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Have you ever witnessed the making of cotton candy with a machine? If not, have you thought of this: Does this make money? Yes, with the right location and machine, cotton candy vending can be quite profitable and often times have profit margins over 90%. As in any business, however, profitability relies on the cost, the types of equipment involved and the location of equipment to enable customers to buy the stock. Let's have a look at some numbers and how to do it to make money.
The Numbers: What You Earn vs. What It Costs
The cotton candy vending machine looks like a good number of people are interested in it - it's a profitable machine! Low unit cost of the raw material; the cost of sugar, stick and packing is approximately $0.30 per serving to $0.50 per serving. In the meantime, the retail price of each serving is $4 to $8 and with some stores you can get more than $10 per serving.
This provides for a gross profit of 85% - 95% per sale. It can supply as many as 30-50 units daily and in these areas, one can be sure of $150-400 per day. At $8,000/month or more it is likely that you can find decent good jobs that pay $4,000 to $7,000 a month, and better ones that pay more. An example of a machine in California, that sold 50 units per day, had a monthly profit of $7,035 and a 1-month ROI..
The Startup Costs: What You Need to Invest
There's only one way of making money and that is to invest it first, then make money. A good automatic cotton candy machine is $6,000 to $10,000, and the top-of-the-range models can cost up to $15,000 to $25,000 with various additional features such as payment options, electronic screens and telemetry. Some options are available that are much less expensive which will get budget operators started for roughly $4,500.
In addition to the cost of the machine, opening stock of sugar and sticks, permits (if applicable) and venue commission (if applicable) will be there. The cost of the start up is $5,500 to $16,000, depending on the type of machine used and location.
Some operators may lease their machines instead of buying them. Typical leases are $350-$700 per month which is one-third to one-half of the weekend rentals. The rent is usually in the range of $350 to $700 per month, with one-third or one-half of the weekend sales, covering the rent. But in a general way, it's faster to make ROI when purchasing a franchise and there is total control of the business.
The ROI Timeline: When Do You Break Even?
When it comes to any investment, the key is the question “how long will it take me to get my money back?” Cotton candy sold will vary according to where is sold, and how many cotton candy can be made in a day. If you had a good average location (such as a family entertainment center), sold 15 units a day for $7 and your net profit after costs was over $35,000 a year, you would be doing pretty well.
ROI is between 3 – 6 months and a limited sales of 15 – 20 pieces per day. ROI period is 1-3 months, in a high traffic area (shopping mall, amusement park or cinema) 40-50 sales per day. One of the operators commented the following, "This is one of the most successful machines that I've ever been around with, ROI (return on investment) is much higher than what I expected.
Location and Machine Quality: The Deciding Factors
There's more to the numbers. The two factors that play an important role in profitable are where you place the machine and whether or not the machine itself is reliable.
It's probably most important to consider location. The most successful sites are where there are lots of pedestrian or impulse shoppers: shopping malls (near children's play area, food court/cinema lobby), amusement parks, cinema, tourist sites, and family entertainment centres. Office buildings, residential areas and any corner that is not visible don't perform as well, however.
It's also important to consider the machine's reliability. A machine which fails to generate profit will fail if it breaks down or parts are removed. Some of the trusted brands have equipment with remote monitoring to let you know of the issues that may turn into serious problems and technical support available 24x7. The SUNZEE cotton candy machine, for instance, is constructed from top-of-the-line components and utilizes a time-tried technology, and can hold multiple users and reply promptly. Up time is directly proportional to reliability of the machine and up time is directly proportional to profits.
SUNZEE is a National High-Tech Enterprise, creating the smart food and beverage service counter machines (including the fully-automated cotton candy machine). The SUNZEE technology is stable, monitoring is available via the cloud and operators are assisted around the clock, so they get the best out of their operation systems. Call us to find out more about our cotton candy vending machine services.
