Marketplace

Going back to survey made last year wherein operators reported they earned average of
10% profit before taxes, which is almost double the 5.3% to 5.9% America's 100 largest
corporations reported as their profit before taxes, what happens to the gross money that
operators took in prior to splitting on a 50/50 basis with locations? Odds favor loca-
tions by 4 1/2 to 1. In short, locations would be silly to buy their own machines today
when the operator gives, actually gives his locations, $4.50 for every $1 he earns. Here
is why: From every $100 his machine takes in, the location gets $50 and the operator gets
$50 on the 50/50 commission basis. The operator, after deducting all costs and expenses,
according to his own survey report, ends up with 10% profit before taxes or $5 from his
$50. The location can, at the utmost, deduct 10% as his overhead expense for keeping the
machine in his place of business. He deducts $5 from his $50 and winds up with $45 as
his profit before taxes .
Operators on 50/50 must admit they're giving the lion's share of their take away to
their locations. Furthermore, operators know prices, taxes and overhead expenses are
not going down - they're going up - much higher up. The answer is simply that operators
in this service industry must, like all others in every service industry in this nation
including the huge utilities, like electric, gas and telephones, get a "service charge"
of, at the very, very least, $10 off the top of every gross collection and split the
balance on the more equitable 70/30 commission basis - 70!> to the operator - if the op-
erator wants to continue in this business on a progressive and profitable basis this
roaring wild inflationary year of 1974 and for the years of galloping inflation yet ahead.
Isn't it high time, long, long overdue time, to drop a business practise that came into
being with the worst business depression in history during the early '30s? Isn't it high
time to get rid of the antique, outworn and rediculous 50/50 basis of over 40 years ago ?
Now that aluminum penny won't be minted the U.S.Mint, which reports it is producing
35 million copper pennies each day and that demand is for 40 million a day, sees the
country running short of the sales tax pennies and the Mint losing money buying copper
at $1.20 per pound •••• State and local taxes passed $125 million in '73, away up from
'72, but that ain't nothin' yet . State and local taxes already on the way sure to set a
new high record this year of '74 •••• Sincerest thanks to all who commended past issue
of "Marketplace" for publishing some of the letters this newsletter receives in such
outstanding numbers. (In all the years we've been publishing in this industry never has
any publication received as many letters.) ••• Need pictures of the 1935 pinballs of
J.H.Keeney & Co., Chicago, for forthcoming "Pictorial History" edition. If you have any
of these mail quick to: Marketplace, 185 .N. Wabash, Chicago 60601.(Won't be harmed.)
Some moons ago mentioned here the ladies, who have taken over operations on passing
of their husbands, are proving themselves top operators. Charlene Lesnick of Richmond,
Va., Mildred Bunch of Chattanooga,Tenn., June Ball of Marathon,Fla., only a very few of
the many about the nation. We'd like to hear from other of the ladies to get some idea
of the number now active in the industry. (In view of the fact some ladies a bit modest
about reporting in, how's about some of you distribs and operators mailing us their names
and addresses of their firms?) ••• Nev corn sugar substitute may halt any further price
hikes by soft drink bottlers. Hope is there'll be enough to meet demand and that the big
bottlers won't bid the price sky high •••• Very rough news hit the public (4/16/74) that
all price ceilings on food and wages over. Those economists who predicted inflation this
year in two figures, already roaring at 10% and may end up at 15%, may have called the
shot. (Think! Can you continue paying 50% commission to locations and survive?)
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