The Vending business has expenses just like any other business. When people start a new business such as vending, they often fail to consider “the cost of doing business.” If you think you actually get to KEEP every quarter that flows through your machine, you’re in for a rude awakening!!! Vending can be very profitable, but it is like anything else: You have to W-O-R-K to run a profitable business.
Here are some important considerations about your cost in running a vending business:
Cost of Machines
(your initial capital outlay). How much will it cost you to begin your business? Consider the cost of replacing stolen machines (yes, this will happen if you have more than 10 machines!).
Read also: How to Buy A Vending Machine: Tips and Traps
Cost of Servicing.
This includes your time, gasoline, vehicle costs, etc. When you start driving 25,000 miles a year like I do, vehicle costs really add up.
Cost of Product.
How much will those gumballs, candies, and toys cost? Do your homework here. Most likely, it will be cheaper to buy from a Sam’s Club or Costco Warehouse than to order online. The exception to this may be if you order in bulk (85 cases of gumballs or more).
This can really fool you if you don’t track these expenses. You’ll wonder where your profit is going! These costs include computers, printers, software, paper, laminating, etc. You can also include here attorney and accountant fees as ongoing administrative costs.
This includes replacement parts for your machines, cleaners, tools, etc.
Remember Uncle Sam’s part. Check with your accountant for details here. Thankfully you get great deductions with this business that will help you keep more of what you earn. Always use professional help!
In my opinion, if you are able to net 50% of your sales before debt servicing (loans), you’re doing good. Remember, this is after you figure in all those big and little costs of doing business.
Your Vending Business will have costs to run that can vary over time. I am not trying to discourage you here but help you understand some of the costs (this is not an all-inclusive list). The good news is that if you control costs your Vending business can be profitable and you’ll enjoy the fruits of your labor. A Vending business is still a good way to make income if you’re looking for extra money – just do it wisely with the proper expectation. It’s more than collecting quarters.