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Profit Margins - Machine Set Up


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Hi guys i was wondering what all your business strategy's are regarding maintaining a profit margin.... I was thinking of changing the amounts i vent according to the profit margin so that regardless of what is vended i know that every dollar in the machine is about 50% etc.

For example:

10 Kg MMP costs me $122 ($0.12 per 10g)

12 Kg Skittles cost me $114 ($0.095 per 10g)

So for every dollar vend... my machine dispenses

20g MMP for 76% profit, and 26g Skittles for 75% profit.

Therefore every dollar i pull out of my machine regardless of item is 75% in my pocket.

That is how i like to work my machines, how about you guys, what are your strategies?

Serving Size and Cost compared to national supermarket chain

Here in Australia we have a national supermarket chain called Coles (Biggest there is, similar to the US Walmart and UK Tesco).... the normal retail price of M&M Peanuts and Skittles are as follows...

200g bag of Peanut M&Ms is $4.06 ($2.03 per 100g)

200g bag of Skittles is $4.27 ($2.14 per 100g) as of 19/06/2011 and no special offers.

So my customers roughly pay $5 per 100g of Peanut M&Ms, and $4 per 100g of Skittles. Is this fair or should my prices be much closer to supermarket prices? However if you were to take the normal sized bags (i.e the 50-60g bags then there really is not much difference between my prices and theirs).

I look forward to your views and opinions.

Cheers guys,

Oz Vender

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Oz Vender,

You can not get an apples to apples comparison from USA vendors. With food products, there may also be cultural differences to consider in what products people will buy from a bulk vending machine. We have no "real" dollar coin here in the USA that is widely used by the general public. So we are forced to sell candy at a quarter, but we still have to give a reasonable handful along with ever rising product costs. Nor can we consistently get 50 cents for a handful of candy either. Most vendors have moved away from candy for those reasons. 8-Select Uturns are a dismal failure here in the U.S. because selling eight different candies at just a quarter simply does not work - not enough volume and not enough margin.

I would love to sell candy at a dollar, but that is a pipe dream in my life time! That is why most vendors here in the U.S. focus on toys, gumballs or cheap hard pressed candy to get the margin needed. But toys can be sold for 50 cents to a dollar. Flat vending tattoos and stickers can also be sold for 50 cents to 75 cents. But we do have one thing in common and that is to have a maximum 20% to 25% product cost (or a 75% to 80% minimum margin). Maybe a Canadian vendor can give better comparisons since they may have a more similar currency (dollar coins) and economic/political system. Just my opinion!!

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