Fifty-one percent of customers report purchasing a frozen beverage in the past month, with 30% indicating increased consumption compared to previous periods. Popular retail-only items can command higher prices and drive impulse purchases, resulting in substantial profit margins compared to typical fast-moving products. Retailers can expect gross profit margins of 70-120% from renting Frozen Beverage machines.
Types of Expenses
Like all items, frozen drink machines have costs that affect short- and long-term profit margins. These expenditures include one-time, recurring, and “hidden” fees. Depending on the quality, size, and kind of frozen beverage machine rental, these costs will vary.
To maximize ROI, company owners should consider these costs. In this part, we’ll cover the expenses of commercial frozen drink dispensers.
Buying a Frozen Drink Machine
A frozen drink dispenser is pricey. Stores may rent or buy frozen beverage dispensers. On the surface, renting seems cheaper since merchants won’t be liable for upkeep expenditures. For shops with long-term equipment needs, ownership gives higher profit margins.
Operational Costs
Operational fees are recurrent expenditures businesses must pay to employ a frozen drink machine. This includes water, power, garbage, and downtime. Utility expenses vary by machine size, quality, and kind. Dispensers that make frozen uncarbonated drinks (FUB) from open bowl systems, such as granita machines, consume more water, lowering profits.
Top-quality machines that make frozen carbonated drinks (FCB) have low annual utility expenses, $250-300. Your ROI will suffer from waste and downtime. A high-quality machine has a 10% margin.
Maintenance Costs
The cost to maintain a frozen drink dispenser depends on its type, frequency of usage, and other considerations. There are normal and unforeseen maintenance charges. Routine maintenance expenditures occur monthly, annually, or in between.
Because high-quality units employ a closed, sealed system with a stainless steel cylinder and a high-acid anti-bacterial solution, your machine may run a year before periodic maintenance.
Flavor Mixes
Outside of the drink maker, the biggest cost of frozen beverage machines is flavor mixes. The industry rule of thumb is 2 cents per ounce of flavor syrup. Because water is almost free, the cost of a frozen drink depends on how much mix is used. At 2 cents per ounce, a 20-ounce drink costs $.40.
Packaging
A frozen drink machine is a sticky mess without a cup to fill. Thankfully, cups, lids, and straws are cheap in quantity. As with other costs on this page, the exact cost depends on several variables.
Having your brand’s branding on mugs will cost extra. Also, eco-friendly packaging will be more expensive than plastic and styrofoam.
Cost of alcohol license
Unlike the other costs in this post, this one is fully optional. Alcohol licenses are only necessary for merchants whose machines make frozen margaritas, sangria slushies, etc. A liquor license costs between $300 and $14,000, depending on the state and municipality. In Delaware, shops must pay an extra $400 to sell alcohol on Sundays.
Predicting Your Return on Investment
To calculate the ROI for a frozen drink machine, you must first estimate your expenses and profits.
As this article explains, the expected cost of owning frozen beverage machines in rental Bronx should include purchase, maintenance, operation, packaging, and flavor mixes. Consider customer happiness and associated sales areas, too.