What’s the Real Profit Margin of a Vending Machine Business?

When it comes to vending, a desirable amount of profit is make $1 of net profit per transaction. This goal profit will not be possible with every product in your vending machine (think things like a small pack of gum or mints), but for most of the products you sell this can be pretty realistic.

Beyond profit per transaction, most vending machine operators I talk to shoot for $300 in net revenue per machine, per location as a goal. That means you need to make about 300 transactions per month or 10 per day on average to hit your goal net revenue numbers.

The best place to start looking for low-cost vending items is the big box discounters like Costco, Sam’s Club, and Amazon.com. You may be able to buy in bulk at even better prices from other third parties, but if you’re just starting out these three stores are a safe bet.




 

Here are a few real-life examples that you can take from vending machine prices in 2017:

20 oz. Soda – Sell between $1.50 – $2.00 in most machines. Pack of 24 Coca-Cola Classic on Amazon.com is $41.57. That work out to $1.73 cost to you as the vendor. In this instance, you would want to pass on this product for your vending machine since you would not be able to hit your $1.00 target vend goal per transaction.

Skittles + Starburst – You can sell a package one of these popular candies for about $1.50 in most parts of the United States. A 30-pack of Skittles + Starburst is currently selling for $24.99 at Costco.com. Since your cost in this instance is $.83 per unit and you can markup the product to $1.50, you would be netting $.67 per transaction. While this is not your goal margin per transaction that we outlined above, it’s not terrible and could be an product option to include in your machines.

Nature’s Bakery Fig Bar – You can sell a fig or any healthy type of bar between $1.50 – $2.00. Some premium bars you can sell for even higher. This particular brand of fig bar sells for $34.99 for a package of 72 at Costco.com. This rounds out to only $.49 per bar. Since we can easily charge $1.50 (or more) for this product from a margin standpoint it is a winner. We have hit our $1.00 net profit goal and is perfect for vending from a financial perspective.

Famous Amos Chocolate Chip Cookies – These little bags for chocolate chip cookies costs $14.99 for a pack of 42 at Costco.com. That works out to roughly $.36 per bag. You can easily mark up this sweet treat to $1.00 – $1.50 almost anywhere in the United States. That means you’ll bring in around $.64 per transaction here. If you’re able to get sales off of $1.50 price point, you’ll bring in over $1.14 per sale which is terrific and over our goal mark.

Rice Krispies Treats – You can purchase a 54 pack of these classic snacks at Costco.com for only $13.29. This means you’re only paying about $.25 per package.  This marshmallow based snack can also be sold between $1.00 – $1.50 depending on location. Due to the long shelf life and demand this is the ideal product to test for your vending machine business.

Karma Boxes

Examples of Healthy Vending Machines.

Demand of Items

Of course there’s a bit more to think about than just the net-profit per transaction you should expect to make. You also need to think about the popularity of the items you have for sale. After all it doesn’t matter if you have a product that will net you $2.00 per transaction if no one is actually buying it.

One easy way to get a sense of the products that sell well initially is to take a look at some of the other vending machines in your area. What specific beverages or snacks do they sell? Is there a certain snack that seems to be sold out frequently? That can be a great way to start.

After you begin operating your business for a few months, you will be able to identify for yourself what sells and what doesn’t in your machines. From there you will need to stop purchasing low-selling product and swap it out with new test product that could be a winner. Optimizing the product offerings in your vending machines will be an ongoing task for your business moving forward.

Related Resources

KarmaBox Interview – We sit down with the founder of KarmaBox A.J. MacQuarrie to discuss the opportunity that exists in healthy vending during this exclusive audio lesson.

Buying Used Machines – Learn the top 7 places to buy vending machines at a discount.

Vending Options – An evaluation of the different categories of vending machines (coffee, soda, healthy) you could start.