Soap Vending

[MrsNewMat]

Is our profit margin on soap vending set by distributor or what? Or there are other ways to make more profit on this?

There are only couple of distributors to serve Northeast region and only one to sell "lever" products (Snuggle). The price I get from them, I can only make 10c per unit regardless of Tide, Colorx2 or Bounce. At this rate, it would take me years to pay for the VendRite machine.

Am I wrong here? Is there another way? Is anyone vending this units at 75 cents each? Do customers pay 75 cents for two sheets of Snuggle or a 1.8 oz box of Tide?

[RBHII]

has anyone with an attended mat considered selling the soap 'from behind the counter', versus vended? I realize most want as much coin/self service as possible....but for those with a non card store, would seem like a way to increase to say, 65 cents, without needing a new, expensive machine. just a thought

[millenniumplus]

We sell mini boxes of tide, gain, cheer, bounce (2 sheets), oxyclean, clorox2 at .75cents per box.
Yes, we get some grief but the alternative is the customer go to the store (or run back home) or
not forget to bring their own products. I'm told it's called convenience products. We also have an
arrangement with a local dollar store. Bi-weekly they buy extra cases of mini plastic clorox bleach
& liquid downy and hold them on the side for us (one dollar per bottle). We then charge customers
$2 per bottle - it's a huge seller. We also sell the little one machine use plastic clorox bleach units
at .75cents (cost us about .30cents per unit). The vend product price per box for us is about
.34cents per box (not including shipping). There are cheaper prices out there for sure. Perhaps
someone else can make a recommendation. We buy from our distributor. So yes, customers
do pay the .75cents for 2 bounce sheets. Customers complain but most understand the
convenience factor and so they buy and try to remember their laundry products next time.
The bottom line is we sell a lot of these products (tide, bounce, gain, liquid clorox bleach &
liquid downy = our biggest sellers in that order). Some of our competitors sell similar
products at .85cents per box. We've seen posts on this site where owners sell these
products for $1.00 per box.

[azkid]

You can, of course, sell the soap for whatever price you want. I've been selling mine for 75 cents for three years now. The reason I sell it for 75 cents is because it costs me about 33 cents from the distributor and I double everything. I also sell over the counter larger soap boxes that I buy from the dollar store across the street (these I sell for $2). Just do it. People pay for convenience.

[Danlaundry]

On the larger soaps you sell over the couter, do you charge sales tax on them?

[LuckyStella]

We sell at .75 a box and do all right. Most customers bring their own detergent, but when they're in a pinch, they'll pay the vend price. Our mat is in a very rural area, so there ain't a whole lot of choices.

While we may not sell a huge amound of product, the machine itself is long since paid for, so there is some profit there. We also own and service our soda machine, and make a nice profit on soft drinks.

[MrsNewMat]

Thank you all for great insight.

Those of you who have gone from .50 to .75 at one time or another -- what message, if any, you have posted to explain the price increase to your customers? Any slogans or phrases?

Or I am just too nice to think customers deserve an explanation??????

[Burley]

While I am sure some out there feel a sign is nice, I don't think it is necessary. Prices change all of the time in other businesses without an explanation. Why do we need to explain at a mat? You run a business and have a right to make a profit. Your competition also has the right to price their product lower than you. Do what you need to do......and good luck!!

[azkid]

On Dan's question - I don't charge sales tax on something I've already paid tax on when I purchased it (like the soaps from the store).

[thelaundrydoctor]

When I have raised prices on anything like soap, washes. dry's, or WDF and profeshional finished garments, Ive never poasted a sign. If some asks ill explain. However, the only customers that seem to notice are the dry cleaning ones.

[Duane]

azkid,


I don't know about your state, but in Ohio if you are reselling a product you MUST charge sales tax. I fill out exempt forms for snacks, pop and soap so I don't have to pay sales tax, but then when I sell it from the machine I need to calculate the sales tax and then pay it to the state.

Sales tax is paid by the consumer that is using and not reselling the product.

Duane.

[millenniumplus]

Duane - we do the same as you described here in LA.

[azkid]

We're supposed to do the same thing. But life's too short to worry about the nickels in my opinion. If I was selling thousands of dollars of the stuff - sure.

[Duane]

A local beauty salon thought the same thing. The owner thought that if she was audited she would just pay the sales tax she owed.

She was audited.
She owed $2500 in sales tax.
With lawyer fees and penalties the total bill was well over $20,000.
She now has a criminal record. If you don't pay sales tax it is considered stealing from the state.
Her vendors license was revoked and she lost the business.

Even though you paid sales tax, it does not count toward what you collect when you resell. So in fact it just lowers your profit margin.


Nickles and dimes ad up quickly. I collect and pay over $1000 each year.

