What would happen if all distributor operators chose to pay commissions? Most automaton operators acquire sites by offering holders the best offer in terms of service and commissions. Commissions are a portion of the profits from vending machines granted to the holder in exchange for exclusive rights in a specific place of sale. However, given that 75% of distributors derive a return of 3.8% on assets (ROA), the standard commission of 7% is a financial burden. Contrary to what is thought, commissions are not the Achilles` heel of vending machines. Instead, it is a tool used by experienced ATM operators to increase their market share. ATM operators who are having difficulty paying commission rates due to a low ROA rate should look at their overall management. Product selection based on market research, higher selling prices, modern equipment, adequate inventory control and excellent technical service are important elements for high investment returns and profitability for a vending machine business. But let`s imagine that there are no commissions. What would happen to distributor operators? With an ROA of 22%, a million dollars invested in 10 years would exceed $6 million! The yields of this high would not be held in a free market economy.
Instead of offering commissions, ATMs would necessarily have to find other ways to invest their money to keep their customers. For example, a vending machine operator would offer at-home home owners other incentives such as newer or more modern equipment, additional services or lower selling prices for soft drinks in soft drink vending machines or sweets and snacks in candy dispensers. The net effect of these incentives could result in a reduction in the amount of personal income tax. ATM operators can often increase their share of the VENDing market by increasing commissions. An increase in commission rates may be covered by an increase in the unit price of machine products.