1st machine purchase advice

[Pizz]

I'm considering getting started in full line by purchasing one machine that is on location. He is asking $1550.00. What advice can you guys give me? Is this a good deal? He's not sure of the make or model but it's 4 years old, it seems to me he jumped in and decided it was not for him so is selling. Any advice would be helpful

[G-man422]

Seems high to me.  I'm noit sure of the model.  There should be a plaque on the side with info (model #, etc).  Call the number, get the info, and compare it to others on the net.

[coinvestor]

That looks like a GF32 and a CD6 Drink machine made by wittern. IF he bought the machines 4 years ago then he bought them as refurbs. They look like about 1999 models, but check the serial number for age.

What are the gross sales numbers?

 

Jeremiah

[Pizz]

The machine is located in a factory with 20-25 workers. He says it does about $150 ever 2 weeks (Im lowballling it a bit abd say he brings in about 100-120)He pays no commisions to the owner. What is a good offer on this?

[frntrange]

The machine is located in a factory with 20-25 workers. He says it does about $150 ever 2 weeks (Im lowballling it a bit abd say he brings in about 100-120)He pays no commisions to the owner. What is a good offer on this?

Looks a GF32/CD6 combo to me too. $1550.00 for this pair is a little high if bought outright, but for a located pair, maybe not so bad. Let's look at return on investment to see if you can pay it off in one year or less.

I usually do cash-on-cash ROI analysis, as today's cash is what I am investing. So, total investment is $1500.00 (hopefully including current inventory and coin escrowed in the coin mech). Gross profit (at 50% cost of goods sold) at $300.00 per month sales = $1800.00 return first year. Cash-on-cash ROI is $1800.00/1550.00 = 116%

116% is a pretty good number and I would be interested if everything else was ok, distance, condition of equipment, analysis of what is selling, etc. You say that he says $100-120, but you are lowballing. Does he have any sales figures to share? If not, how about purchases of product? Can you talk to some of the employees and get a feel for whether or not the seller has been taking care of them? Is the location owner willing to sign a placement agreement? (It might not mean much legally, but it helps to nail the equipment down just on principal anyway)

One small piece of advice, don't overstock this big a machine until you know what will sell, as it's easy to end up with outdated product. Put 5 or 6 items in a row and keep careful inventory of what sells, and what doesn't. Crank up the numbers on what sells, try something else for those that don't.

If I were looking at this deal, the $$$ above would indicate a profitable location. I would make a list of the negatives, and if I was able to live with them or fix them, probably purchase this location. What are some of the negatives? (varies by vendor, not all will agree)

1. Small employee count

2. 12 oz cans only, no bottles

3. Possibly too many snack selections for small employee count.

4. Older machines

5. Who will fix them? (I do my own repairs, are you able to?)

6. Any others?

Watch the serial numbers, if the serial number starts with a 11xxxxxx, it was built new, look at the last 5 numbers to determine date, for example, 05219 would mean built on the 219th day of 2005. If the serial number starts with a 7,8, or 9, it's a refurb. (which isn't necessarily bad).

Good luck to you!

Steve