Before you sign a contract or buy a machine, you need to know exactly how the money works. Here's the real cost structure and profit formula — no hand-waving, just the actual math.
Startup costs
- Solo side hustle (1–2 used machines): $3,000–$6,000 total.
- Serious start (1–2 smart machines): $8,000–$15,000.
- Fast start (3–5 machines): $20,000–$50,000.
- Micro market: $15,000–$50,000 per installation.
Ongoing expenses
- COGS: 40–50% of revenue. A $2.00 snack costs ~$1.00 wholesale.
- Location commission: 10–15% or $50–$200/month flat.
- Card processing: 5–6% of cashless transactions.
- Insurance: $500–$1,200/year.
- Software/telemetry: $40–$100/month per machine.
- Fuel/vehicle: $200–$500/month for 10–20 machines.
- Repairs: $50–$150/month averaged across a route.
The real profit formula
Net profit: 25–30% of gross revenue. Example on a $1,200/month machine:
- Gross: $1,200
- COGS (45%): -$540
- Commission (12%): -$144
- Card processing (5.5%): -$66
- Insurance, software, fuel, repairs: -$120
- Net: ~$330/month (27.5%)
At $600/month gross = ~$160 net. At $3,000/month gross = ~$825 net.
Per-machine revenue tiers
- Poor: Under $1,000/month — evaluate or relocate.
- Underperforming: $1,000–$1,500 — needs intervention.
- Good: $1,500–$3,000 — solid workhorse.
- Excellent: $3,000+ — premium, protect this location.
- Elite: $4,000–$6,500 — luxury residential, manufacturing, hospitals.
Income targets
- $1,000/month: 3–5 well-placed machines.
- $4,000/month: ~25 average or 8–15 premium.
- $10,000/month: 15–30 mixed locations + PT stocker.
- $600K+/year gross: Documented with just 18 premium machines.
ROI timeline
Most machines pay back in 12–14 months. High-traffic: 6–9 months. Plan conservatively. Model your scenario with the VendBuddy ROI Calculator.
Related: our financing guide covers funding without draining operating cash, and our $0-down startup guide covers six creative approaches. See also: real income numbers from real operators, how to find and land locations, LLC setup and tax deductions (Section 179 can offset significant income), and our scaling playbook. Use the Route Valuation tool if you're considering buying an existing route.