How Much Money Do Schools Make From Vending Machines

Vending machines are commonplace at many locations and one specific type of location that stands out among other is schools. Hundreds and even thousands of students pass by vending machines at a nearby educational institute everyday and a certain percentage of them buy a food or snack item to nourish themselves. This article explores how much money do vending machines make in schools from a perspective of schools that earn commissions and vending machine operators/companies that own and are responsible for placements.

In 2006, the Office of the Utah Legislative Auditor General released a report on the use of vending machines in public schools and how it contributes to the overall funding base for education in the state. We will delve into the details of this report, summarize it, and provide our own analysis of how much money vending machines make in schools.

Firstly, vending machines placements are decided usually by the school district's procurement official. Which sports equipment, TV projectors, chairs, tables, and vending machines to buy or rent are usually decided by a single or group of individuals that are responsible for procurement. Procurement simply means to obtain something at a cost or in simple terms, to buy. Procurement is the term they use because of professionalism and accuracy.

If I told the truth, most vending operators do not keep good track of their accounts in terms of how much money they make or lose via their machines. Therefore, most operators don't price the food items inside the machines competitively enough to achieve maximum sales and ultimately, they miss out on profits. Getting back to the report, the state of Utah has vending machine placements at 223 schools. The average projected revenue is about 3.5 million during the fiscal year. If according to the report the total number of students across the 223 schools is 215, 570 this brings a per student revenue average of $16.23. Most items are priced at between $1.50 – $2.50 in a machine. The Utah State Office of Education mainly expresses concerns over how the money generated from vending sales is being used.

If we estimate a standard of two machine placements per school (one snack and one drink) we can understand that there is a total of 446 machines. 3.5 million spread out across 446 machines equals 7,847 per machine which sounds typical of what you can expect to earn from a machine. I did factor in whether the numbers accounted for by the Utah State Office was indicative of commission or gross sales and it is likely they are a combination.

As a result, to answer the question of how much money vending machines make in schools we must conclude that it is going to be around 7-15 thousand dollars per year per machine. Remember, most items in the vending machines are marked up by 100% so the gross profits from each machine equate to about 3.5-7.5 thousand dollars per year. This does not account for the cost of acquiring the equipment which must also be factored in to get a good analysis. To do this, we can take an average price of $5000 per machine and at this cost point it would take 1.5 years to make back your investment before you started to turn a profit on any given machine.

The real underlying issue is obtaining the contracts with schools in the first place for which we have written a separate article as well as given insights in the one you are reading now. Furthermore, you must factor in the cost of stocking the machine or the labor hired to perform the re-stocking tasks. Gasoline and refrigerated transport costs can further diminish the bottom line.