Vending machine value determined by plenty more than cost

Vending machine value determined by much more than cost

The valuation of vending machine equipment is in accordance with quite a lot of factors:

1. Storage value
2. Collector's value
3. Scrap value
four. Parts value
5. Operational value
6. Market value

In trying to value machines, each of these valuations is significant.

1. Storage value: Machines in storage are generally considered liabilities, they usually cost you money each month. Even if you store the machines in your garage, they're taking space that could be used for something else (like your car), which leaves them a liability.

2. Collector's value: If you have a particularly historic vending machine, you might have a work of equipment that is collectable. The most notable examples are rounded top soda machines. These machines were made in the 1950s, and are examples of the initial entry into the cold drink vending era. They were constantly purchased by bottling companies and painted with a brand of soda (Coke, Pepsi, Crush, etc.). They were constantly single-selection (one flavor) and operated with primitive coin acceptance. Snack machines are much a similar; they were constantly a mechanical vend process with primitive coin acceptance. To be valuable, they need to be working and in pristine condition. Few of these machines still exist; just because a machine is historic does not mean it is valuable.

3. Scrap value: All historic vending equipment has a scrap value, if nothing else. Scrap is the lowest value available and is calculated by weight. Because vending machines are generally made of steel, they're heavy. The scrap value of steel fluctuates frequently, in accordance with world demand. Scrap value is best figured by calling a native shredding facility that deals in scrap metal. Make sure to figure in the cost of transportation, as this figure can make it unprofitable to scrap machines. I personally use a native man who takes a truck and trailer load (pickup with a flatbed trailer) to the scrap yard; for his efforts, he keeps the revenue. Unless the value of steel is extremely high, we do not generate revenue from this process, but at no cost, we remove junk from our facility. We do not "junk" a machine until we have used each of the available parts.

four. Parts value: Old vending equipment additionally has salvage value in the form of parts. The cost of replacing individual parts from vending machines can often be recouped by scrapping parts from other machines. Replacement parts can be costly and requires time to achieve. If you have a compromised machine, the parts value can far exceed the machine value. Vend motors, compressors, switches, computer boards, changers, validators, spirals, coin chutes, glass, etc., are all available if you salvage the machine. Our company has purchased machines (constantly one that's been vandalized) intending to use it strictly for parts. Repair parts are immediately available at a discounted cost. For example, snack machines have 30 to forty selections, which means 30 to forty vend motors and spirals. New vend motors start at $10, spirals at $5 - so one machine yields $600 worth of motors and spirals. The glass is worth $50; trays are worth $15. Nuts, bolts, specialty parts have some value. Changers and validators are worth $50 each. If you have the need, the parts value can add up quickly.

5. Operational value: Vending machines on location develop cash flow; they produce cash for your operation. The quantity of cash generated depends upon the location, but if placed properly, one can expect positive cash flow from vending machines. The operational value is the quantity of single net cash flow that can be generated by the vending machine in 9 months. Single net cash flow is the total revenue minus the cost of goods sold. Let's do the math: Account A: $four hundred per month gross sales
$50 Cost of goods sold (a hundred% margin)
Single net cash flow
9 Months
Equipment Value

$four hundred - $200 = $200 x 9 months = $1800 equipment value

This formula is a short lived guide to equipment placement. If you can accurately forecast your sales, you can determine how much to spend on equipment. Your intention should be to violate this formula by spending less on your equipment. This will make your accounts more profitable.

6. Market value: Market value is the quantity of cash you will pay for a machine in the open market. Market value falls into two categories: new and used. New values for vending machines are determined by the manufacturer and sales organization. Like all value, the value of new vending machines depends on alternatives, name brand, warranty, reliability, standardization, versatility, and the like. Not all vending machines are created equal; some brands have features that are superior to others, and it is critical that the dealer stands behind that equipment and honors his warranties. Used equipment can be purchased quite a lot of ways - through want adverts, vending companies going out of business or updating equipment, and from dealers. Used values are determined by many of a similar factors, but additionally include the seller's motivation to move the equipment.

When choosing a vending machine dealer, remember that your dealer will become your unofficial partner in the vending machine business. A good dealer will have a solid business record (dealers that have run vending machine companies are preferred), should be honest, and have a list of satisfied (and dissatisfied) customers you can call. A quality dealer will carry quite a lot of lines of new equipment and have a service and refurbishment department for used equipment. Most quality dealers offer quite a lot of levels of refurbished used equipment to aid you best meet your needs. They constantly have some type of financing available, as well. Shop your rates and terms, because vending equipment is very difficult to finance; ask your accountant for your best finance solution. The dealer's service staff should be available by telephone for quick suggestions on repair. They should have delivery services. Generally, a high quality dealer has the means to aid you with all facets of your business and will be in a position to guide your decisions in an unbiased way. Of course this all comes with a price: most quality dealers will be just a little more expensive than their competitors.

Keep in mind, though, that you don't want to be "penny wise and pound foolish," as the historic announcing goes. The added initial cost of your equipment will be overcome by the added service you will receive, and avoiding one simple mistake can generate thousands of dollars in added income. Use your dealer as a source of assistance and capitalize on that assistance.