Technical vs Operational Cost: What Really Drives Profitability in Ice Cream Vending Machines

For your ice cream vending business to succeed, the core issue lies in profitability. The key to profitability is not simply controlling total expenses, but distinguishing between the nature and differences of "one-time investment" and "ongoing consumption". Combining real market practice data, this article breaks down the core components of two types of costs—technical costs and operational costs—and clarifies the profit logic of ice cream vending machines.

Technical Costs vs. Operational Costs: "One-Time Investment" vs. "Ongoing Consumption"

Technical costs and operational costs have completely different natures, and it is a common misunderstanding to confuse them. Therefore, we need to clearly define their differences.
Technical or equipment costs are fixed expenditures that are either one-time or amortized over the long term. Their core purpose is to ensure the equipment meets market standards and operates successfully. This expenditure will not be repeated in the short term (unless the equipment is upgraded or replaced).
Operational costs are the daily cash flow consumption of the business, which fluctuate with sales volume. They cover costs directly related to operations, such as raw materials, energy consumption, venue fees, and maintenance. As the core variable determining monthly profitability, operational costs differ from technical costs in their flexibility. Expenses can be reduced through appropriate choices, but ignoring them will continuously erode your profits.

Breakdown of Technical Costs

The core of technical costs is to enable the legal and safe operation of the equipment, and every item is strongly related to the market's compliance requirements. The following are the most common components of technical costs:
Machine procurement cost: The largest single fixed expenditure, with significant price differences between different machines. For example, entry-level ice cream vending machines are relatively affordable, while large-capacity models or those with multiple functions cost more.
International compliance and certification cost: A necessary expenditure to enter the market; legal operation is impossible without compliance certification. Therefore, the cost of obtaining these certifications is high but crucial.
Installation and commissioning cost: Installation costs are extremely low. For instance, Huaxin’s models support plug-and-play, requiring no complex assembly or venue modification. One person can complete the placement at the site, and commissioning can be done through remote guidance after power-on, with almost no additional expenditure.

Breakdown of Operational Costs

Operational costs are directly linked to sales volume and local scenarios, and each item can be optimized based on local market characteristics:
Raw material cost: The core component of operational costs. According to Huaxin’s customer data, the cost per cup of cheese-flavored ice cream is approximately $0.21–$0.25, and that of yogurt-flavored ice cream is about $0.28. If placed in a U.S. shopping mall, the average monthly raw material cost is roughly $1,260–$1,500. Entrepreneurs have two procurement options: 1) Purchase standardized raw materials from Huaxin; 2) Source locally to reduce cross-border logistics costs.
Electricity cost: Affected by electricity price differences, but high-efficiency models can reduce energy consumption. For example, Huaxin uses imported Embraco compressors from Brazil, combined with the machine’s night mode, which can reduce energy consumption by 30%, with a daily power consumption of only 10–12 kWh. Based on the average U.S. electricity price of $0.15/kWh, the average monthly electricity cost is approximately $45–$54.
Cleaning and maintenance cost: Labor costs are high, so automated functions are the key to cost savings for the machine. The one-click cleaning function of ice cream vending machines greatly reduces cleaning costs. 98% of faults can be resolved through remote video guidance, and the machines come with a 1-year global warranty. Operators’ annual spare parts expenditure is only $100–$200, far lower than the cost of local maintenance services.
Venue fee and restocking cost: Venue fees vary by market—monthly fees are about $150–$300 for U.S. shopping malls and €200–€400 for core business districts in Europe; no fee is required for self-owned venues. Restocking costs are related to the machine’s capacity and ice cream sales volume: the higher the sales volume, the more frequent the restocking.
Other miscellaneous fees: Account for an extremely low proportion, mainly including occasional consumable replacements, and monthly expenditure is negligible.

What is the Core of Profitability?

