Basic Vending Machine Price Math

To establish minimum prices for your products, it is essential to perform basic mathematical calculations. As a starting point, I recommend marking up your prices by at least 110 percent. Through this approach, I have discovered that my margins typically reach around 60 percent by the end of each month. However, it’s important to note that alternative pricing methods exist. It is crucial to ensure that your final price adequately covers costs such as gas, state sales tax, insurance, and other expenses incurred by your business. The following formula outlines how I calculate my minimum prices:

Sales Price = (Cost per item * (110 percent + commission percentage)) + Cost per item (rounded to the nearest 0.25 cents)

Let’s illustrate this with a real-world example using a bag of 1.75oz Doritos Nacho Cheese Tortilla Chips. At Sam’s Club, the price for a pack of 64 bags is $27.88. Here are the breakdown and calculation steps:

  1. Cost per item: $27.88 / 64 = $0.44
  2. Commission rate: 15%
  3. Sales Price Calculation: (0.44 * (110% + 15%)) + 0.44 = $0.99

Based on the calculated price of $0.99, you can round it to $1.00. Consequently, you may choose to price it at either $1.00 or $1.25. For Type 1 locations, $1.00 would likely be the appropriate price, while Type 2-4 locations may warrant a price of $1.25. However, it is worth noting that certain bagged products can be sold for $1.50, depending on market dynamics and customer preferences.

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