In order to determine the best pricing strategy, let’s first look at what our current cost of goods are today and where the best place to buy the goods would be. People ask me all the time where the best place to buy product is, and the typical answer I give is “Sam’s Club or Costco”. Most of the items you will sell can be found at Sam’s Club or Costco. If it’s a rare item, then you may need to special order it, but if that’s the case, it will probably be too expensive to sell. I buy all my product at Sam’s because I don’t have to pay for shipping and because the prices are the best overall. Costco also sells great vending items, but I have found Sam’s to have a better selection.
At my local Sam’s Club in Colorado, I can buy all the popular candy bars for $0.52-0.55 cents, chips for $0.22-0.25 cents, 12 ounce soda pop cans for $0.31 cents, and 16 ounce soda bottles for $0.59 cents. The general rule in pricing your vending product is to charge 2-3 times more than the cost of the item. Therefore the general rule would make candy bars priced at $1.10, chips for $0.50 cents, soda cans for $0.65 cents and soda bottles for $1.20. Notice I rounded up to the nearest nickel. What I would do now is look at these items and see if these prices are really sellable at this price, and adjust them up or down according to what your market demands.
I would also see if we could make the price a quarter increment since more people prefer to work in quarters. For example, in our market candy bars don’t sell well for more than $1.00 so I would lower the price to $1.00. However, I can recoup the money lost on the candy bars by increasing the price of chips to $0.75 cents or even greater as our market demand allows it. I would also bump up soda cans to $0.75 cents and soda bottles to $1.25 since they are rounder numbers. In general, my prices are approximately two and a half times greater than the cost of the goods.
In the last five years we have seen the cost of fuel double, the cost of food has increased 10-20%, and labor costs have also been on the rise, with the cost of health insurance contributing greatly. However, vending operators have been reluctant to raise the prices on their product. Many are afraid that they will lose their account, or lose sales to their customers. Although these are valid fears, the reality is that they must raise prices in order to stay in business. It’s important to have a machine that can easily be adjusted. I recommend adjusting your prices every two years. At the Discount Vending Store, we sell all types of vending machines- some are easier than others to adjust the prices. The electronic vending machines are easiest to adjust and it can be done for each individual selection using the keypad, and can be accomplished in just a few minutes. The mechanical machines are more difficult. It requires removing the coin mech and taking it apart to change the price settings. This might take 5 minutes for each coin mech. The bulk candy machines are typically all set to one quarter, although most new machines on the market today are being equipped with a 50 cent coin mech to account for inflation. The best way to raise the price on your bulk candy machines is to either invest in a new coin mech to accommodate the 50 cent coin mech, or you can adjust the dispensing wheel to allow less product per vend. This may take a few minutes to perform, but in the long run, will be worth the time investment.