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PRICING STRATEGY ??


barry502

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Hi,

 I am new to vending and want your opinions on pricing products. Lets take this as an example - a SNICKERS chocolate bar costs me 30p(UK STERLING) - What would you guys aim to achieve as a sale value - would you go for half the cost i.e 45p sale value or would you aim to double your cost i.e 60p sale value?

I would be interested in hearing what you guys do with regards pricing. I DO have my own strategy but would like some opinions from experienced vendors.

Many thanks

Barry.

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Barry,

I double the cost of everything then round up to the next quarter. (25 cents) 

Things are obviously going to be different here in the States but this is the formula I use exclusively. I found that it affords me a generous profit margin AND keeps me well below my competitors pricing.

Steve

 

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Thanks Steve,

Your formula is pretty much what I do but I have found that with some products this is just not feasible. For example if a chocolate bar costs me say 70p I would have to sell for £1.40p and I know for a fact that I would have trouble selling.To get round this would you actively look for products which could easily achieve this margin or would you accept a lower margin fo certain products?

I am fortunate that I am in daily contact with one of my machines as it is at my place of work. This allows me to micro manage performance which is invaluable and also get feedback from my customers on a daily basis. I am new to this and have tried to offer my customers a better quality of product but it seems that the better quality products do not do as well as run of the mill choc bars such as snickers twix etc - all because of price.

The reason for all the questions is that I am about to place my first machine outwith my place of work and I am unsure as what type of product to offer - high quality expensive or cheaper more common items ?? ANY advice welcome.

Sorry for the long winded post............

B.

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Barry,

I initially thought that I would have to seek out items that would achieve my desired margin, but I am finding that not to be an issue. The only item I sell that can be a bit "iffy" on the margin is chocolate bars. Everything else is comparable, or falls below my competition when I use this formula.

For example, I buy my soda cans for .26c. Double them to .52c, round up to .75c. which is the going rate for cans of soda here. Some even sell them for $1.00.

I get packages of cookies for .15c. Doubled is .30c, round to next quarter is .50c for an item that everyone else sells for .65 to .80c!

Same goes for my chip items.

Steve 

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Steve,

Over here I am the same as yourself,I have no trouble selling soda and crisps (chips). Sodas cost me 24p and I have no trouble selling for 70p, chips cost 23p and sell for 55-60p. The trouble starts with chocolate bars, some make their margin easily but most do not. I use an AP SNACKSHOP machine which holds 54 different selections of chocolate bar so maybe the answer is to replace spirals to allow for more chips etc? I will continue to monitor the situation and adapt as I learn.

Thanks Steve

Barry.

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Just been on your website Steve and have to say that you have a great set up !! Personally how did you go about setting up your business and are there any pitfalls to look out for?

I am just playing at vending at the moment but I like it so far and have developed a passion for it..........I like the challenge of finding new sites!

B.

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  • 1 month later...

What if you were to sell everything in your machine for $1.00? Has anyone had any luck with that? Profit would be high and I most people don't like to carry around change in their pockets.

When I use a dollar and get change at work. I save up the change I get and use it to buy another item at a later time.
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