Vending machine commission: how much to pay the location and how to agree it

The vending machine commission (comisión del local) is what you pay the bar, office or gym for letting you place your machine there. There is no official rate: it is negotiated in each place, and how you agree it matters as much as the percentage. 10% of sales including VAT is not the same as 10% of sales excluding VAT, and a fixed monthly fee does not behave like a percentage when a slow month comes along.

In this guide we review the four usual ways to pay the location, what sales it is calculated on, how to know how much commission your machine can handle before negotiating, what to put in writing, and how to settle it each month without arguments.

The short answer

• There is no percentage set by law or by custom. It depends on what that location sells and how much the location values your service.
• Before negotiating, calculate how much the machine leaves without the commission. That is the ceiling: if you pay more, you lose money.
• Agree on what sales it is calculated on (excluding VAT, including VAT, or cash only) and how often it is settled.
• The location invoices you with VAT. If you are under recargo de equivalencia (the Spanish VAT scheme for self-employed retailers), that VAT is a cost.

The four ways to pay the location

• A percentage of sales. The most common. The location earns more when the machine sells more, and the risk of a slow month is shared between both parties.
• A fixed amount per month. Easy to settle, but the risk is yours: if sales fall, you still pay the same. In return, in good months everything left over is yours.
• A percentage with a minimum. The location gets the percentage, but never less than a certain amount per month. It protects the location in slow months and gives the machine the same treatment as a percentage in normal months.
• No commission. This happens in places where the machine is a service for the people who work there, such as many offices or factories: the location does not charge because it wants the machine there. Sometimes it even pays part of the cost or asks for lower prices.

Any of the four can be good. What matters is that the machine’s numbers work with the one you choose, even in a slow month.

What sales it is calculated on

“10% of sales” does not say everything. You need to agree which sales:

• Sales excluding VAT. This is the cleanest base: VAT is neither yours nor the location’s.
• Sales including VAT, that is, everything the machine collected. With the same percentage, the location gets more.
• Cash only from the cash box. This is the easiest to verify in front of the location, but it leaves out card payments, and those are increasingly common. If this is agreed, the location should know.

Using the example figures from our profitability guide: a machine that collects €880 in a month, including VAT, sells €800 excluding VAT. 10% on sales excluding VAT is €80; on sales including VAT, €88. That is a difference of €96 per year on a single machine, because of one word in the agreement.

How much commission your machine can handle

Before offering anything, do the machine’s numbers without the commission: sales excluding VAT minus product cost, shrinkage, travel, depreciation, and the rest of the fixed expenses. What remains is the maximum you could pay the location without losing money. The sensible thing is to pay quite a bit less, because you provide the machine, the product, and the work.

Using the same example, with 800 sales per month at €1.10 and €0.45 cost per unit, the machine is left with €285 before paying the location. This is how what you keep changes depending on how you agree the commission and how the month goes. The figures are made up; they are just to show how the numbers move:

In the normal month, all three are the same. The difference is at the extremes: the fixed amount punishes you in the slow month and rewards you in the good one; the percentage shares the risk; the minimum protects the location without sinking you. If sales in that location rise and fall a lot (a school with holidays, a seasonal hotel), the percentage is safer for you.

You can run this calculation with your own numbers in the vending machine profit calculator, free and without registering: it accepts the location commission as a percentage, fixed amount, or both.

VAT on the commission

Providing space for your machine is a service, and in Spain the location will normally invoice you with 21% VAT, the standard rate. What happens with that VAT depends on your tax regime:

• With a company, under the general regime, you deduct it in your tax returns. The €80 commission costs you €80.
• As a self-employed retailer (autónomo) under recargo de equivalencia, you cannot recover it. The same commission costs you €96.80, and that is what you need to include in the calculation.

Whether the invoice must also include income tax withholding (retención) depends on how the agreement is classified and who owns the location. Ask your accountant before the first settlement. We explain it in more detail in our guide to VAT on vending machines in Spain.

