Total Cost of Ownership: An Ice Vending Machine Over 10 Years
A full 10-year TCO model for an ice & water vending machine — capex, financing, opex, major repairs, and end-of-life value.
- ▪10-year TCO on a financed mid-size unit: $215K–$265K all-in.
- ▪Years 8–10 are pure profit once the equipment loan retires in year 7.
- ▪Healthy-site cash-on-cash on the down payment: ~17–20x over 10 years.
Year-1: capex, install, and financing
Base case: a $78,000 mid-size ice & water unit, $14,000 site work, $4,000 permits and soft costs — $96,000 all-in capex. Financed with 15% down and a 7-year SBA-Express equipment loan at 11% APR, year-1 debt service runs ~$15,700.
Add insurance ($1,200/year), business licensing ($400), and initial filter/RO charge ($600). Total year-1 cash out: ~$32,500 including down payment.
Years 2–7: steady-state opex
Electricity ($2,800–$5,000/year), water/sewer ($600–$1,300), filters and consumables ($900–$1,700), annual service ($600–$1,200), insurance and licensing ($1,600). Operating opex: ~$6,500–$10,800/year.
Add ongoing debt service through year 7 (~$15,700/year). Major scheduled service in year 5 — compressor inspection and bagger refresh — runs $2,200–$4,500.
Years 8–10: post-loan profit and end-of-life
Debt is retired after year 7. Years 8–10 are pure operating cash flow at 60–75% margin: typically $32,000–$56,000/year per unit at a healthy location.
End-of-year-10 fair-market resale value for a well-maintained U.S.-made unit: $18,000–$32,000. A second compressor rebuild ($3,500–$6,000) usually happens between year 8 and year 11.
10-year TCO summary
Cumulative cost (capex + opex + financing + major service): $215,000–$265,000 over 10 years on the base case.
Cumulative revenue at a healthy site ($4,200/month average): $504,000. Net 10-year cash before tax: $240,000–$290,000. Cash-on-cash return on the original $14,400 down payment: ~17–20x.