Economics

Nightlife vending unit economics: what is left after every cost

Gross sales is not income. This is the full stack — product, processing, venue share, refunds, route labour and fixed costs — with a downside case attached, because a single flattering number is not a model.

Written by Jordan, Founder and CEO, VTM Vending
Reviewed by Micah Stanley

11 August 2026 · 11 min read

Machine screen showing product pricing in a bar

The short answer

The number that matters is operating contribution: gross sales minus product cost, payment processing, venue share, refund allowance, route labour and fixed monthly costs.

Every published figure in this industry should be read with one question: is that gross or net, and over what period? Most are gross.

Include your own labour and mileage even when you do the work yourself. A route that only clears because the owner works for free is not profitable; it is employing you below market rate.

The formula

There is no clever version of this. It is arithmetic, and the discipline is in refusing to leave lines out.

Line	How it is calculated
Gross sales	Completed transactions × average selling price
Product COGS	Completed transactions × landed cost per vend
Processing	Transactions × (price × percentage fee + fixed fee per transaction)
Venue share	The agreed percentage applied to the agreed base — see the warning below
Refund allowance	Gross sales × your actual or planned refund and chargeback rate
Route labour	Hours × your hourly value, plus mileage — included even when you do it yourself
Fixed costs	Software, connectivity, insurance and licences, allocated monthly
Operating contribution	Gross sales minus every line above
Simple payback	Initial investment ÷ positive monthly operating contribution

A percentage is meaningless without its base

"Fifteen percent" can mean fifteen percent of gross sales, of sales net of tax, of gross profit, or of contribution. These produce very different numbers. The agreement must state the base, the reporting period, how refunds and processor adjustments are handled, and the payment date. Ambiguity here is the most common source of disputes with a venue.

A worked scenario

Illustrative only, and every input should be replaced with your own. The point is the shape of the calculation, not the answer.

Input	Value
Transactions per month	75
Average selling price	$24.00
Landed cost per vend	$8.50
Processing	3.5% + $0.20 per transaction
Venue share	15% of gross sales
Refund allowance	1% of gross sales
Route labour and mileage	$175
Software, connectivity, insurance	$90

Line	Amount
Gross sales	$1,800.00
Product COGS	−$637.50
Processing	−$78.00
Venue share	−$270.00
Refund allowance	−$18.00
Route labour	−$175.00
Fixed costs	−$90.00
Operating contribution	$531.50

Gross sales of $1,800 became $531.50. Anyone quoting the first number as income is either careless or selling something. The calculator on the homepage runs this exact model — change the inputs and watch which line does the damage.

Why the downside case matters

A single scenario is a guess wearing a suit. Run three.

Scenario	Transactions	Avg price	Labour	Operating contribution
Downside	40	$20.00	$125	$101.00
Base	75	$24.00	$175	$531.50
Upside	120	$27.00	$240	$1,174.20

The spread is the useful information. A location that clears roughly $100 a month in its downside case is not a disaster — it is a location whose payback is measured in years rather than months, which is a different business decision from the one the upside case implies.

Plan against the downside. If it still works, the base and upside are upside.

Payback and what it excludes

Simple payback is initial investment divided by positive monthly operating contribution. At the base case above, a $3,550 machine returns its cost in roughly 6.7 months.

What that figure does not include: opening inventory, permits and licensing, insurance set-up, the cost of a placement that fails and has to be relocated, and the time spent finding the venue in the first place. Payback on the machine is not payback on the business.

Tax is not in this model

Tax base and rate vary by jurisdiction and product category and can materially change the outcome. Confirm your obligations with a qualified professional before relying on any figure here.

Sanity checks

Before you accept any number — yours or someone else’s:

Ask gross or netIf the answer is not immediate and specific, treat the figure as gross.
Ask over what period and how many machinesA best month on one machine is not a run rate.
Check labour is includedIf the operator does the restocking themselves and it is not costed, the margin is borrowed from their time.
Check the venue share baseFifteen percent of gross and fifteen percent of contribution are different businesses.
Look for the downside caseIts absence tells you the number was chosen rather than modelled.

Common questions

Is gross sales ever a useful number?

For sizing a location, yes. For deciding whether to buy, no. Only operating contribution answers that.

Should I include my own labour if I have a full-time job and do this at weekends?

Yes. If the route only works because your weekends are free, that is a real cost and it caps how far you can scale.

What refund rate should I assume?

Use your own once you have data. Before then, model a range and see how sensitive your result is to it rather than picking one figure.

Why does this exclude tax?

Because the base and rate vary by jurisdiction and product category. Any single number would be wrong for most readers.

Nightlife Vending program

Micah and Ben’s system for bars, clubs and late-night venues: qualifying a venue, getting the owner to yes, setting up compliance, and scaling past the first machine.

See the program Watch on YouTube

Informational only. Nothing here is legal, tax or financial advice. Vending regulation varies by state and locality and changes frequently. Verify current requirements with qualified counsel before operating. Figures are illustrative scenarios, not forecasts and not typical results. How we make money

What a machine actually keeps after every cost