Vending Commissions—What Good Are They?

Most vending machine operators acquire locations by offering proprietors the best deal in terms of service and commissions. Commissions are a small portion of vending machine profits that are given to the proprietor for the exclusive right to place a vending machine in the location. Most vending operators earn 3.8% return on assets (ROA). This means that the standard 7% commission tends to be a financial drain. As an Antares vending machine operator you can decide to do away with the commissions.

Doing away with commissions does not mean that the financial burdens of a struggling vending machine operator would be solved. The top 25% of all vending machine operators earn an average 22% ROA and usually pay higher commissions than the lower 75% of vending machine operators. As an Antares vending machine operator, first ensure that your anticipated profit will cover your return on assets requirements. Any expected vending machine profit beyond the ROA can be offered as commission.

With a 22% ROA, in 10 years an invested $1 million would become over $6 million! Returns this high would not last in a free economy. Instead of commissions, an Antares vending machine operator should find ways to invest their money to retain their clients, like maybe offering other incentives.

Antares vending operators can increase their share of vending machine market by offering higher commissions. An increase in commission rates can be covered by a unit price increase in vending products. Increasing vending machine prices and commission rates usually pleases proprietors who will eventually more than double their profits. By increasing the prices of your products, the sales would usually drop at first. After some time they would come up again once the customers adjust to the new prices. An increase in unit prices also means that each machine serviced will have higher revenues and profits.

Commissions are not the Achilles heel of vending machines. Instead, they are a tool that can be used by savvy Antares vending operators to increase their market share. Operators who are finding it hard to pay commission rates because of low ROA, should look at their overall management.