Love this post, for very personal reasons. My family were German Jews living in Germany for generations, and in the 1930s before it got really bad, they moved to the USA and started a water cooler business.
Back in the day, water coolers were expensive to manufacture, roughly $500-1500 per unit. The company was ostensibly a water company, but would sell water with a minimal profit. Their real money renting out the water coolers at $10-20/month.
Then in the late 1990s / early 200s China came online. Those $500 water coolers all of a sudden were being sold for $70. Obviously, it's pretty difficult to rent out a $70 piece of equipment for $10/mo. So the business had to shift from making money off of equipment to water, a much lower profit margin business.
A few tips for any entrepreneur going into this business:
- Obviously sell hard during the summer when it's hot
- Asian folks often prefer hot water to cold, so have some solution that caters to them.
- The bottles themselves can become a relatively large expense. Think about how to deal with them.
- Moving heavy bottles of water is extremely labor intensive. Your workforce will eventually become unionized, build that into business plan.
- Drinking spring and/or purified water is often subject to trends. Have a plan for when municipal water becomes "hip" or when customers demand that you reduce your carbon foot-print and stop shipping in water from out-of-state.
- A common complaint about water coolers is that people find bugs in their water. More often than not, this has nothing to do with you water, and has everything to do with the location in which it's placed. You won't be able to fix every situation, have a plan for this.
Back in the day, water coolers were expensive to manufacture, roughly $500-1500 per unit. The company was ostensibly a water company, but would sell water with a minimal profit. Their real money renting out the water coolers at $10-20/month.
Then in the late 1990s / early 200s China came online. Those $500 water coolers all of a sudden were being sold for $70. Obviously, it's pretty difficult to rent out a $70 piece of equipment for $10/mo. So the business had to shift from making money off of equipment to water, a much lower profit margin business.
A few tips for any entrepreneur going into this business: - Obviously sell hard during the summer when it's hot
- Asian folks often prefer hot water to cold, so have some solution that caters to them.
- The bottles themselves can become a relatively large expense. Think about how to deal with them.
- Moving heavy bottles of water is extremely labor intensive. Your workforce will eventually become unionized, build that into business plan.
- Drinking spring and/or purified water is often subject to trends. Have a plan for when municipal water becomes "hip" or when customers demand that you reduce your carbon foot-print and stop shipping in water from out-of-state.
- A common complaint about water coolers is that people find bugs in their water. More often than not, this has nothing to do with you water, and has everything to do with the location in which it's placed. You won't be able to fix every situation, have a plan for this.
Good luck! You're up against some heavy-weights!