Profit margin

[blu Vending]

What is everyone's profit margin for certain soda cans, bottles, and snacks per vend?

[NinnJinn]

What is everyone's profit margin for certain soda cans, bottles, and snacks per vend?

Percentage wise, or $$$ profit/vend?

[blu Vending]

Both

[RJT]

I look at it as an overall average more so than per item. The overall goal is 100% markup on average.

Some items you make less, some more, some exactly 100% markup.

[NinnJinn]

Now why did I know you were going to make it difficult for me?  

Ok here it goes.  I am still working off my pallet of cans. My cost will probably go up after I use up the pallet.

Right now....

12oz Cans

Cost me 20cents each

Charge   65cents each

profit of   45cents each

or a 69.23% profit of the vend price after cost of drinks.

Is this what you were looking for?

[NinnJinn]

  did I do my formula right?

[blu Vending]

Sure is, thanks. Do you vend bottles as well?

[NinnJinn]

Not yet,  But as soon as I get a hold of a bottle location.  I will be able to get my bottles through work and get their discount.

And I plan on pricing it with everyone else in the area which should pull in about a 52% profit of the vended price after cost of product.

[NinnJinn]

But in my area, everything is cheaper than most areas.  WIth my 65cent cans, there are a few with the same price, but about 50% of the other machines have me beat by a nickle or more.

The bottles around here are running 1.25/vend. there is one place that has their RC bottles at 1.00

[RJT]

You should price everything according to category and not cost IMO.

Cans one price, bottles one price, candy one price, etc... Like I said it is an over all margin to reach 100% markup

Some companies price it out somewhat seperate. The "BIG" vending company prices candy at two prices depending on manuf. M&M Mars one price and Nestle another.

I dont agree with that and think it causes confussion with customers. They dont understand why a Snikers is more expensive than a Babby Ruth.

.

[NinnJinn]

You should price everything according to category and not cost IMO.

Like I said it is an over all margin to reach 100% markup.

Ok, you have said it twice now if not more.  with the 100%, Are you talking about Doubling your money?

Pop cost you a quarter to buy so you put a 50cent price tag on it.

the most expensive candy bar costs you 50 cents to buy, so you put a dollar price tag on it?

Is this what you mean?

[mission vending]

A simple rule of thumb is to double your cost. Depending on the market that is not always possible. When factoring loss due to out of date, giveaways, what you consume etc. your Cost of Goods Sold should be in the 50-55% range.

That is If you have $100 in gross sales $50 - 55 dollars should should be what you spent to buy the product.

[Hillbilly]

In the example you gave if a candy bar cost .25 and you sell for .50.  You have 100% markup which gives you a 50% profit margin. You are not doubling your money at 100% markup.

[RJT]

Yes, double your money. Like I said it is an average overall. I have some chips that cost me .18 but sell them for 55 just like the chips that cost me .29. Crackers cost me .13 a unit and are sold from .55 and up.

You will also have to take in consideration comissions, volume etc. A LARGE account may need lower pricing but you are working with volume. I have one account doing over 2k a week and they have cheaper pricing.

You DO NOT have a set price on prodcuts. It should be done on a case by case basis depending on the account.

[RJT]

Hillbilly,

If you are refering to my post you are 100% correct. That is what I meant but explained it wrong in my wording.

[NinnJinn]

Thanks guys!!! 

A simple rule of thumb is to double your cost. Depending on the market that is not always possible. When factoring loss due to out of date, giveaways, what you consume etc. your Cost of Goods Sold should be in the 50-55% range.

That is If you have $100 in gross sales $50 - 55 dollars should should be what you spent to buy the product.

So does that mean I should drop my can prices from 65cents back down to 50cents?  I was selling more when it was at 50cents...  *snicker, snicker*

[mission vending]

Not unless you get competition next door at a lower price point.

Remember the cost of those sodas WILL go up at some point and eat into your margins. You've also got an older machine that WILL need some maintenance and repairs in addition to the DBV issues you've had to deal with, so make the money $ now and bank it for when that day comes.

my .02

[NinnJinn]

Not unless you get competition next door at a lower price point.

Remember the cost of those sodas WILL go up at some point and eat into your margins. You've also got an older machine that WILL need some maintenance and repairs in addition to the DBV issues you've had to deal with, so make the money $ now and bank it for when that day comes.

my .02

Hmmmm, less than 23minutes to get someone to differ!    Its all good Mission!  Just threw it out there to get someone fired up!  I have no intentions of lowering the price unless everyone else does.

Yeah, I am selling less, but the money in the "can" is the same as when it was at 50cents.  So, less product to stock, but still making the same amount of silver.

And as far as repairs etc, I hear you loud and clear!  And am starting to be thankful that you guys knocked some sense into my stubborn noggin...

[mission vending]

Hmmmm, less than 23minutes to get someone to differ!     Its all good Mission!  Just threw it out there to get someone fired up! 

Not getting "fired up" it's not my money .  LOL 

Just sharing experience, do with the info as you will . Sounds like your starting to listen to us "oldtimers"  though  ;D ;D

[blu Vending]

look what I started! Thanks for the input everyone.

[NinnJinn]

look what I started! Thanks for the input everyone.

Sorry Blu, Didn't mean to get your Thread off topic.