Office Vending Machines and Procurement: An Employee Perk or Company Revenue Opportunity

Does your company have an office vending machine? From a financial arrangement standpoint, how does it work? This was a question posed to the Procurement Foundry community, and the responses provide the fodder for an interesting debate. In short, is it an employee perk or company revenue opportunity?

“For vending machines in offices, is it standard to get a kickback on sales or just let them bring it in for free?” – Sadat, Procurement Foundry Community

A discussion in the Foundry alluded that there might be more opportunities for vending machines and procurement when it comes to office vending machines. Before we share the feedback with you, we think it would be good to provide a little background information on the vending machine industry so that you have some context to form your opinion.

Vending By The Numbers

According to research, the typical vending machine “generates over $75 of revenue each week and over $300 per month.” That is an average annual stipend of $3,600.

Vending companies “generally pay between 5% to 20% of their vending machine sales” to place their machines in an office. Based on the above, a company can expect to receive between $180 and $720 annually by providing access to their employees. It doesn’t seem like a lot, given that in the U.S., vending machines rake in $7 billion in annual sales, delivering a yearly profit of $64 million for dispensing snacks alone. That number goes up when you consider all the items you can buy.

By the way, and according to a June 2019 Small Business Trends article, the following are the four most profitable vending machines in the industry:

• Branded Sodas. Soda dispensing machines remain most popular among vending machines.
• Snacks – Glass Front with Coil System.
• Cold Food – Refrigerated Turret-Style.
• Ice – Freestanding.

While a freestanding ice machine would not be an option in an office environment, branded sodas, snacks, and cold food are viable choices.

Now that you have some information to provide added context, why do you want to make a vending machine available to your employees?

The Community Speaks

In his response to the question perk versus revenue, Jim, a former Director of Vendor Alliance, wrote:

“I had two different models for vending contracts. One model collected commissions and used that money, paid quarterly with a detailed accounting form, for the annual Christmas luncheon. The second model reduced the cost of items from the typical cost that passed on the reductions directly to the people that used the vending machines. If you are talking about one or two machines, the profit will be small, so I would opt for lower costs on the items. If you have a larger footprint as I did at 9 distribution centers with 50+ machines, the commission collection works best.”

The above makes a good deal of sense given the two different environments Jim described. However, when it comes to selecting a commission model, Alaric, a Director of Strategic Sourcing, cautions that “once the employees get wind of this, they likely won’t be too happy knowing that the company is “making money off of them.”

While recommending a “revenue neutral” model, Alaric also suggests that the company may have to “step in and manage the pricing” to ensure their employees get a fair deal.