Vending Basics for New Operators
Vending location agreements and commissions.
The agreement decides what you owe a location and how long your machine stays. Here is what to put in it, how the commission models compare, and the math to run before you sign.
Put every location deal in writing.
A location agreement, also called a placement agreement, sets out who does what, who is paid what, and how either side ends it. Managers change jobs and buildings change hands, and the agreement keeps your machine and your terms in place when they do.
Placement and term
Who signs, the address, where the machine stands, how long the agreement runs and whether it renews by itself.
Exclusivity
You are the only vending provider on site, or for the categories you sell.
Commission
The model and rate, what it is calculated on, when it is paid and the statement that comes with it.
Service and refunds
How often you visit, how quickly you respond, and that refunds come from you.
Power, space and access
The location supplies the outlet and power, and you get access to service the machine.
Insurance and damage
Your general liability coverage, who is responsible for what, and who pays if the machine is damaged.
Ownership, prices and products
The machine and everything in it stay yours, and you set prices and the product mix.
Ending it
The notice each side gives, how long you have to remove the machine, and the final commission.
Have a local attorney turn this list into your standard agreement once. After that, only the location details and the commission change from site to site.
Choose a commission model the machine can afford.
A commission is the share you pay a location for hosting your machine. These are the six models operators use.
No commission
The location gets the amenity and your service. Common at smaller sites and offices that want a perk.
Flat monthly fee
Simple for both sides, though you pay it in a slow month too.
Per item sold
An easy number to explain that ignores price and margin.
Percent of gross sales
A share of sales after refunds and sales tax. Its cost rises with every sale, whatever your margin.
Percent of gross profit
A share of sales minus product cost, which shares the cost risk with the location.
Tiered
Nothing until sales pass a level, then a percent. It suits a new site whose volume nobody knows yet.
Run the numbers before you agree to a rate.
Take one location with $1,000 a month in gross sales and $450 of product cost, which leaves $550 of gross profit. A flat $50 fee leaves $500. Ten percent of gross sales costs $100 and leaves $450. Twenty percent of gross profit costs $110 and leaves $440. Fifteen percent of gross sales costs $150 and leaves $400.
What is left still pays for card fees, fuel, your time and the machine itself. Add those up first, and offer a rate that leaves the machine worth running.
Three rules that protect your margin.
Calculate on gross sales
All sales, minus refunds, minus sales tax. The tax belongs to the state, so never pay a commission on it.
Start low and share the upside
Offer no commission or a flat fee until a site proves itself, then a tier above a sales level.
Pay on a schedule with a statement
Monthly or quarterly, showing sales, refunds, tax and the commission, so the location never has to ask.
The Vending Operator Playbook has the full clause checklist and this example as a table. To find the locations first, see how to find vending machine locations.
How Dryline works out what each location is owed.
Location commissions in Dryline take one rule per location: a percent of sales, a percent of profit, a fixed monthly amount or an amount per item. Dryline works out what each location is owed for any period on cash and card sales after refunds and sales tax, with a statement for each location that you mark as paid.
Questions about location agreements and commissions
- What commission do vending locations get?
- It depends on the location. In one industry survey, apartment buildings were paid 10% to 15%, a big-city transit system 28%, and a private business nothing at all. Government and institutional accounts weighed commission more heavily than private businesses.
- How long should a vending location agreement run?
- Write the term in months from the day the machine goes in. One model contract published in Vending Market Watch runs three years, renews in two-year periods, and gives the operator 60 days to fix a problem before the location can end it.
- Who pays for the electricity a vending machine uses?
- The host location typically does. Vending Market Watch notes that part of a commission is meant to repay the location for the space and power.
More vending basics.
Why offer cashless
What card and phone payments add for customers and for you, and what a machine needs to take them.
Tap to Start, Select First, and Multivend
Pay first, choose first, or buy several items with one tap, and why your machine has a say.
How MDB works
How the controller runs the coin mechanism, bill validator, and card reader on one connection.
Planograms
The map of a machine: what goes in each slot, at what price, and how full to fill it.
Stocking strategies
A first product mix, par levels, rotation, and restocking the machines that need it.
Starting a vending business
Licenses, sales tax, insurance, machines, locations, commissions, pricing, and routes.
Finding locations
Where to look, how to score a site, and how to pitch the manager who decides.
Sourcing and pricing
Where to buy as you grow, cost per unit, and pricing for margin and the location.
The Vending Operator Playbook
Every business guide in one printable workbook, with a site scorecard and a pricing worksheet (PDF).
Pay every location from the same numbers.
Book a 20-minute demo and see location commissions and their statements on real screens.