There’s a moment in almost every small business where you realize the hard part isn’t the product. It’s finding the next customer. In vending, that moment usually arrives with a machine sitting in your garage and no place to put it. And right on cue, someone offers to solve it for you: a locator who will find and sign a location for somewhere between $400 and $1,500.
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Is that a good deal? Sometimes. But the way most people answer the question is backwards. They compare the fee to zero, because doing it yourself feels free. It isn’t. So let me show you the one calculation I’d run, and then the part of the decision that math can’t capture.
The only number you need: your break-even hourly rate
Forget cost per lead for a second. The real question is: how many hours would it take me to land this placement myself, and what’s an hour of my time worth?
Divide the locator’s fee by the hours you’d spend doing it yourself. That gives you the hourly rate at which the two options cost the same.
| Locator fee | If DIY takes 20 hours | If DIY takes 10 hours | If DIY takes 5 hours |
|---|---|---|---|
| $400 | $20/hour | $40/hour | $80/hour |
| $1,000 | $50/hour | $100/hour | $200/hour |
| $1,500 | $75/hour | $150/hour | $300/hour |
Read it like this: if a $1,000 placement would take you 20 hours to land yourself, the locator is “worth it” only if your time is worth more than $50 an hour. If you’ve gotten good enough that it takes you 5 hours, the locator would need your time to be worth $200 an hour. Very few people starting out are in that position.
Where do those hour counts come from? Honestly, they’re estimates, and yours will differ. A reasonable way to think about it: each prospect you work takes maybe an hour in total, spread across a bit of research, a call or a visit, and two or three follow-ups. If one in 20 says yes, that’s 20 hours. If one in 5 says yes, it’s 5. There’s a fuller version, including cost per contact and the other kinds of locators, in this breakdown of vending locator vs lead list costs.
The data itself is almost free now
A few years ago, the list was the expensive part. You’d drive around, write down business names, call front desks, and hope someone told you who the manager was. Today the raw contact data costs cents.
Contact-data tools now sell a decision-maker’s verified email and phone for well under a dollar a contact, often without a subscription. Even if you need 20 contacts for one placement, that’s a few dollars of data. Whether you use a tool or a spreadsheet and a free weekend, the point stands: the data isn’t what you’re paying a locator for anymore. You’re paying them to do the talking.
What you’re actually buying from a locator
When you strip it down, a locator sells you three things:
- Speed. A site this month instead of in two months.
- Avoided rejection. Someone else hears the “no”s.
- Your hours back. Time you can spend on something else.
All three are legitimate. If you already have three machines bought and sitting unplaced, speed is worth real money, because idle equipment earns nothing. If you’re scaling a route and your hours are better spent on operations, buying placements can be rational.
But notice what’s missing from that list: the skill. A locator’s fee is the same for your tenth placement as your first. Your own cost per placement drops every time you do it. That asymmetry is the whole story.
Why I lean toward doing it yourself, at least at first
I’ve worked in commission sales, and the lesson that stuck with me is that getting in front of the right person is a trainable skill with a compounding return. Your first twenty conversations are awkward. By your fiftieth, you know which objections are real, which types of businesses say yes, and exactly what to say in the first ten seconds.
That skill doesn’t stay inside vending. The same process finds ATM locations, laundromat accounts, cleaning contracts, clients for a service business. It’s the most portable asset you can build. I wrote about the way I think about where time goes in evaluating dollar per hour, and prospecting is an odd case: it looks like low-value work early on, but it’s actually an investment in making every future hour more valuable.
If you pay someone to do it from day one, you skip the discomfort and you also skip the education. For a person who wants a business they can grow and eventually own completely, I think that’s usually the wrong trade.
The hidden costs on both sides
To be fair to locators, doing it yourself has costs beyond hours. Rejection wears people down, and some quit before their close rate ever improves. Lists go stale. Follow-up is where most placements actually happen, and it’s the first thing people drop. I’d put every follow-up in a task app so nothing lives only in your head. Something like Todoist is enough, with a date on every “call back after the holidays.”
On the locator side, the fee is usually due whether the site performs or not. For a first machine netting, say, $330 a month, a $1,000 placement fee is about three months of profit before you’re ahead. Some locators offer 30 to 90 day replacement guarantees; get the definition of “failed” in writing. And the ones that look free, revenue-share placers who take a percentage of gross forever, can be the most expensive of all. Fifteen percent of a machine grossing $1,200 a month is $2,160 a year, every year.
I’ve written candidly about the less glamorous parts of this business in the ugly truth about the vending machine business. Placement fees that never pay back belong on that list.
A simple rule I’d follow
Here’s how I’d decide, stated as plainly as I can:
- First one or two machines: do it yourself. The education is worth more than the hours, and the fee would eat months of profit.
- Machines sitting idle with no pipeline: consider paying for one placement while you self-source another in the same month. Compare what each site earns in month three.
- Scaling past the point where your hours are expensive: run the break-even table with your real numbers. If your time per placement times your hourly value is higher than the fee, buy placements without guilt.
A thought to sit with this week: write down how many hours you’d honestly need to land one placement yourself, and what you’d do with those hours instead. If the answer is “watch TV,” the locator is expensive. If the answer is “close a deal at my day job that pays more,” it might not be. Either way, you’ll be deciding with a number instead of a feeling.
