The vending machine industry has spawned numerous businesses with high profits, but machine placement--a process and expense known as location--can quickly eat into the income produced. With some knowledge about the vending industry and a professional approach, a proper vending machine location contract can be created to ensure profitability for all parties involved.
Some Locations Require Fixed Fees
In some locations, particularly hospitals and office buildings, managers or facilities personnel who approve the installation of a vending machine require a fixed monthly or quarterly fee to pay for "rental" of the machine's location. This fee varies depending on the type of machine installed, but typically ranges from around $5 per month for simple stand-alone machines, such as gumball machines, to as much as $50 per month for coffee and snack vending machines that require electricity or water.
Some Locations Take a Percentage
While some locations require payment of a fixed monthly fee, other locations are somewhat more flexible and will accept a predefined portion of the proceeds collected by the machines. Depending on the environment and type of business, the required percentage typically ranges from 15 percent to 25 percent of the machine's gross income. In some exceptional cases, a location owner may accept a percentage as low as 10 percent of the machine's gross income, though most location owners expect at least a 15-percent compensation.
Charity Sponsorships Can Reduce Expense
To help reduce the expenses paid for a vending machine location, some vending machine business owners secure a charity sponsorship. In a charity sponsorship, the vending machine owner makes a small donation--typically around $1 to $2 per month per machine--to the charity; in return, the charity organization provides a sticker for the machine proclaiming that a portion of the machine's income is donated to charity. While some business owners may still charge a location fee for charity machines, many charge a significantly reduced fee while others simply donate the space. This arrangement works well for all parties involved, as the location owner is perceived as donating to charity, the location expense is greatly reduced for the vending business owner, and the charity organization receives a much-needed boost in income.
Keith Evans has been writing professionally since 1994 and now works from his office outside of Orlando. He has written for various print and online publications and wrote the book, "Appearances: The Art of Class." Evans holds a Bachelor of Arts in organizational communication from Rollins College and is pursuing a Master of Business Administration in strategic leadership from Andrew Jackson University.