A location commission is a percentage of a machine's gross sales paid back to the business hosting it, not a fee you pay to place the machine, and not a share of your profit. That distinction matters, because a commission comes off the top before product cost, processing fees, or anything else, which means it hits your margin harder than the headline percentage suggests.
#What's actually normal
- Many small businesses ask for nothing. A single office, small shop, or independent business often treats the machine as a convenience for staff or customers, not a revenue line. Commission-free placements are more common than new operators expect, especially for a location's first machine.
- Larger accounts and managed properties commonly expect 10–20% of gross sales. Property management companies, larger employers, and multi-tenant buildings are the most likely to ask for a cut, sometimes with a guaranteed minimum monthly payment regardless of sales.
- High-traffic or exclusive locations can push higher, particularly if multiple vendors are competing for the same spot. But a commission above 20% is worth scrutinizing closely against what the location can actually deliver in sales.
#Commissions are usually negotiable
Don't treat a location's first number as final, especially for a first placement:
- Offer a lower rate in exchange for exclusivity: a commitment that you're the only vending presence at that location for the length of the agreement.
- Offer a longer initial term in exchange for a lower or waived commission, giving the location certainty in exchange for a break on your side.
- Propose a trial period at 0% to prove the machine performs, with a commission structure revisited after 60–90 days once there's real sales data to reference.
#Run the math before you agree to a number
A commission only makes sense in the context of your product pricing and margin. A 20% commission at a strong location can still out-earn 0% at a mediocre one, but only if you've actually checked. Before agreeing to any commission rate, run it through the Product Margin Calculator against your real price points: enter the commission percentage alongside your product cost and card processing rate, and see what's actually left per sale. A commission that looked reasonable in conversation can turn out to erase most of your margin on a low-ticket item once card fees are stacked on top of it.
#Structures beyond a flat percentage
Most agreements use a straight percentage of gross sales, but a few variations come up:
| Structure | How it works | When it's used |
|---|---|---|
| Flat percentage | X% of gross sales, paid monthly or quarterly | The most common structure by far |
| Guaranteed minimum | A flat monthly amount regardless of sales, sometimes combined with a percentage above a threshold | Higher-traffic or managed properties wanting certainty |
| Tiered percentage | Commission rate increases at higher sales volumes | Less common; used by some larger accounts |
| Flat placement fee | A fixed monthly fee instead of a percentage | Rare; can work in your favor at a high-volume location |
#Get it in writing either way
Whatever rate you agree to, put it in the placement agreement along with the payment schedule and how sales will be reported or verified. See what to put in a placement agreement for the rest of what belongs in that document. A verbal handshake on commission is one of the most common sources of disputes between operators and locations later on.