Issue before last I wrote about one retailer’s experience over a three-year leasing arrangement with a coffee machine company that wasn’t working for him. This brought three different responses.
First up, from Andrew Whyte, who writes: “The story chimes with ours. We had been selling coffee for years with a free on-loan machine from a local company, but it was becoming unreliable and tired.
“Through our symbol group (Bestway), we contacted Rijo42. The rep came out and gave a convincing demo of the machine, including free taste tests to customers who were impressed with the quality. We, too, got a 5,000 free drinks package.”
However, when the engineer installed the machine Andrew found out that the rep settings were at optimum quality. The engineer set it to use less ingredients and bring more profit. “After he’d gone and I’d tested the drinks with customers I had to reset the ingredients usage to give a decent drink. 5,000 free drinks really means about 2,000 at an acceptable level. I protested when the ingredients ran out and they sent us more, but even so we got less than six months’ ingredients, when 5,000 should have equalled three years.”
Andrew says his hot drinks have gone from being profitable to loss-making, but he still has two-and-a-half years to go on the lease.
“My advice would be, do not get seduced by what sounds a fantastic deal. Try to use a local company and get spot rental on a slightly older machine, rather than tie yourself to a lease that may not work out longer term. Buyer beware!”
Andrew’s story was so similar to Mr Anon’s that I thought it must be the same company. It wasn’t. It’s beginning to sound like a recipe for profits for the coffee machine companies rather than the retailers.
Then I got an email from Surinder Jheeta (Beejays, Oxshott). Brief and blinding. “We have had a Nescafé hot drinks machine for more than eight years. Cost approx £110 + VAT. Low maintenance, easy to use, variety of hot drinks. No need to connect to mains water, hot water reservoir. Cost of cups inc lids, sugar, milk, approx 60-65p, we sell at £1.
“If you sell 60 cups a week, the machine is paid for in five weeks.”