Vending Machine Business PlanHow does a location commission change machine contribution?
A percentage commission removes a share of every eligible sale; a fixed fee removes the same amount even in a weak sales period. Agree on the base first. Our calculators apply percentage commission to net product sales before collected sales tax, without deducting stock or processing costs from that base.
The contract might use another base, minimum guarantee or tier. Translate the signed terms before using this simple calculation. Do not enter a minimum guarantee as both an additional fixed fee and a replacement for percentage commission unless the agreement really charges both.
The worksheet below assumes $1,000 net sales, $400 consumed stock and $40 card processing over 28 days. It holds volume constant so you can see the fee effect. A commission does not itself establish demand or a location’s quality.
| Commission on net sales | Location commission | Contribution before route / fixed fees |
|---|---|---|
| 0% | $0.00 | $560.00 |
| 10% | $100.00 | $460.00 |
| 20% | $200.00 | $360.00 |
Compare a fixed charge on the same basis
A $50 fixed charge and a 10% commission are equal at $500 eligible sales because $50 / 0.10 = $500. Below $500, the percentage charge is smaller; above $500, the fixed charge is smaller. This crossover ignores differences in exclusivity, contract length, utilities, access, cancellation rights and service obligations. Their value can outweigh the fee difference.
At $1,000 sales and 10% commission, contribution is $460 before route and fixed costs. If route cost is $150 and other operating costs are $100, operating profit is $210. A separate $50 fixed location fee reduces it to $160. That final result still excludes depreciation, financing and income tax; it is not cash available for an owner distribution.
Use a contract review worksheet
- Write the exact fee base: sales tax, refunds, failed vends, discounts and chargebacks need explicit treatment.
- Identify who provides electricity, water, network service and site access, and who pays their bills.
- Record percentage, fixed fee, minimum and timing separately. Confirm whether a minimum replaces or supplements the percentage.
- Set the reporting period and the evidence used to reconcile sales.
- Record removal rights, notice period, damage allocation and access restrictions; obtain appropriate local advice for the actual agreement.
The pricing calculator solves the price needed after the entered percentage base and processing charges. The placement break-even tool tests fixed-cost coverage and sellable capacity. Neither interprets a legal agreement or models tiered commissions.
Download the machine-location contribution worksheet to compare fees alongside stock, route and maintenance rather than choosing from headline sales alone.
