Factors that Influence a Location’s Profits

Once you have placed your Antares vending machines in the locations and start earning immediately from the locations, there might be a few problems that may arise. These are problems that can impact profitability. They can be divided into five major categories: sales, gross profits, operating costs (including commissions), net profits and return on investment (ROI).

Gross sales

Sales will vary directly with the population at the location. As the population increases or decreases, so will the sales in your Antares business. Since gross sales are the primary determinant of the bottom line, they must be monitored closely.

Gross profits

Gross profits equal sales less cost of goods sold. If the product costs increase and you cannot raise selling prices, then the gross profits from your location will fall. The same would apply if a dishonest route person doesn’t return all the cash that has been collected. The reported sales will appear to fall while the product costs will remain the same, and the gross profits will fall. Antares operators should understand that the gross profits that are reported as a percent of gross sales, does not tell the whole story.

Operating costs

The discussion of operating costs of your Antares business should be limited to only those costs that relate to the client. Typically, these are the direct, variable costs associated with servicing that client. The big ones include direct labor and vehicle, commissions, equipment depreciation, sales taxes, etc. One shouldn’t expect the location to vary the terms of the contract because the operator decided to overspend. As with gross profits, both the dollars and the percentages of your Antares business should be monitored.

Net profits

Net profits are what are left after deducting all the operating expenses. It should also be calculated in both dollars and percentages.

Return on investment

This is the net profit from the Antares vending location, annualized, expressed as a percentage of the capital investment in that location. If this location produces annual profits of $5,000 and requires a capital investment of $25,000, then that means that the ROI will be calculated as 20 percent.