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The economics of vending machines

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Re: The economics of vending machines

#61

Post by mc32 »

pjc50 wrote: post #55
codeulike wrote: post #30

Earlier quoted context omitted.

Yes I thought that when I visited. A vending machine on the streets of a UK city full of beer and cigs wouldn't last 3 minutes.

Railway stations in the UK used to have cigarette vending machines, back before smoking ban.

Not sure about the UK but in the US when there used to be cig vending machines it would be under the supervision of staff, so like in a bar.

In Japan they are out in the open in non descript corners and alleyways, although there is usually a streetlight.

Re: The economics of vending machines

#62

Post by howlgarnish »

mc32 wrote: post #61
pjc50 wrote: post #55

Earlier quoted context omitted.

Railway stations in the UK used to have cigarette vending machines, back before smoking ban.

Not sure about the UK but in the US when there used to be cig vending machines it would be under the supervision of staff, so like in a bar. In Japan they are out in the open in non descript corners and alleyways, although there is usually a streetlight.

They do require a "tobacco passport" to operate, which aims to make it harder for kids to buy them: https://en.wikipedia.org/wiki/Taspo

Then again, this is the same country where it's sufficient to self-certify by tapping a button that you're over 18 when buying hard liquor at the 7-11.

Re: The economics of vending machines

#63

Post by de_Selby »

howlgarnish wrote: post #17

Surprised to see no mention of Japan in the comments. As any visitor can attest, the country has way more vending machines than anywhere else I know of, and in way more categories. Soft drinks, tea (hot and cold), coffee, beer, hard liquor, tobacco, snacks, ice cream, rice, toiletries, even the semi-apocryphal used panties. The article below outlines some reasons why, but it seems to boil down to high cost of labor &…

Climbing Mt Fuji in Japan is a reasonably serious climb (for ordinary people). At 3600m you need to think about altitude acclimitisation and it's best to sleep overnight on the way up.

The achievement is only undermined by the fact that there is a literal queue of people in front of you for the entire ascent, and by the fact that after completing the climb you are greeted with a vending machine at the summit!

Re: The economics of vending machines

#64

Post by dylan604 »

namdnay wrote: post #40
em500 wrote: post #19

Earlier quoted context omitted.

There are lots of weird and wonderful vending machines around the world: https://www.straitstimes.com/singapore/live-crabs-and-lego-s...

There are cheese vending machines in several towns in the Alps: https://www.filbing-distribution.com/s/cc_images/cache_60041... Quite useful actually, avoids long queues on Sunday morning when everyone wants to pick up some cheese on the way home

Sunday morning...on the way home? What cultural thing that I'm not aware of would the population in mass be coming home...(church?) that would cause such a large queue at the cheese shop?

Re: The economics of vending machines

#65

Post by crispyporkbites »

callamdelaney wrote: post #33
crispyporkbites wrote: post #15

Earlier quoted context omitted.

This line doesn’t line up with the data also in the article. The gross margin on each product is about 40%, you then lose 15-25% on stocking the machines, plus have to pay for gas, a car, insurance, repairs, initial outlay of machines etc. You’re getting maybe 5% net margin.

> you then lose 15-25% on stocking the machines What? How've you come to that conclusion?

Sorry I meant on paying the owner of the place you’re putting the machine

Re: The economics of vending machines

#66

Post by cfmcdonald »

mc32 wrote: post #26
howlgarnish wrote: post #17

Surprised to see no mention of Japan in the comments. As any visitor can attest, the country has way more vending machines than anywhere else I know of, and in way more categories. Soft drinks, tea (hot and cold), coffee, beer, hard liquor, tobacco, snacks, ice cream, rice, toiletries, even the semi-apocryphal used panties. The article below outlines some reasons why, but it seems to boil down to high cost of labor &…

It also helps that it’s a high trust society and you don’t get a lot of delinquent kids breaking in to get cigs or beer. Obviously cameras help with that.

The U.S. used to have cigarette vending machines. I believe they were phased out due to the desire to enforce age limits for smoking more strictly, not because of theft.

My general impression is that the U.S. used to have more vending machines in general ~30-40 years ago. I remember soda machines being outside of every grocery store, but I don't see that anymore. Newspaper vending machines also used to be common. But I don't have any data to back that up.

Re: The economics of vending machines

#67

Post by dylan604 »

ryanmarsh wrote: post #21

Also, ATM machines. When my daughter was sick with cancer ten years ago I was a contractor. I couldn’t put in enough hours because I was always at the hospital with her. The handful of ATM’s I owned at the time allowed us to keep paying our bills. Cash isn’t as common now (pre-COVID), and even less so post, but my guess is there’s still money to be made in some parts of the world. ATM machines are cheap, about $1,500…

I would have assumed that strip clubs owned/operated the ATMs inside their clubs. Why not make that much more money from their customers?

When recreational marijuana became legal in CO, the ATMs close to the shops were always out of cash because they only dispensed $20 bills when everyone was trying to pull out $300-$400 at a time. The smart ATM owners started dispensing larger denominations to avoid the Out of Cash problem

Re: The economics of vending machines

#68

Post by sogen »

cfmcdonald wrote: post #66
mc32 wrote: post #26

Earlier quoted context omitted.

It also helps that it’s a high trust society and you don’t get a lot of delinquent kids breaking in to get cigs or beer. Obviously cameras help with that.

The U.S. used to have cigarette vending machines. I believe they were phased out due to the desire to enforce age limits for smoking more strictly, not because of theft. My general impression is that the U.S. used to have more vending machines in general ~30-40 years ago. I remember soda machines being outside of every grocery store, but I don't see that anymore. Newspaper vending machines also used to be common. But…

yes, there were more vending machines:

https://www.atlasobscura.com/articles/vending-machines-snack...

Re: The economics of vending machines

#69

Post by 082349872349872 »

kzrdude wrote: post #39
skelseys wrote: post #34

Earlier quoted context omitted.

This article seems to suggest that there's lots of small players competing over marginally profitable locations. There's also a negative externality which can lead to these people destroying their whole business: as people compete over machines that don't make much, they cut costs by not refilling as often and not maintaining the machines. This means that the general level of trust in these machines goes down. After…

This suggests that the machines should use clearer branding, but it needs to be a brand that combines maker + operator.

We have a nationwide vending machine brand, with 900 employees for 27'000 machines and full or partial service options.

Re: The economics of vending machines

#70

Post by andjd »

lordnacho wrote: post #10
zxcmx wrote: post #9

Earlier quoted context omitted.

It's good money for something accessible to almost anyone. It doesn't require much capital, doesn't seem very regulated and needs no deeply specialised skills to get started. No franchise. No middleman or supplier lock-in. No fixed rental payments. Easy to pull in friends & family labour if you need to scale, and if you miss restocking it's no biggie. Nobody yelling at you. Flexible hours. Rarely have to talk to peop…

If anything you should be surprised such a thing is profitable, it's a textbook case of "the free market should have squeezed profits to zero".

Slightly pedantic comment here, but in economic theory, even in a perfectly competitive market, profits never drop to zero. Profits need to be high enough that owners of an enterprise don't decide to do something else with their time and money. These businesses may not make enough in profits to attract venture capital, but that doesn't mean they aren't more lucrative to the people running them than their other options.
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