New Location is it worth it

[smartvendnw]

Maybe I'm over simplifying it in my approach with locations that want a commission. I'm a new company so I decided early on to use this price model and commission formula.

12 oz pop $1.00 (why charge .85 they still put in a $1 bill)

1.5 oz Chips $1.25

Candy Bars $1.25

Misc items a nice healthy margin- say Monster at $2.50, cost is like $1.31.

Chex Mix .33 sell for $1.00

Etc...

Maybe it's my market- Seattle but I've not received any push back. I just won a 3 location deal where the current vendor had pop at .85 and chips at 1.00 and no commissions. They wanted commissions- I gave them that pricing and told them I do 15% on an adjusted gross profit- meaning I shave off a flat rate of 25% off the top (covers partials costs and taxes) and then pay 15% on the balance. When all said and done I'm paying about 11% on gross.

Will I go out of business here?

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Oh and I add .10 to every price when a cc sale.

[TKK]

I also add the .10c cc fees.

[Southeast Treats]

I know all the business arguments and consumer studies for the two tier pricing (.10 extra on credit purchases) but I don't do it.  My logic is this - I add card readers to increase sales; so then why do I want pricing to discourage the customers who want to use credit cards?  People may accept it but they don't like it.  They like the CC option and I try to keep my margins high enough anyway.  Cash sales do not drop in my experience, people who have cash will still use it, so it's all added sales/profit anyway.  As long as the location is busy enough to start with, the increase in sales covers all the costs and adds profit.  If the current vendor is doing credit at two-tier prices that can be a selling point as well.

 

As for pricing, I still have cans at .75 in non commission machines and .85 in commission machines minimum.  I try to keep pricing in .25 increments otherwise to ease strain on the change banks.  I don't do .95 on anything, that always get rounded up to $1. 

 she has attached their current vendor's  monthly commission statement.I called and asked her but she does not know if that is total collections or gross sales.

 

The statement from the current vendor states 15% commission  all vending ..

Amazes me how many locations don't know the details of their vending arrangement, and a lot of vendors take advantage of that.  Be clear on how you arrive at your figures, put it in writing for them, and live by it.  They will appreciate it and remember it when the next guy comes calling....