The economics of vending machines • Hacker News Board

Re: The economics of vending machines

#141

Post by DoreenMichele » Mon, Oct 05, 2020, 9:18 PM UTC

The article doesn't cover a scenario I am familiar with: If you own your own small business doing something else and also have one or more vending machines to help make that work.

Growing up, I knew a guy named Clark. He ran a barber shop and he drove a school bus and he did leather work in the back room of his barber shop during slow times and he had a soda machine in his barber shop.

Restocking was a matter of getting bottles of soda out of stacks of supplies in the back room where his leather working stuff was. I know because my parents had a store next door for a while and I sometimes restocked his machine when he was too busy to get to it just to have something to do while bored out of my mind hanging at my parent's store.

I wrote about that once, probably badly:

https://noonegoesthereanymore.blogspot.com/2020/06/clarks-ba...

Re: The economics of vending machines

#142

Post by rconti » Mon, Oct 05, 2020, 9:28 PM UTC

zxcmx wrote: post #11

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".

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 would imagine locations are somewhat "sticky". Your local auto repair shop isn't interested in booting their vendor for another one that charges 65c for a soda instead of 75c, as long as they're not getting bad service. And they're not interested in the conflict and confusion of allowing a 2nd operator to put a competing machine right next to it at a slightly lower price.

Re: The economics of vending machines

#143

Post by hondo77 » Mon, Oct 05, 2020, 9:34 PM UTC

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’.

> ...it blows my mind each time I’m in California and I have to drive forty five minutes or more to find a Dunkin’.

It blows my mind that anybody would drive 45 minutes to find a Dunkin' in CA when local donut shops are everywhere and they are so much better (granted, Dunkin' is a pretty low bar).

Re: The economics of vending machines

#144

Post by dingaling » Mon, Oct 05, 2020, 9:36 PM UTC

kpommerenke wrote: post #108

deadmetheny wrote: post #58

Earlier quoted context omitted.

This is a bit myopic - $200k for two people for what's basically a no-skill gig is a pretty decent income in most of the country. At that scale it's not a side gig anymore, it's your primary income, and I can imagine the hours are probably comparable to a normal job. And really, I can think of way less appealing jobs that pay worse with less flexibility.

It's not really $200k in income. That number ignores the initial investment (and thus its associated cost of capital) as well as the economic depreciation of the machines (since you have to replace them after, say, 25 years). As I calculated in a different comment, the actual economic profit is negative.

If you're considering depreciation then you don't need to account for the initial imvestment, just the financing costs thereof. You're adding an asset and depreciating it, rather than considering it as 'money spent'.

Re: The economics of vending machines

#145

Post by rconti » Mon, Oct 05, 2020, 9:40 PM UTC

NikolaeVarius wrote: post #88

de_Selby wrote: post #63

Earlier quoted context omitted.

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.

It just depends. I live at sea level in the bay area but regularly spend a week at a time at 8000ft near tahoe. I've never thought twice about it.

When we went to Peru, we flew in to Cusco which is around 11,000ft which seems like "not that much higher"; however, the decrease in pressure and O2 content is exponential, the the transition between "no problems" and "some problems" may be abrupt. My wife is fitter than I am, but seemed to have had more issues on our first few days, despite us both taking Acetazolamide (although we didn't bother until after arrival).

Another factor is that speed of ascent factors into onset of sickness; flying in to a high altitude can be worse than ascending over a period of days, as it takes time to acclimate.

Physical fitness doesn't seem to have a lot to do with how a given person will respond to altitude. I believe women and older people are slightly more likely to respond poorly, but it's kind of a crapshoot.

We hiked over 15,000ft but it definitely sucked at times -- tingly hands and feet related to the drugs, I believe.

Funny thing was, after > 1 week at that altitude, we both stopped taking our drugs the morning of our departure. Our flight was delayed by a few hours and by 1pm I started feeling the onset of symptoms again, wishing I had taken my dose that morning.

Re: The economics of vending machines

#146

Post by smogcutter » Mon, Oct 05, 2020, 9:46 PM UTC

ctack wrote: post #119

smogcutter wrote: post #117

Earlier quoted context omitted.

The problem is that dividing owning the capital (of the machines) and performing the service doesn’t really make sense in this circumstance. This isn’t a situation where you’re creating efficiency by specializing. What does the servicing company need you for? If all you do is own the machines, they can do that themselves without complicating their business at all.

You’re sourcing the location.

That works if you own the location, otherwise it isn’t anything the servicing company couldn’t do just as well. Plus they’re more likely to have relationships with property managers, office managers, etc. Double plus, your costs would include the servicing company’s profit margin. So by definition their costs are lower, which gives them room to offer location owners a better deal than you can.

Re: The economics of vending machines

#147

Post by slingnow » Mon, Oct 05, 2020, 9:48 PM UTC

jamesskarzynski wrote: post #91

I tried this a few years ago and I can really attest to just how awful an idea buying a used machine is. I found a decent condition one on craigslist for $100. I bought it, and it's been stuck in my garage for 2 years now. I must have gone through $200 of parts just trying to get the bill collector to work, and it still doesn't. It would be at least a few hundred more to bring it to a place that can fix it. If you're…

I think the awful idea is paying $100 for something that costs well over 20-30x that cost new, according to the article, and expecting it to work without investing a significant amount of time and money.

Re: The economics of vending machines

#148

Post by commonturtle » Mon, Oct 05, 2020, 9:48 PM UTC

Really interesting article. Still two questions about the economics that I don't understand:

1/ Why no economies of scale? Why aren't there companies that own 100k machines throughout the country?

2/ Why don't the venues run their own vending machines?

Re: The economics of vending machines

#149

Post by SCNP » Mon, Oct 05, 2020, 9:55 PM UTC

antasvara wrote: post #59

TwelveNights wrote: post #52

Earlier quoted context omitted.

The only thing missing in OP's calculation is the cost of employees. Maintaining a fleet of 250 vending machines alone doesn't seem very possible.

If we assume that the restock is 3 times a month (close to the once every 2 weeks that was mentioned in passing), that leaves around 25 visits per day. If they're in close geographic proximity, that seems like it might be doable.

It would also be a lot easier if the majority of your machines were identical. The majority of vending machine products have a LONG shelf-life. So if you stock a truck with all of the things that all of your machines carry, you don't have to take the step that the article alluded to where you take stock and then go get the supplies. You'd just have all the possibilities on hand and restocking the truck only happens maybe once a week once you get a good idea of the flow of the individual products. It seems very feasible to me that 2 people could service that many machines. Especially if you're willing to work 12-16 hour days some days.

Re: The economics of vending machines

#150

Post by dingaling » Mon, Oct 05, 2020, 9:57 PM UTC

Tor3 wrote: post #20

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 &…

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…

We used to have to acquire large numbers of quarters to do our laundry in the USA, and the easiest way was to feed a $5 bill into a vending machine and press the 'reject' button. Clunk clunk clunk clunk...