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how much money can you expect to make in this industry? Is it realistic to assume that a startup vending machine operator will generate profits
how much money can you expect to make in this industry? Is it realistic to assume that a startup vending machine operator will generate profits
- Assume the average new vending machine lasts five years and is treated with straight-line depreciation.
- Assume each machine is refilled twice per month and that it takes roughly two hours of direct labor each time.
- Most operating expenses are included in the article but you may want to add any important costs that are neglected.
- Ignore the following statement that appears in the article, which may be misleading: "All costs considered, an operator who makes $5k per month in revenue might take home something like $2k in profit." Your task is to independently figure out how much money can be made.
- General liability insurance (~$500/yr for <$100k in annual sales)
- Commissions paid to locations (5-25% of revenue)
- Transaction fees for card purchases (~5-6%)
- Card reader analytics fees ($10/mo)
- Storage space for unused machines (~$100/mo)
- Gas and transportation ($50-$100/mo)
- Taxes (10-37% of adjusted gross income)
- Routine maintenance and vandalism repairs ($50-$250/yr)
provide a quantitative analysis of the profit potential for a vending machine operator based on the information given above
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