When I started in vending, I thought profit was simple: sell a $2 item that cost me $1, pocket the difference. Easy money, right?
Then reality hit. Gas costs added up. Products expired. Card readers took their cut. Commissions ate into margins. That $1 profit per item turned into $0.40 real quick.
Understanding these hidden costs is the difference between a profitable vending business and one that barely breaks even. Let me break down every expense you need to track.
The Hidden Costs Nobody Talks About
Gas & Transportation
Every service trip costs money. The further apart your machines, the more you spend on gas. A scattered route with 10 machines might cost $200/month in gas, while a tight route costs $80.
How to minimize: Cluster your locations geographically. A 5-mile radius is ideal. Say no to locations that don't fit your route.
Your Time
Time is your most hidden cost. If you spend 2 hours servicing a machine that makes $80/month profit, you're earning $40/hour. But if that same machine takes 4 hours because it's far away and breaks often, you're at $20/hour.
How to minimize: Track time per machine. Cut locations that take too long for too little return.
Card Processing Fees
Card readers increase sales by 20-35%, but they take a cut. On a $2 sale, you might pay $0.10-0.20 in fees. That adds up when 60%+ of your sales are cashless.
How to minimize: Shop around for processors. Nayax, Cantaloupe, and others have different fee structures. The increased sales usually outweigh the fees, but track it.
Location Commissions
Many locations want a cut. A 15% commission on a $500/month machine is $75 gone. That's often your entire profit margin on a mediocre location.
How to minimize: Negotiate hard. Start at 10% and only go higher for proven high-traffic spots. Some locations (small offices, laundromats) don't require commission at all.
Spoilage & Expiration
Products expire. Chips go stale. Candy melts. If you're not rotating stock properly, you're throwing money away. A $50/month spoilage problem across 10 machines is $500/year.
How to minimize: FIFO (First In, First Out) religiously. Track expiration dates. Don't overstock slow-moving items.
Repairs & Maintenance
Machines break. Coin mechs jam. Bill validators fail. Compressors die. Budget for it or get surprised. A major repair can cost $200-500.
How to minimize: Buy quality machines. Learn basic repairs yourself. Keep spare parts on hand. Preventive maintenance saves money long-term.
Insurance
General liability insurance protects you if someone gets hurt or your machine damages property. It's not optional—one lawsuit can end your business.
How to minimize: Shop around annually. Bundle policies if you have other business insurance.
Theft & Vandalism
Some locations have theft problems. Products disappear. Machines get broken into. It's rare but real.
How to minimize: Vet locations carefully. Avoid high-crime areas. Use security cameras if the location allows. Cut problem locations quickly.
The Real Cost Breakdown
Let's look at a realistic example. Say you have a machine doing $500/month in revenue:
- Cost of goods (45%): -$225
- Commission (15%): -$75
- Card fees (6% of 70% card sales): -$21
- Gas/transportation: -$25
- Spoilage (2%): -$10
- Repairs (averaged): -$15
- Insurance: -$10
Actual profit: $119/month (23.8% margin)
That's a far cry from the 50%+ margins people imagine. And this doesn't account for your time.
How to Track These Costs
You can't improve what you don't measure. Here's what to track:
- Log every expense. Gas receipts, inventory purchases, repairs—everything.
- Track per-machine. Know which machines are profitable and which are dragging you down.
- Calculate true profit monthly. Revenue minus ALL costs, not just product cost.
- Review quarterly. Cut underperformers, double down on winners.
Spreadsheets work, but they're tedious. That's exactly why I built VendHub—to make tracking all of this automatic and actually useful.
See Your Real Profits
VendHub tracks revenue, expenses, commissions, and more—so you always know exactly what each machine is actually making.
The Bottom Line
Vending can be profitable, but only if you understand and control your costs. The operators who succeed aren't the ones with the most machines—they're the ones who know their numbers inside and out.
Track everything. Cut what doesn't work. Optimize what does. That's how you build a vending business that actually makes money.