Locations Dictating Price

[Hillbilly]

Do any of you guys have locations or contracts with locations that dictate what the selling price will be?

The reason I ask is that while at the movie theater last night I noticed the Tomy Gacha machines in the lobby. The price points were all $1.00 but there were items that I've had to do at .50. I know that everything in the theaters is overpriced but this was stuff I had trouble selling at .75 and had to do at .50 to get rid of it.

I was just wondering if the theater is the one dictating the price.

[Jax Snacks]

Well I am just speculating... It is more likely that the theater is dictating a high commission! Thus the need to sell 50 cent items at a dollar. There is probably a vending management company (like Pelican) also in the middle that gets a hefty cut as well.

Speaking of high prices. The last movie I went to cost me $10 for a Coke and pop corn! But I just had to have it, since that is a movie-watching tradition for me!

[havending]

Another reason could be that all he has is 1.00 mechs. That is all gacha machine came with. If you wanted .50 or .75 you had to spring fro them.

[lurtsman]

Another reason could be that all he has is 1.00 mechs. That is all gacha machine came with. If you wanted .50 or .75 you had to spring fro them.

Strong possibility. I've actually gone and pitched a theatre and got the GM down to talk vending. They had done it stupidly trying to simplify their overhead. They had over priced crap, but the commissions were huge and IIRC they were paid off gross.

For all new vendors: When you pay a large commission off gross, you over price your product. When you are paying (for instance) 50% off gross that's 25 cents out of 50. If the product cost you 15 cents (fairly standard for 2 inch, and my 1 inch costs half this) you'd find yourself out 80% assuming you had no sales tax applied to the industry. If your state legislature hates vending you may be out 45 cents of the 50. That's not reasonable. So, there is ZERO way to sell 2 inch for 50 cents in locations that demand high commissions off of gross sales. You have to charge 75 or 100, even if it reduced your gross by more than half. Assuming 10% of gross sales tax (which is about 11%) and a contract that ignored it if they signed up for 50 percent comm, on 1$ vend, they are looking at 10 cents of tax, 50 cents comm, and 15 of product. 75 cents used. Profit 25 cents vs profit of 5 cents. So you could have your sales go from 500$ to 100$ and you'd clear the same--not counting that you spend less time servicing on an extended cycle and your mech is turned less times. Note that both 10 of gross going to tax and 50 percent of gross are absurdly high for any location. Just showing a worst case scenario. The result frequently though is that sales don't drop off that dramatically. In most locations I move about the same in gross sales of 1 inch at 50 cents or 25 cents. When it is not the same, the 50 cent has HIGHER sales. The lower CoGs and service costs make it a clear winner. If I had absurd rates, I'd push it up even higher. From an economics perspective this is pure failure. A lower commission rate would lead to the seller using a lower price point and paying dramatically more in commission, as well as moving more product, the customers would get a better deal, the seller would get a better deal, and his supplier would have more business. This is also similar to the argument for reducing the tax rates. Economics, it isn't a zero sum game.