[azkid]

I knew I would get this response. Tell you what - you can worry about it for me and we'll both be happy that way.

[Duane]

No worrying on this end....

[ZX7TREV]

Azkid seems like and appropriate name...just mispelled.

T~

[petefritz]

I agree, life is to short. And I am not committed to a life of paper work. I bought 4 12 packs of soda today at a gas station when I filled up. Good deal, $5 for 2 12 pack. I will take the cash receipt, which I did not get, and make my own. Then I debit soda purchase and credit cash I think. At that point I am done. All my soda comes tax paid, so I enter the sales as soda sales to the FEDS, and skip over the state. I have not bought on a resell certificate, which i do have, so I a not going to pay sales tax on something I did not buy for resale under my certificate. Is this wrong? I don't think so.
If the sales tax dept audit me and say I owe, then I will pay, but their will be no penalty involved. I have been thru something like this before, a sales tax I did not pay tax because I did not collect or thought was do. If you are purposely stealing sales tax money then they can nail you hard. I am not stealing anything.
I am NOT giving advice here, just talking about how I handle this situatuion. I buy soap under my certificate, and pay tax on the sales from that. I am one of very few on my soap dealers' route that buys soap tax free, everyone else pays the tax and sells it, like I do soda. So there could be a giant class action iceburg thing here. As they said at the helm of the Titanic, full steam ahead! the waters are calm...

[MrsNewMat]

Please, help me understand this.....

Are people saying or the rule is that if I buy soda from Sam's Club or whatever and pay sales tax at purchase, and then sell it in my vending machine, I should pay state sales tax again? Double taxing?

I don't get it. Then, why not pay sales tax on soap to Norton Supply? And to petefritz's point, why not sell soap as soda, or vice versa? I see most convenience store owners doing this. Would Stop&Shop or A&P sell me the soda at the sale price without tax?

I am confused.....

[Duane]

If you do not claim exempt and pay taxes on items that you will be reselling then it is double taxing and it comes out of your pocket. Only you are to blame and it is your loss.

Sales tax should only be paid by the consumer. You are not the consumer, you are the retailer. If you bought a case of soap for $30 and your sales tax is 5% then you paid $1.50 in sales tax. If you are selling the soap for about $60 per case, the sales tax should be $3. The state doesn't care that you already paid the $1.50, they want the $3 from the final sales. I believe that there is a form you can fill out to get reimbursed for any resell items that you paid taxes on.

You should file a tax exempt form at each place you purchase your vending items and then you are not required to pay the sales tax on items you are reselling.

At Sam's all you need to do is go to their customer service desk and ask for the proper form. When it is set up then you just tell the check out clerk what is tax exempt and they will not charge sales tax.

If a company will not exempt you from taxes for your resell items you should shop somewhere else.

[petefritz]

In the real world, Duane is correct. In the real, real world, things don;t work that easy,. I am going to the local supermarket to buy 3 12 packs of soda for $8. They are not going to mess with a resale certificate, and Sams is charging over $6 a case now! What is a person to do? Pay more and buy tax free, and pay sales tax, or buy cheap, pay the tax, and resell and keep the profit? If you just can not sleep at nite than take an average cost, deduct the sales tax off what you collected and send it to your state coffers..I did that for many years, but even THAT was to much bookwork..I paid a tax, it is mine to do as I please now.

[MrsNewMat]

Those who sell soap by cup, how do you do it? At what price?

Has anyone bought soap in bulk and repackaged it to sell? How did that go?

How do you handle dry sheets (bounce)?

If you repackage, let's say Tide Powder in a generic box or bag, can you lable it with Tide? Would it be legal?

[ZX7TREV]

Pete

"I paid a tax, it is mine to do as I please now. "

NOT TRUE. You are reselling it to the final consumer...therefore you owe sales tax. If you paid taxes before hand, thats your decision to make. Once you make the decision to use that item in your machines...its taxable...period. Its not the taxes anyway...they are paltry...its the penalties you will get slapped with if you get caught.

Now...all of this said...if you sell enough in vending that the taxes are that big of a deal, you need to share your secrets with me.

T~

[petefritz]

Thanks, I never read your response., I stand by my statement... I will point the state tax dudes at the local Flea market a few miles away to get them off my trail!! I am probably looking at jail time anyway, I report the sales I pay tax on under 1 license but for 3 locations, I don't think they allow that either... who is going to sweep the floor and clean the toliets when I am in the brigg??? I hope my wife bring me a nice meal with a file hidden in it..

[ZX7TREV]

You did read it, or you wouldn't have answered it. Anyway, like I said, its a paltry amount, so the Govt., in most cases, won't waste the time trying to track it down. Still, you at least need to tell people the truth and make them wary, if they do get caught...its a very expensive mistake.

T~