How much commission should be offered?

[Jp7272j]

I am new to vending and am working on placing a pop machine in a new location and the owner is looking to make some money off the machine also.  Is there a going rate for commission or a percentage of profit to kick back to the business?  Thanks for all the help.

Jeremy

[RJT]

There is no set or average commission rates. I determine vend price based on my cost and commission.  Unless it is a high volume account I am not willing to sacrifice my margins. My goal is to double my money on each item. So if a can drink cost me .30 I am going to get a .60 vend price. If the guy wants 10% I would sell the m for .65 to .75. I vary my vend price based on what I think I can get. At a hotel you can get more than at a car dealership. Sometimes I make them hit minimums before I pay commissions.  3 cases a week or more or no commissions as an example.

There is just no set way to do commissions. You have to figure out what will work to get you the accounts and make sure the prices are not to high for the customer base that you loose sales because of a high vend price. Each account is different and you have to be able to negotiate what works for you and the account.

What type of account is it?

[NinnJinn]

There is no set or average commission rates. I determine vend price based on my cost and commission.  Unless it is a high volume account I am not willing to sacrifice my margins. My goal is to double my money on each item. So if a can drink cost me .30 I am going to get a .60 vend price. If the guy wants 10% I would sell the m for .65 to .75. I vary my vend price based on what I think I can get. At a hotel you can get more than at a car dealership. Sometimes I make them hit minimums before I pay commissions.  3 cases a week or more or no commissions as an example.

There is just no set way to do commissions. You have to figure out what will work to get you the accounts and make sure the prices are not to high for the customer base that you loose sales because of a high vend price. Each account is different and you have to be able to negotiate what works for you and the account.

+2,

My thoughts exactly!

[agrantha]

RJT

I would start with $.75 unless you are in the back woods. The rest I agree.

[RJT]

I see you are in NC and I can tell you very few mainstream accounts in NC have .75 pricing on cans unless it is a high "tourist" account with high commissions like a hotel, airports, college, etc. Your manufacturing, car dealers, etc it is about impossible to get .75 a can. None of the major players in the industry are getting .75 in those type accounts. .65 is the going price on cans without commission or with a small commission. You might could get .75 in an office where a large vending company dosent want to do it and the people have no choice but to take the higher price.

That is why I asked him what type of account it was because you can be to high and not sell in certain accounts.

[Jp7272j]

It's a jujitsu studio in St. Louis Area and I was going to put a bottle machine in.  The owner looking for Gatorade, vitamin water, etc.  He currently doesn't have a vending machine, or a water fountain in the place.    My other bottle machines I am charging 1.00, but I am getting ready to raise it to 1.25 for pop and water at the end of this quarter.   

[RJT]

Dont expect much volume out of that account unless it has a huge member base. I would do no less than $1.50 for bottles and 10% commission. Then again if it were me I wouldnt do the account at all unless it was a huge place with enough members.

[mission vending]

Most karate studios don`t make a lot of money. I`d put can soda in for any carbonated drinks due to  dramatically longer shelf life. The noncarbonated drinks are also good for about 6 months so that should not be a problem. Vitamin water is good as well but charge 2.00 for it as a premium product.

Offer 10% of gross after sales taxes backed out.

Service 2X monthly and you will be fine.

[Jp7272j]

Thanks for all the help