You might have seen those Best Buy Express kiosks at airports and train stations around the country. These souped up vending machines don’t dispense Cheetos and gum but rather premium Beats headphones, iPads and even video game consoles with the swipe of a credit card.
I always wondered how much money Best Buy makes off those things. As it turns out, quite a bit.
ZoomSystems, based in San Francisco, developed Best Buy Express and earns a fee off every transaction at the 200 kiosks in the United States. Founded in 2002, the company also makes automated retail systems for Amazon and Macy’s.
According to a source close to Zoom, Best Buy Express generates anywhere from $10,000 to $50,000 a month per kiosk. Do the math and that means the consumer electronics retailer, based in Richfield, Minn., generates roughly between $20 million and $120 million a year in sales off those machines. (As it turns out, the $50,000 a month kiosk is located at Hartsfield International Airport in Atlanta.)
Since Best Buy generates more than $50 billion a year in revenue, that might seem like chump change. But when you consider that Best Buy Express machines don’t require human employees, advertising, or price discounts, you can assume that the profit margins from those blue kiosks are sky high.
No wonder Best Buy CEO Hubert Joly would like more of them. In an interview a year ago for my upcoming book Rebuilding Empires, Joly suggested that he was open to more formats like Best Buy Express.