Analysis

[Nick505]

Just about all of my racks consist of the following setup:

 

 

Two Inch

• .75
• 1.00

Flat

 

• .50

One Inch

• .50
• (1) .25

 

I was playing with numbers and to me it is looking to make sense to take a smaller profit per 2" cap in hopes of higher sales returning a greater overall profit. Currently I have a rack in a busy Chinese buffet. The location nets about $260 every 4 weeks. From the (2) 2" machines I would estimate that combined they do about $55 dollars; $25 from the $1.00 head and $30 from the $.75 head.

 

Lets look at the $1.00 2" machine. A product that I sell for $1.00 is A&A's Yo Yo Balls with a cost of $.143 per cap. 

 

So obviously if I only sold 30 Yo Yo balls @ $1.00 that nets me 25.71 before commission.

 

Selling:

• 60 @ $.50 = $21.42 net before commission
• 65 @ $.50 = $23.21 net before commission
• 70 @ $.50 = $24.99 net before commission
• 100 @ $.50 = $35.70 net before commission

 

The Walmart approach sounds very tempting but other factors I have not factored in include shipping prices, and cost to service. Shipping prices being a big one because I will obviously be moving more product. It was just something that I was thinking about and wondering if I am doing the right thing with the higher price points...

[Bravo Duck]

The bulk vending business is all about trying different things until you find what works for YOU.

[Smiley]

The commission rate you are paying matters. Let's take an account where you are paying 40%. If in that location you sell $100 of an item that has a 30% COGS you are left with 30% of the $100 or $30. But in that same location if you were to sell $80 of an item at 20% COGS, you would be left with 40 % or $32..

 

Now let's take an account with a 20% Commission Rate. The first item would net you 50% of $100 or $50. The second item would net you 60% of $80 or $48.

 

To summarize, raising prices (or giving less value) makes more sense where your commission rates are higher.