If Easy Ice had been available when I was an operator, we would have been all over it. On numerous occasions, I would walk into the office of our CFO (my brother, Pete Tullio) and ruin his day by announcing that a great existing account needed three ice machines – a hefty $12,000 outlay. Then, there was the “good news, bad news scenario” from the sales department. The good news: We landed a great new account. The bad news: An ice machine is needed.
Slow ROI
Ice machines can be bad news for operators on many levels. As an OCS operator, we were spoiled when it came to ROI. We could pay for a bean-to-cup brewer in six months, driven by strong product sales, combined with a reasonable quarterly rental. Ice machines, even with a $250 monthly rental, can easily make an operator wait 18 months to two years, just to break even, especially when the cost of installation and service is factored in.
A simple model
If the need for ice machines is seen by an operator as bad news, Easy Ice offers a solution that is certainly good news. “Our model is simple, and operators love it. We buy the ice machines that an operator needs, and we lease them back to the operator,” said Ryan Kelly, chief marketing officer at Easy Ice.
At that point, operators can do one of several things:
- Either pass the cost on to the customer.
- Absorb the cost, if they need to do that for some reason – maybe as part of a very large deal.
- Charge the customer a monthly rental that is higher than the monthly lease cost – an increasingly popular option that results in immediate positive cash flow.
There is another option that is gaining interest. “Some operators prefer to let us step in and deal directly with their client. It simplifies their life and allows them to focus on their business, without having to worry about ice machines,” he said.
Two enticing features
As Kelly points out, the Easy Ice program allows operators to preserve capital. While that is an attractive feature, there is another part of the program that may be even more enticing to operators. “We take care of the service – from site surveys to installation (in most cases) to any service calls. We will even replace the machine if it goes down and are prepared to step in and provide bags of ice to the client to hold them over,” Kelly said. “For the operator, the biggest and costliest headache – the service component – is completely covered.”
Increasing demand
The demand for ice machines is only increasing. Arthur Siller, VP of Evergreen Refreshments, said that requests for ice machines are becoming common place. “When I was selling OCS in Los Angeles several years ago, there were occasional requests for ice machines, but only at the most elite locations. That has changed. Ice has become an essential part of the refreshment program at many of our accounts.”
This increasing demand for ice machines can put financial pressure on operators of all sizes, but Kelly feels that Easy Ice can level the playing field for operators. “When you are working with Easy Ice, a smaller operator doesn’t need to flinch when they are told that getting that new big account requires multiple ice machines,” Kelly said. “In many ways, our involvement levels the playing field for an operator who is trying to compete with the industry’s largest companies.”
The service challenge
While ice machines are an asset and certainly do offer a return on investment – a slow return, but a return nonetheless – operators have good reason to shy away from trying to navigate the ice machine business on their own. In addition to the necessary capital outlay, the current labor market has made it difficult enough to find qualified vending and OCS technicians; finding one with ice machine experience is a definite challenge.
“We have 35,000 machines in operation, 20 branches, and of those 20 branches, we have five of them with refurbishing facilities,” said Kelly. “We have been at this for 14 years; we serve the entire country, and we have numerous third-party relationships with service providers to strengthen our ability to serve our customers. We can service and replace machines quickly and easily.”
Kelner’s endorsement
Last month in a monthly report to operators, Mike Kelner of VBB Advisors, one of the industry’s leading business brokers, identified Easy Ice as a company that can build value for an operator, even when they are just one year away from selling their business. Calling it a “no-brainer,” Kelner explained why he feels that Easy Ice makes sense:
- The last thing an operator needs to do is spend 3 to 4 thousand dollars on an ice machine when they are thinking about selling their business.
- The model is becoming increasingly popular and, in fact, Easy Ice has now developed a program to buy out existing ice machines, returning much-needed capital to operators, while they still enjoy a positive cash flow rental.
The NAMA Show – A real eye-opener
Kelly said the 2023 NAMA Show in Atlanta was a huge success for Easy Ice. “We had an opportunity to introduce the concept to operators – from both the vending and OCS side. It was well-received to say the least,” said Kelly. “Easy Ice has generated tremendous operator interest with our new buyback program, which involves buying out an operator’s existing ice machines, allowing them to leave the ice machine portion of the business to us. It certainly has our phones ringing since we introduced the opportunity to operators in Atlanta.”
At the convention, Kelly and his team found out something that they knew already: operators would love to get out of the ice business for two reasons: the equipment cost and the service expenses. “The fact that we can eliminate both of those issues and allow operators to profit from day one – it was a real eye-opener for them,” he said.
To learn more about Easy Ice, contact Bruce Trecek, national affiliate program director, at [email protected] or 913-915-6162.
ABOUT THE AUTHOR
Bob Tullio is a content specialist, speaker, sales trainer, consultant and contributing editor of Automatic Merchandiser/VendingMarketWatch.com. He advises entrepreneurs on how to build a successful business from the ground up and specializes in helping suppliers connect with operators in the convenience services industry – coffee service, vending, micro markets and pantry service specifically.
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