Rule of thumb for OCS supplies mark up?

[Zachsea]

Hi all We’ve been in the vending business 13 years but are new to the coffee service business and would like a few pointers. 

1) what should our goal mark up be?

2) what are some preferences you’ve noticed in customers in the coffee world?

3) is there a pitch or angle to gain more locations that you wouldn’t traditionally do with vending pitching? 

[AZVendor]

Are you going to do single cup machines that take money or batch brew machines that you'll sell cases of coffee to?  You basically keystone both (100% markup) but single cup has the expense of cups and cartridges (K cups) which you factor in to your pricing.  Batch brewing is where you sell fractional packs of coffee in case quantities, throwing in the filters for free.  You have to provide clean decanters at each service and then you sell ancillary products to them too.  You'll have receivables with batch brew and collect cash or card sales with single cup.  Both will require you to plumb the units in and neither machine is cheap, though batch brewers are cheaper.

[AngryChris]

I have found that people won't pay 100% markups.  Since cheap coffee is pushing $28/case and namebrands are in the realm of $40/case, businesses just won't spend $50+ on cheap coffee or $80+ on max/folger because there are sources online to have it delivered much cheaper.  It's unfortunate that it's like that nowadays but I think covid really drove delivery services up and now OCS is something you have to do as a package deal with vending to really make it worthwhile.  I shoot for getting $5-$10 per case.  Big companies around here have the driver drop off the coffee with their regular service cycles and the push is to do OCS, water, and other services in addition to regular vending.  The margins are getting much thinner but they can make it work that way.