At home, I have two jars of change. Usually, when it is time to go to Las Vegas, I try to use up the
change.
Another person who had jars of change was Jens Molbak, who was an analyst at Morgan Stanley (yes, even
high-priced bankers deal with such mundane things). While studying for his MBA at Stanford, he had the
idea of making a business out of loose change. A few years later he founded
Coinstar .
Basically, he designed machines that – yes – allow consumers to turn their change into cash. Chances are
you have seen them at your local grocery store. A Coinstar machine can count up to 600 coins per minute. Apparently, a shopper in California processed $8,105 in a Coinstar machine.
There is lots of money to be made from change. In the past quarter, Coinstar generated $24.5 million in revenues, which was up 35 percent from the same period a year ago. Comparable sales growth was 12 percent (based on machines installed for more than one year). The net loss was $5.5 million. Although, the company has
$83.6 million in cash.
In all, Coinstar has more than 7,600 machines installed. Why not leverage these? Well, Coinstar
has. The machines, in fact, can deliver printable items – which can be ordered over the Net. In other
words, this can be a convenient way to pick up tickets, coupons and even prepaid cash cards.
The company is expanding overseas. There are pilot programs in three supermarkets in the U.K. Apparently,
the response has been strong so far.
Every year, Americans have about $140 billion in loose change – which is approximately $600 for every man,
woman and child. Yet, the company is the first and only one to have a nationwide network of self-service
coin counting machines. While the company should experience more growth from this business – both in
the U.S. and internationally – the real promise of the company is from other services. Yes, a penny
processed is a penny earned.