What the location values besides money

For many locations, the commission matters less than other things. What makes them renew, or switch operators, is usually something else:

• That the machine is not empty and does not have expired products.
• That breakdowns are fixed quickly and someone answers the phone. Spanish law makes the location owner jointly responsible with the machine owner toward the buyer, so the location wants to know you will respond.
• That it has what their people want: a gym is not the same as a workshop.
• That it is not a nuisance: visits at quiet times, the area kept clean, no noise.
• Clear accounts: a receipt showing what was sold each time you pay them.

An operator who does all that can offer a lower commission and still win the location.

What to put in writing

• The payment method: percentage, fixed amount, percentage with minimum, or no commission, and the amounts.
• What sales it applies to: excluding VAT, including VAT, or cash only.
• How often it is settled: monthly or quarterly, and how it is paid.
• How it is documented: what document the location receives with the sales for the period.
• VAT and, if applicable, withholding on the location’s invoice.
• Who pays the electricity used by the machine.
• When you can enter to restock and remove the money.
• Exclusivity: whether the location agrees not to place another machine.
• Duration and notice period for ending the agreement, for both sides, and when the commission is reviewed.

The rest of the agreement with the location (breakdowns, insurance, liability) is covered in our guide on how to start a vending business in Spain.

How to settle without arguments

The commission becomes a problem when the location does not know where the figure comes from. To avoid that:

1. Work out each machine’s sales for the period from what you note on each visit: what was there, what you load, and what you remove from the cash box.
2. Apply the agreement exactly as written: the base, the percentage, the minimum.
3. Give the location a receipt with the period, sales, base, commission, and a unique number.
4. Pay them and keep their invoice together with the receipt.

Done this way each month, the settlement becomes a routine task and the location sees that you pay based on what is actually sold.

Common mistakes

• Promising a percentage without first calculating what the machine leaves in that location.
• Agreeing to “10%” without saying of what: including VAT or excluding VAT changes the amount every month.
• Accepting a high fixed amount in a seasonal location: you pay the same in slow months.
• Forgetting the VAT on the commission if you are under recargo de equivalencia.
• Settling from memory, without sales by machine, and arguing every month.
• Not reviewing the agreement when the machine sells much more or much less than at the start.

Frequently asked questions

What percentage is given to the location for a vending machine?

There is no fixed percentage. It is negotiated in each place according to what it sells and how much the location values the service. Before negotiating, calculate how much the machine leaves without the commission: that is the maximum you could pay.

Is it better to pay a percentage or a fixed amount?

With a percentage, the risk of slow months is shared. With a fixed amount, it is yours, but you earn more in good months. If sales in that location rise and fall a lot, the percentage is safer.

Is the commission calculated with or without VAT?

Whatever is agreed. The cleanest option is on sales excluding VAT, because VAT belongs to no one. If it is calculated including VAT, the location gets more with the same percentage.

Does the location have to invoice me?

Yes: it charges you for a service, and normally it will invoice you with 21% VAT. If withholding also applies, ask your accountant.

Who pays the machine’s electricity?

Whatever is agreed. Usually the location pays it and it is included in what it charges, but it should be put in writing.

How often is the commission paid?

Monthly or quarterly, depending on the agreement. The important thing is to give the location a receipt with the sales for the period each time.

Can you place a machine without paying commission?

Yes. In many offices and factories the location does not charge because the machine is a service for its people. In return, it usually asks for good prices and that it is never empty.

Conclusion

The location commission is not decided by custom, but by looking at the numbers for each machine. Calculate what it leaves without the commission, choose the payment method that can also withstand a slow month, put in writing what sales it is calculated on, and settle each month with a receipt. That way the location gets paid fairly, you know what you earn, and the placement lasts.

This article is informational and does not replace advice from your accountant. The VAT and any withholding on the location’s invoice depend on your case: confirm them before the first settlement.

Useful links

• Vending machine profitability: how much one really makes: the full calculation, with an example.
• Free vending machine profit calculator: your numbers, with the location commission.
• VAT on vending machines in Spain: the rate for each product and for the commission.
• How to start a vending business in Spain: the rest of the agreement with the location.
• Vending management software: what it should do and how to choose it.