*sigh*

[dperry]

Ok, I've been doing some number crunching and I hafta say I'm not terribly impressed.

I have my 2" doubles to place, so I've been using them as my model.

If I place 10 of these machines, and each machine does 1 vend a day per product, that would be 600 vends per month. 2 sides x 30 days x 10 locations = 600 vends.

600 vends @ $0.50 a vend would be $300 for the month for all locations.

25% ($300 x 0.25 = $75) goes to the location

That leaves  me with $225 ($300 - $75 = $225)

Then I have to replace the product.  The cost of 2" product is about $50 if you add shipping.

600 vends = 3 250 count bags of product.

So 3 bags is $150

So my take is $75 ($225-$150)

So from $300 worth of income, I walk away with $75. 

Ouch!

 

[nepavend]

Darryl,

Your COGS estimate for the capsules is too high.  You are assuming a 40% (.20) cost on a .50 vend.  I certainly hope you are not paying these prices for 2" caps.  Mystery Mixes can be had for anywhere from .06 - .10 depending where you go, and assuming you don't add anything else into the mix.

Higher end items like I use (Dentures, Family Guy, Robot Warriors) are about .10 - .15 each depending on shipping.

If you are indeed using product that is .20 each, they should probably be 75 cent vends or 1.00 vends.

This will make your estimates look a little better, although it doesn't set the world on fire, it isn't terrible either.  The volume of revenue/profit will increase over time for your business, though not necessarily the margins.

Flat Vending is another opportunity for good margins and volume with those items being between .10 and .13 each and vending anywhere from .50 to 1.00.  But we have already mentioned that and you have a bunch of these 2" cap doubles now. 

By sticking with a mystery mix on one end and a higher end item on the other you can earn a good margin and volume until you see what sells better in which locations.

[Rustinm]

Hey Joe, what is "flat vending"?

[dperry]

Darryl,

Your COGS estimate for the capsules is too high.  You are assuming a 40% (.20) cost on a .50 vend.  I certainly hope you are not paying these prices for 2" caps.  Mystery Mixes can be had for anywhere from .06 - .10 depending where you go, and assuming you don't add anything else into the mix.

How good are the mystery mixes for that price?  Are they worth buying?  Would the sell well at all?

[nam]

Darryl,

Your math isn't exactly correct in that you are showing the cost of buying 3 bags of 2" product with 250 items per bag. You are comparing the cost of 750 items to the revenue of only 600 items. Also agree with Darryl on your cost for the 2" product. As big as Houston is it seems there would be some wholesale vending supply houses where you could buy without shipping cost.

Houston has a district that is quite large and full of wholesale businesses, mostly importers from the China. Can't think of what it was called but been there twice years ago. It's like an entire section has become a wholesale district full of wholesales selling to the Dollar stores, electronics, towells, luggage, and just about everything you can imagine. Do you know this area? It has a specific name that I can't recall but it is huge! They might very well have a source there for vending supply. They seem to have everything else. Most of the businesses I went in where Chinese and could hardly speak English. Most everything had to be bought in cases and most had someone at the door not allowing the general public. You had to have a business license, tax number, etc. to get in most but not all. I'd sure check out that area and even ask some of the business owners if they knew which store to find what you are looking for. If you go there, take a couple samples to show these guys what you mean. Most are really hard to communicate with.

The other thing is you are using numbers that may well not be realistic. These machines are attractive and designed to catch the eye of the kids. I think your numbers are too conservative. If you have a location doing badly move the machine to a better location. I compare your machines to what a rack with a machine vending the large superballs would do compared to a seperate machine like a Bounce a Roo would do in the same location. The Bounce a Roo is going to sell alot more balls. It's just so hard to sit down with a paper and pencil and come up with what you are going to make. You are gonna have locations that do terrible and make you wish you hadn't located the machine there. But then you are gonna have locations that make more than the next 6 locations you go to. So hard to guess ahead of time. All you can do is start locating and moving machines to get your averages higher than the numbers you have laid out here.

nam

[nam]

Rustin,

Flat vending is sticker/tattoo machines. They are vended in flat cards (sleeves) to the customer.

nam

[dperry]

Darryl,

Your math isn't exactly correct in that you are showing the cost of buying 3 bags of 2" product with 250 items per bag. You are comparing the cost of 750 items to the revenue of only 600 items. Also agree with Darryl on your cost for the 2" product. As big as Houston is it seems there would be some wholesale vending supply houses where you could buy without shipping cost.

Nam,

You are correct.  There is a wholesale vending store in Houston.  However it's only open 8:30-4:30 M-F.  I do work a full time job and do my vending on the weekends, so I can't really get to it easily.  It's like an hour away if you factor in traffic.  One other thing.  When you buy locally, you will have to pay sales tax unless you have a tax resale licence, which I don't have.  So it's kinda a trade-off.  8.25% sales tax or shipping costs.  TNT Amusements is also in Texas, but it's 3 hours away, so if I have it shipped, I have to pay shipping AND sales tax.

I guess it all boils down to what price you pay for the goods.  Cuz we all know we make our money when we buy, not when we sell.

[nepavend]

Flat Vending is flat stickers and tattoos.