massalonvending Posted April 15, 2013 Share Posted April 15, 2013 Okay, I have a machine at a pub literally within walking distance from my house (I take the golf cart if I have to), and he offered the splitting of profit to me like this: First, I make my costs back. Then we split the revenue 50/50. Is this too high for a $60/month client? It's one of my biggest clients, and he is letting me put my machines in his other 2 locations. I was thinking renegotiating the other 2 machines, but keep the one near my house as it is. What do you think? Oh yeah, I never pay for drinks and get a 10% discount on food for being a "vendor", but it's not official or anything. Link to comment Share on other sites More sharing options...
adog Posted April 15, 2013 Share Posted April 15, 2013 Yeah I would do that! Especially if it allows you to get your feet in the other two doors. I've heard this approach and I like it for a good location which is 1/3 for cogs, 1/3 for me, 1-3 for the business owner! If you try to negotiate to much i have heard of business owners just putting in their own machine! Link to comment Share on other sites More sharing options...
massalonvending Posted April 15, 2013 Author Share Posted April 15, 2013 These were his machines beforehand, but he was tired of working on them, so he let me buy them. I'm thinking of telling him that the other 2 locations are going to take alot more time to go to, and I was wondering if you would like to do a 40 or 35% commission for the other two Link to comment Share on other sites More sharing options...
shepherdsflock Posted April 15, 2013 Share Posted April 15, 2013 You're effectively paying 40% of gross. That is too high in my opinion. Anything over 30% is pretty tough, unless you're vending gumballs out of a single head. Unless the other two locations are really amazing, I'd push him for lower commssion. Link to comment Share on other sites More sharing options...
mjacks Posted April 15, 2013 Share Posted April 15, 2013 Depending on how much of a drinker you are, you may be coming out ahead with the free drinks. ;-) Link to comment Share on other sites More sharing options...
GagesVending Posted April 15, 2013 Share Posted April 15, 2013 Sounds like a nice guy. If you're doing $60/month, that's a good location, so I would suggest you put a larger set-up (3-4 heads) there and pay him 25% gross. (It's more than 25% net, gross is before expenses). I don't bother with paying a net commission, it takes too much time to calculate it. You're essentially getting 3 locations out of the deal, so if you can convince him to accept a 25% gross commission, I think you'd find it well worthwhile. 20-30% is pretty standard anyways, so you're not by any means being unfair or asking too much of them. Link to comment Share on other sites More sharing options...
massalonvending Posted April 15, 2013 Author Share Posted April 15, 2013 Sounds like a nice guy. If you're doing $60/month, that's a good location, so I would suggest you put a larger set-up (3-4 heads) there and pay him 25% gross. (It's more than 25% net, gross is before expenses). I don't bother with paying a net commission, it takes too much time to calculate it. You're essentially getting 3 locations out of the deal, so if you can convince him to accept a 25% gross commission, I think you'd find it well worthwhile. 20-30% is pretty standard anyways, so you're not by any means being unfair or asking too much of them. Thanks! I'm going to mention that to him next time I see him. Btw, they are 3 heads. Depending on how much of a drinker you are, you may be coming out ahead with the free drinks. ;-) I'm fifteen... Looks Iike I'm gonna have to drink more soda Link to comment Share on other sites More sharing options...
F J Vending Posted April 15, 2013 Share Posted April 15, 2013 If your visiting his place often and having a few drinks then I would not worry about it. Your not losing since your splitting net and a few drinks a week would have you coming out ahead. As far as his other locations I would try to not pay more than 25%. Link to comment Share on other sites More sharing options...
mjacks Posted April 16, 2013 Share Posted April 16, 2013 I'm fifteen... Looks Iike I'm gonna have to drink more soda Yeah, you will have to down quite a bit. Good for you for getting started in business at your age. Good luck. Link to comment Share on other sites More sharing options...
newheart53 Posted April 16, 2013 Share Posted April 16, 2013 I really like to see a young man [notice I said young man not young kid] take initiative to start a bus. to get some money. Wish all 15 yr olds would be that way. Keep it up and you only have the sky as your limit. Link to comment Share on other sites More sharing options...
massalonvending Posted April 16, 2013 Author Share Posted April 16, 2013 I really like to see a young man [notice I said young man not young kid] take initiative to start a bus. to get some money. Wish all 15 yr olds would be that way. Keep it up and you only have the sky as your limit. Thanks! When I tell my peers about it, they are intrigued about it, but I don't think they want to do the work, they just want the $. Then I have to explain how long it takes to even get a profit... Link to comment Share on other sites More sharing options...
GagesVending Posted April 16, 2013 Share Posted April 16, 2013 Thanks! When I tell my peers about it, they are intrigued about it, but I don't think they want to do the work, they just want the $. Then I have to explain how long it takes to even get a profit... That's exactly right! It kinda irritates me when people don't know the difference between "profit" and "revenue." People will ask me: "So, how much profit do you make on each machine?" I respond: "Well, they're all different. I generate $5 a month in REVENUE from some and $100 in others." Most people have no idea how business works, which is why the majority of the folks that get into this business for that "passive income" always fail. Link to comment Share on other sites More sharing options...
massalonvending Posted April 17, 2013 Author Share Posted April 17, 2013 That's exactly right! It kinda irritates me when people don't know the difference between "profit" and "revenue." People will ask me: "So, how much profit do you make on each machine?" I respond: "Well, they're all different. I generate $5 a month in REVENUE from some and $100 in others." Most people have no idea how business works, which is why the majority of the folks that get into this business for that "passive income" always fail. Exactly! Ill just tell them to name a client. and I can tell them the average from that machine. Now for profits, don't expect much, But honestly, I originally started it because I thought it would be something I can do while in school, like a part time job. Plus, you don't have to record your income as much Link to comment Share on other sites More sharing options...
PowerVendor Posted April 21, 2013 Share Posted April 21, 2013 Good for you, getting established and being smart enough to ask the right questions and understand the different responses you receive. Like the guys on here are saying, 30% of gross (total) is close to 50% of profit depending on what produce you are vending. Sit down with the owner and explain to him that you have product and equipment expenses and he/she should understand what you are telling them. But keep and open mind, especially if you are first starting since getting your route up, running and established is important. Don't let squabbling over 5 or 10% make you lose the deal especially if you are super close to the location and the place gives you soda and food discounts. I am 275 pounds and wish my locations would do that for me. They would lose their rear ends on that deal. LOL. Link to comment Share on other sites More sharing options...
dromero Posted January 28, 2014 Share Posted January 28, 2014 Few drinks and discounts will make up for your share loss. Link to comment Share on other sites More sharing options...
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