ROI is very much dependent on the factors below hence there can be no generalised ROI.
Deciding Factors:
- Location: where the machine is installed. It can be a corporate office, college hostel( government or private ), public location, residential apartments and many more…..
- Number of people: how many people is the vending machine targeting; For example, a vending machine placed in an office for a target audience of 600 people.
- Products: what products are kept for selling and what margins do they have. Based on products these can be segregated further into industry segments like healthy snacks, fast food snacks, fresh food( rajma chawal, thali, etc ), cigarettes, books, electronics, medicines etc.
So different products have different margins, difference in demand( how many can sell in a day/month ) and different transaction size. - Transaction size of product: This refers to the total transaction size while buying products. For example, the transaction size in case of buying snacks may be Rs 30 but the transaction size in case of buying fresh food may be Rs 70.
In this example, the number of transactions in the case of snacks will be more than fresh food as more people will be inclined to buy snacks. - Number of machines: With more number of machines the operation costs reduce hence more savings.
So overall these are the factors that affect ROI calculation.
Current Data
From our current customers who sell snacks and fresh food, this is the ROI.
Combo Vending machine cost with cashless and inventory management system: 1,80,000
Vending machine life: 10 years easily( if maintained well can even go till 14 years )
Choose a location having traffic above 500 people daily.
Have products with atleast 20-30% margins. More the margins, better.
Have a target of sales up to 35k-45K per month.
After cutting operations cost, Expected ROI: 1.5 years to 2 years ( i.e. the machine will recover the initial cost paid in 1.5 to 2 years )
After covering the cost in let’s say 2 years, Expected earnings for the next 8 years of machine life: 7,20,000
Vending Machine Investment
Amount invested in buying a machine: 1,80,000
Time period: 10 years ( average machine life )
Amount earned in 10 years: 9,00,000
Annualized ROI: 17.46%
Bank Investment
FD amount: 1,80,000
Time period: 10 years
FD interest rate: 7.5%
Total amount after 10 years: 3,80,171
