from the operation of your vending machines.  Some examples include:

• Insurance
• Fuel
• Cleaning
• Telephone
• Marketing
• Permits, Corporation/LLC filing
• Labor (For labor you hired, not to include yourself)
• Taxes
• Commissions
• Miscellaneous overhead

To get a per unit approximation, total the amount of each category and divide by the number of units.

By subtracting your inventory costs and expenses from sales, you end up with a net profit.

There are a lot of variables when figuring how much do vending machines make.  Before spending your money be sure to do your homework and be sure there is still a profit left for you.

By www.startupinformant.com

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