Start Here: You Often Don't Need to Offer Anything
The single most common mistake new operators make is opening with a commission offer nobody asked for.
For a small business, a vending machine is a service, not a revenue stream. You supply the machine, the stock, the maintenance, the cash handling, and the insurance. They supply a few square feet and some electricity. For a laundromat, an auto shop, or a 15-person office, that trade is already worth saying yes to.
A large share of small placements run at 0% commission and both sides are happy. The location gets a perk for customers or staff at zero cost and zero effort; you get a placement without giving up margin.
So the first rule: don't lead with a number. Lead with the service. Let them raise money if money matters to them. Plenty never will.
What Commission Actually Means (and the Detail That Costs People Money)
Commission in vending is normally a percentage of gross sales from the machine, paid to the location on a monthly or quarterly basis.
That phrase — gross sales — is where new operators get hurt. Gross is everything the machine takes in, before you pay for a single bag of chips. Your product cost is roughly 40–50% of gross. Card processing takes a few percent more. Fuel, time, and maintenance come out after that.
So a commission that sounds small against gross is large against what you actually keep:
| Commission on gross | Roughly what it costs you as a share of your net profit |
|---|---|
| 5% | around 12–15% |
| 10% | around 25–30% |
| 15% | around 35–45% |
| 20% | around 50–60% |
Those are approximations, and they move with your product margin and price points — run your own numbers in the profit calculator rather than trusting a rule of thumb. But the shape is always the same: a percentage of gross is two to three times more expensive than it sounds.
Two protections worth building in from the start:
- Specify gross of sales tax, not inclusive. If your state's sales tax is included in the vend price, paying commission on the tax-inclusive figure means paying commission on money that was never yours.
- Set a payment threshold. Something like "commission is paid once the accrued balance exceeds $25" saves you mailing a cheque for $4.13.
Typical Commission Ranges by Location Type
These reflect what businesses commonly expect rather than any fixed standard. Expectations vary enormously by region and by how much competition the location has already had knocking on the door.
| Location type | Commonly expects | Why |
|---|---|---|
| Small independent shop, auto repair, laundromat | 0% | Machine is a customer perk; owner-operator decides on the spot |
| Small office (under ~30 staff) | 0% | Seen as a staff benefit, not income |
| Gym or fitness studio | 0–10% | Some expect a cut, many just want the amenity |
| Larger office or business park | 10–15% | Facilities managers are used to being offered a cut |
| Manufacturing, warehouse, distribution | 10–20% | High volume, and they know it |
| Hospital, university, large institution | 15–25%+ | Formal procurement, often competitive bids |
| Hotel | 10–20% | Depends heavily on guest volume and whether staff or guests are the market |
A pattern worth noticing: commission expectations rise with the size of the organisation and the formality of its purchasing process. The single-owner business you can pitch in five minutes is usually the one that wants no commission at all. That is exactly why small independents are the right target for your first few machines.
Alternatives to a Percentage
Commission is not the only way to make a location feel paid. Sometimes it isn't even the one they prefer.
- Flat monthly fee. A fixed $25–$75 per month. Locations often like the predictability, and you like knowing the number regardless of a good month. Risky if volume turns out low — a flat fee on a machine doing $200/month can wipe out your profit entirely.
- Free product allowance. "Your staff get $30 of product a month on the house." This costs you wholesale, not retail, so a $30 allowance costs you roughly $15. It often lands better than $30 cash because staff feel it directly.
- A tiered percentage. 0% on the first $400 of monthly sales, then 10% above it. This protects you at low volume and shares upside when the location performs. It also gives the owner a reason to promote the machine.
- Better product selection. Sometimes what they actually want isn't money, it's the specific drink the owner likes, or healthier options for staff. Ask.
The free product allowance and the tiered percentage are the two most underused tools in vending negotiation. Both let you say yes to "what do I get out of it?" without handing over a fixed slice of gross.
When Someone Asks for Too Much
You will be asked for 25%, 30%, occasionally 50% by someone who has no idea what your margins look like. That isn't bad faith, it's just unfamiliarity.
What works is showing the math rather than refusing the number:
> "Happy to talk about a cut. Just so the number makes sense — of every dollar that machine takes, about 45 cents goes straight back out on product, and a few more cents on card fees. At 30% there's nothing left to cover restocking trips or repairs, so I'd end up servicing it badly, and that's worse for you than no machine. What I can do is 10%, or I can do 0% plus $40 of free product for your staff each month — which is worth more to them than the cash would be."
That reframes it from haggling to problem-solving, and gives them two acceptable exits.
And be willing to walk. A location demanding 25% at low volume is a location that will cost you money for a year while you feel obliged to keep servicing it. There are more businesses without a vending machine than you have machines. Walking away from a bad deal is not a lost opportunity; it's a preserved one.
The exception: a genuinely high-traffic site with a captive audience can justify a high percentage, because 15% of a machine doing $1,500 a month beats 0% of one doing $250. Judge the number against expected volume, never in isolation.
Getting the Number Right Before You Walk In
Before you offer anything, you should be able to answer three questions:
1. What will this machine realistically take per month here? Estimate from headcount, foot traffic, and dwell time. Be pessimistic; new operators overestimate by a wide margin. 2. What does my net look like at 0%, 10%, and 15% at that volume? If 15% takes you below roughly $100/month net, the deal isn't worth servicing. 3. What's my walk-away number? Decide it before the conversation, not during it.
Run those three through the numbers first — the profit calculator handles commission directly, so you can see the break-even before you're standing in someone's office being asked for a percentage on the spot.
Once you know what a location is worth to you, the negotiation stops being intimidating. You're not guessing; you're checking their ask against a number you already decided.