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The economics of vending machines

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Re: The economics of vending machines

#161

Post by rightbyte »

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.

But you subtracted the wage if I remember correctly. I would consider the wage as a profit.

Re: The economics of vending machines

#162

Post by notahacker »

mauvehaus wrote: post #95
biztos wrote: post #83

Earlier quoted context omitted.

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.

That's an amazing bit of indirection that both spares them having to update the machine and let's them change the price without reconfiguring the machine. Just like subway tokens.

Also in theory allows them to ensure that only people over the legal smoking age can use the machine

Re: The economics of vending machines

#163

Post by AQXt »

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.

Assuming a time to restock of 30 minutes per machine, it would still require a workload of 90+ hours per week.

I guess a team of two could do that.

Re: The economics of vending machines

#164

Post by prostoalex »

subsubzero wrote: post #92
ZephyrBlu wrote: post #4

The juice doesn't seem worth the squeeze. 40% margin, maybe less and you need a shit ton of machines to make decent money. You also have to restock all the machines, so it seems like a difficult business to scale that actually gets harder the larger scale you are. 250 machines with 500k in revenue for 2 people doesn't seem like that much. With 40% margins, that's 200k and assumes you have no employees which seems unl…

I'd agree, but its one case study. One of my best friends told me recently he has about 150 vending machines(in the sf bay area), he is the silent partner, providing capitol and his other partner does the stocking and collecting/refilling of coinage. I didn't want to pry into how much he was making but after reading this article it seems like it could be a lucrative side business for a non tech employee. (he is a man…

Seems like a partnership like that would be based on unconditional trust.

If the other partner is responsible for restocking and collecting the cash, you have to take their word that revenues are what they claim.

Re: The economics of vending machines

#165

Post by lorenzhs »

biztos wrote: post #83
cfmcdonald wrote: post #66

Earlier quoted context omitted.

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.

No they're still very common here. There are at least three within a 50m radius of my front door (inner city). Someone made a map of cigarette vending machines tagged in OSM in Dresden: http://ubahnverleih.de/osm/zigaretten/

Re: The economics of vending machines

#166

Post by Tor3 »

mullen wrote: post #122
cehrlich wrote: post #109

Earlier quoted context omitted.

Alcohol vending machines are rare, but still exist. There’s one outside of my in-laws house (rural Shiga-ken).

Even though I do not drink alcohol, I loved seeing Alcohol vending machines in Japan. A couple of hotels we stayed at had alcohol vending machines and I thought it was so awesome we were in a society where the trust level was so high that you could leave alcohol vending machines out in a public space and it did not cause trouble. In America, that vending machine would last a couple of hours at most.

In most countries outside of Japan any vending machine wouldn't last.. the only place I still see them in my own country is inside airports and the like. The vending machines disappeared from outside years ago when some people started breaking them to get at the money.
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