Pricing isn’t complicated.
But guessing will cost you.
Early on, I learned that revenue doesn’t mean much if the margins aren’t there. You can sell a lot and still feel stuck if there’s nothing left after expenses.
Here’s how I think about pricing.
I Start With My Numbers
I don’t look at the machine down the street or the convenience store first.
I look at:
Product cost
Commission
Card processing fees
Labor
Spoilage
If the numbers don’t work on paper, they won’t work in the machine.
Once I know my costs, I price to protect the margin. Then I look at the market.
Every Product Has to Earn Its Spot
If an item doesn’t hit my margin target, it doesn’t stay.
Simple.
I’m not emotional about products. If something costs too much and I can’t support the price it needs, I replace it.
Shelf space is valuable.
Commission Changes Everything
If I’m paying commission, that’s built into the price from the start.
You can’t price first and “figure it out later.”
The supplier gets paid.
The processor gets paid.
The location gets paid.
What’s left is yours.
Make sure there’s enough left. My margins currently range 30-35% after all expenses
Different Locations, Different Sensitivity
Schools are more price-sensitive.
Offices usually aren’t.
Public spots depend on traffic and convenience.
But I don’t underprice out of fear.
A small price increase rarely kills a location. Weak margins will.
I’d rather have slightly lower volume at healthy margins than grind for sales that don’t move the needle. Low margins will run you out of business if anything happens.
When I Adjust Prices
I raise prices when costs go up.
Product costs change. Processing fees change. Commission changes.
I adjust and move forward.
This is a business. It has to make sense.
What I Avoid
I don’t:
Constantly change prices
Copy competitors blindly
Undercut just to land a deal
Ignore margins to look busy
Busy doesn’t mean profitable. Volume doesn’t mean cash flow.
The Point
Pricing isn’t about squeezing every dollar out of a machine.
It’s about making sure each machine supports itself and contributes to growth without scaring your customers from purchasing.
Strong margins give you room to hire.
Room to expand.
Room to breathe.
If you’re unsure about your pricing, don’t ask what others charge.
Start with your numbers.
Then price with confidence.
If this resonated with you, you’d fit well inside Vending Circle.
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