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The economics of vending machines

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Re: The economics of vending machines

#81

Post by wenc »

de_Selby wrote: post #63
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!

Like most people, my first thought was "how do they restock those machines?"

Turns out the summit of Mt Fuji has civilizational amenities, and there's actually a vehicle that goes up to the summit via a trail.

https://www.flickr.com/photos/182302882@N05/48439659072/

Re: The economics of vending machines

#82

Post by opportune »

I find it interesting that the operators are buying from Sam’s club rather than a legit wholesaler. $0.50/unit for soda is ridiculous

I looked into this a few years ago because someone on reddit wrote a long post about I couldn’t find. The ROI looks amazing until (as the article alludes) you look into how much labor is required to keep the operation going. It kind of works if you have capital and your time has low opportunity cost.

I think the smart way to do it would be to start a franchise that provides machines with financing, acts as a wholesaler, etc so you can take a cut of the operation with less capital investment and less driving around to actual machines. But then that starts looking like an MLM...

Re: The economics of vending machines

#83

Post by biztos »

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…

I remember the cigarette machines from my youth. I was amazed that something so forbidden (I was a kid, and my parents didn't smoke) was available in restaurants if you were just bold/sneaky enough.

In Germany there are bars that still have them, but I think they're pretty rare now even there. The one used by one of my friends who smokes a lot even requires old DM coins, which you can get at the bar.

Re: The economics of vending machines

#84

Post by iudqnolq »

andjd wrote: post #70
lordnacho wrote: post #10

Earlier quoted context omitted.

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 option…

Even more pedantic, but in economic theory in a perfectly competitive market (edit: at equilibrium) economic profit exactly equals zero. This is because the owner not doing something else with their time (called opportunity cost) is accounted for as a cost. What you're describing would be called "accounting profit" instead of "economic profit" by an economist to specify it only takes into account costs on the books, not opportunity costs.

Edit: See https://en.wikipedia.org/wiki/Zero-profit_condition

Re: The economics of vending machines

#85

Post by samcheng »

ComputerGuru wrote: post #71
xyzzy_plugh wrote: post #57

Earlier quoted context omitted.

If North America was speckled with machines vending hot canned coffee, I would use them far more often than e.g. Starbucks. I drank so many Boss coffees last I was in Japan, they're so convenient -- no line, not too-hot-to-drink, open 24/7, such as in the early dawn. Just a wonderful thing.

I’m not sure what you refer to as early dawn, but here in the Midwest all Dunkin’ Donuts and many Starbucks are open at 5am. Side note: it blows my mind each time I’m in California and I have to drive forty five minutes or more to find a Dunkin’.

LA is known for their many donut shops, mostly owner-operated. https://time.com/longform/national-doughnut-day-photos/

Here in the Bay Area I have a 24-hour donut shop about a quarter mile away. I have been making a point to patronize them, so they survive COVID.

Dunkin' Donuts pulled out of California, and is shrinking nationally. There are much better options out there if you look...

Re: The economics of vending machines

#86

Post by klodolph »

ComputerGuru wrote: post #71
xyzzy_plugh wrote: post #57

Earlier quoted context omitted.

If North America was speckled with machines vending hot canned coffee, I would use them far more often than e.g. Starbucks. I drank so many Boss coffees last I was in Japan, they're so convenient -- no line, not too-hot-to-drink, open 24/7, such as in the early dawn. Just a wonderful thing.

I’m not sure what you refer to as early dawn, but here in the Midwest all Dunkin’ Donuts and many Starbucks are open at 5am. Side note: it blows my mind each time I’m in California and I have to drive forty five minutes or more to find a Dunkin’.

Dunkin’ Donuts barely has a presence on the west coast, you are probably better off looking for local chains.

Just playing around with Google Maps I could see about 10 Dunkin’ Donuts in the SF bay area (pop 8 million), and about 20 Dunkin’ Donuts within the Kansas City limits (pop 500,000). I couldn’t find any Dunkin’ Donuts in the Portland or Seattle areas but I didn’t look very hard. My impression is that the folks living in the PNW would regard Dunkin’ Donuts as some kind of foreign intruder.

There are plenty of coffee shops open at 5am, speaking from experience living on the west coast, but if you are particular about getting Dunkin’ Donuts specifically you will usually have to drive farther, on account of them not really being a west coast phenomenon.

Now that I live on the east coast I can see a Dunkin’ Donuts spaced about every quarter mile, and I can only imagine what kind of hysteria led there to be so many of them so close together.

Re: The economics of vending machines

#87

Post by [deleted] »

ComputerGuru wrote: post #71
xyzzy_plugh wrote: post #57

Earlier quoted context omitted.

If North America was speckled with machines vending hot canned coffee, I would use them far more often than e.g. Starbucks. I drank so many Boss coffees last I was in Japan, they're so convenient -- no line, not too-hot-to-drink, open 24/7, such as in the early dawn. Just a wonderful thing.

I’m not sure what you refer to as early dawn, but here in the Midwest all Dunkin’ Donuts and many Starbucks are open at 5am. Side note: it blows my mind each time I’m in California and I have to drive forty five minutes or more to find a Dunkin’.

[deleted]

Re: The economics of vending machines

#88

Post by NikolaeVarius »

de_Selby wrote: post #63
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!

Thats about 12,000 feet. You dont need altitude acclimatization for that, it'll just suck a decent bit more than normal. I just went backpacking at 13k+ feet without any prep, it was fine outside of needing to take more breaks.

Re: The economics of vending machines

#89

Post by biztos »

greggman3 wrote: post #60
Tor3 wrote: post #20

Earlier quoted context omitted.

I counted 16 vending machines side-by-side outside a random shop I visited in "my" town (the town where I stay when I'm in Japan). And yes they're everywhere. I appreciated them particularly the first couple of years I visited, as at that time shops insisted on you paying as accurately as possible, they tended to refuse accepting banknotes if that implied returning a lot of coins. Strange thing, and that has since ch…

Been here since 98, never ran into the issue of not being able to pay with banknotes because of returning lots of coins. In fact quite the opposite. Go into a convenience store, buy a pack of mints for $1.04 (104 yen) hand them an $100 bill (10000yen) no one blinks an eye. Most convenience stores in the USA won't accept $100 bills AFAIK. I can see if it was some tiny store and they couldn't make exact change then yes…

In Thailand I began to wonder how much trade the 7-11's do just from foreigners needing to break large bills, where "large" was 100 THB or more (3.20 USD).

Being an American tourist, I always felt guilty about it and would make sure to buy at least a hundred baht of goods if I was breaking a thousand, but I'm pretty sure it was standard to buy a 7-baht bottle of water and calmly collect your 993 baht in change.

Re: The economics of vending machines

#90

Post by toast0 »

Cthulhu_ wrote: post #45
zxcmx wrote: post #11

Earlier quoted context omitted.

Agree. Also surprised it hasn't been feudalised somehow. Some company owning all the machines and then uber-ing out the hard work of siting them and restocking them. Gamifying the process of monitoring, "your fleet", the "ching" on your phone when someone buys a bottle of water or candy bar. Special deals for site owners. Branded supplies. An app for customers to talk to the vending machine. Loyalty points. A snack r…

I dunno, I'm fairly sure Coke machines are all owned / franchised by Coca Cola; after all, you can't just use their brand on the outside of your machine. I think.

I've seen plenty of branded machines for sale at auctions and craigslist. They may have been connected to Coca Cola at one point, but they aren't necessarily connected now.
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