In this video, you will hear Adam from BC Systems talking about what profits you can expect, as well as the cost options and operating your very own Bitcoin ATM Company.
He divided his presentation into four parts: Location, Cost, Marketing and Fees.
Location is probably the most important part of the planning and operating your Bitcoin ATM Company. Of course, there are different variables when it comes to choosing a location like foot traffic, competition, and potential fees. In his experience shopping malls are the most successful locations for a couple of reasons.
First of all their working hours. They are usually open from 8 A.M. to 9 P.M. and they also tend to work on holidays, so the overall availability of the machines is going to be excellent.
Secondly, shopping malls present a safe place for people. When they go to a public place, where there is a lot of crowd, they feel like they are going somewhere reputable and feel much safer than going to let’s say a liquor store or a smoke shop where there aren’t usually a lot of other people around. This is especially true for guys who are making large transactions, they always want to feel safe and comfortable carrying their money.
The cost of the location is of course determined by the foot traffic. So, if you are trying to locate your machine in a shopping mall, the fees are going to be higher than in a liquor store or a smoke shop. When you are dealing with a liquor store you are negotiating with the owner, and there is always a possibility to get a better deal as opposed to a shopping mall where you are negotiating with a property management company where they are pretty strict with the leasing terms.
Another thing about shopping malls is that they will try to lock you for at least 12 months or even multiple years. That way you are kind of gambling and risk paying the rent for a significant period of time even if you are not making any profit. On the other hand, liquor stores usually do not practice such business models so you can organize a monthly arrangement and lower the risk of money loss due to unprofitable machine.
The flexibility in negotiation with the liquor store owners can come in handy in a couple of ways. First of all, you can always negotiate the price and get a better deal. Also, you can define a business model where the lease is not charged by a fixed price, but rather with the percentage of profit. That way you will be covered for money loss on slower months, and more importantly, the owner will be motivated to involve in the process and turn up the profits which can be a win-win situation for both parties.
When it comes to marketing, it is closely related to the location. If you put your machine on a location with a good foot traffic that’s great marketing just based on the location itself. Furthermore, you can advertise your location online by registering it on coinatmradar.com. And, of course social media is a marketing channel which you cannot afford to miss nowadays, whichever business you are running. Another good practice is to create specials where you will lower the fees on specific days.
Another important aspect of marketing is having a great customer service. Word-Of-Mouth is still important so make sure to provide your customers with a great experience so they will come back to use the machine again, and also recommend it to other people.
In the end, Adam talked about the fees that operators are charging for every successful transaction.
According to him a good machine on a regular month could do about $30.000 in transactions. So the profit you make will be the predetermined percentage of that sum. These fees are usually around 10% – 12%.
In his example, Adam used a 12% fee and got the $3.600 income from which he subtracted the costs:
- The biggest cost, of course, is the rent which goes around $150 – $400 depending on the location.
- Then you get the supplies like paper or reparations which cost around $20 – $40 per his calculations.
- Insurance is a thing that you can avoid in rare situations, but certainly is better to have it, and it goes around $40 – $60.
- And compliance that you need to have to in order to operate your business which will cost you around $100*.
* (from editor) Compliance costs of $100 per month is below the average costs reported by industry operators. Sometimes these costs are higher than $100.000 as advanced costs and additionally ongoing costs to maintain compliance policy in accurate state and the costs for actually doing the compliance processes.
So, in the end your profit should go somewhere around $3.000 – $3.300. Of course, these are rough calculations, and some machines can have a higher or lower volume depending on various factors.
To summarize, the important things in operating a Bitcoin ATM business are to choose a good location, negotiate a suitable business model with the landlord and plan a good marketing strategy. Having a great location is one of the factors for successful operating of Bitcoin ATM business.