Combining the real situation of Lisa, a U.S. customer, we analyze the impact of the two types of costs on profits:
Amortization of technical costs: Machine + transportation/customs declaration/certification = total $9,500. Amortized over 3 years, the average monthly cost is approximately $264.
Operational costs: Raw materials ($1,260) + venue fee ($250) + electricity fee ($50) + maintenance ($50) = total $1,610, accounting for over 98% of monthly expenditures.
Monthly revenue and profit: 200 cups/day × $4.5/cup × 30 days = $27,000; profit is $25,126.
In summary, in the market, technical costs are fixed and small-scale expenditures, while operational costs are the core variable affecting profits. For example:
If the cost per cup of raw materials is reduced by $0.03 through local bulk procurement, $180 can be saved monthly.
If the venue fee is reduced from $250 to $200 through advertising revenue sharing, an additional $50 can be saved. Together, this increases monthly profit by $230.
Conversely, choosing the wrong equipment (e.g., low-cost, low-efficiency models) may erode profits due to high energy consumption and frequent faults.
Another example is a German customer: By promoting through local internet celebrities for machines placed in Munich scenic spots, the daily sales volume increased from 200 cups to 800 cups. Operational costs only increased proportionally, while the venue fee remained at €200. The monthly profit exceeded $100,000 directly. This also proves that in the market, operational costs can decrease as sales volume scales up, while technical costs cannot be changed. Therefore, the optimization space for operational costs is far greater than that for technical costs.

How to Optimize Both Types of Costs to Maximize Profits?

The core of profitability is to control operational costs and optimize technical investment, which can be advanced simultaneously:
Prioritize "compliant + durable" models. This avoids subsequent certification supplementary fees, and the 3-year maintenance cost is over 60% lower than that of low-cost models.
Select machine functions based on needs. Choose an ice cream vending machine with an appropriate capacity to avoid paying for excess capacity; select machine functions based on real local needs to avoid functions that seem advanced but have no practical use.
Source raw materials locally. Prioritize cooperation with local suppliers to reduce cross-border logistics tariffs and freight costs; use APP sales data to predict demand and avoid backlogs of perishable raw materials.
Reduce energy consumption and labor costs. Enable the machine’s night mode to save 10% of electricity fees; make full use of remote control functions to reduce on-site maintenance visits.
Tap into additional revenue to offset expenditures. The order screen can display local advertisements, generating $200–$300 monthly revenue per machine, which directly covers the venue fee; print local brand logos on cup bodies to earn an additional $0.05 per cup, increasing monthly revenue by approximately $90.

Practical Market Suggestions

Ultimately, operational costs are the core driver of long-term profitability. Although technical costs are a necessary upfront investment, choosing the right machine can actually reduce operational costs (e.g., energy-saving compressors, automated cleaning functions). The following are specific action suggestions:
For New Entrepreneurs
Do not focus on upfront prices. Compare models based on the total cost of ownership (upfront price + 3-year operational costs). The annual cost of a low-quality machine may be higher than the 3-year cost of a high-quality one.
Conduct small-scale testing. First, place 1–2 machines at high-traffic, low-venue-fee locations, analyze sales data, and expand only after selecting profitable locations to avoid blind bulk procurement.
Prioritize automated functions. Labor expenditure is high; functions such as remote monitoring, one-click cleaning, and stock-out reminders are excellent options for reducing operational costs, which can lower monthly labor expenditure from $300 to below $50.
For Experienced Operators
Optimize equipment combination. Replace old models with new ones to reduce electricity and maintenance costs by 30%; equip scenic spots with large-capacity ice cream machines and communities with standard models to accurately match usage needs.
Fully expand additional revenue. Obtain passive income through machine screen and cup body advertisements; launch limited-edition flavors in collaboration with local brands to increase customer unit price; initiate social media topics and leverage users’ spontaneous sharing to gain free traffic.
The profit logic of ice cream vending machines is simple: Technical costs are one-time investments—choosing compliant, durable, and automated equipment can reduce operational costs at the source. Operational costs are long-term investments—through local procurement, energy-saving optimization, and tapping into additional revenue, you can maximize profit margins.