Thinking of Making and Bagging Your Own Ice?
Should you make packaged ice in-store?
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THE MYTH: You can make and package your own cheaper.
On the surface it might appear in store production will produce spectacular profits. BUT, Did you ever take a moment to think where that statement comes from? - The manufacturers of in-store ice machines. What do they include in their figure? Only the variable costs - water, electricity, bags and some labor. How about the cost of the Ice maker, the storage freezer, the store space, the maintenance on the equipment, personal property taxes, insurance, shrinkage and the cost of money? How many bags must you sell to pay off the equipment purchases and how long does it take? 4 years, 5 years, sometimes 6 years or more. It varies with the number of bags you sell.
Why would you wait that long when you can start making profit immediately?
DON'T YOU THINK YOU SHOULD KNOW THE WHOLE STORY?
THE REALITY: Let's look at ALL the numbers.
When buying packaged ice from an IPIA member PROFITS start with the first bag sold! You reduce your labor expenditures. You save space in your store so you can sell more items and make more money. You reduce your liability exposure where liability claims for workers back injury claims averaged over $10,000 per claim, not to mention the potential contamination liability should one of your customers get sick from the ice. You eliminate the weekly maintenance and sanitizing and other potential problems as a food manufacturer. IT JUST COULD NOT BE SIMPLER!
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ESTIMATED ANNUAL COST COMPARISON
Based on 5,000 seven-lb. bags per year*
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In-Store Production Purchasing
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Purchasing Packaged Ice From an IPIA Member
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| (a) |
ICE MAKER COST - $6,320 Depreciated over 7 years Includes fgt, installation and sales tax |
$903 |
$0 |
| (b) |
MERCHANDISER COST - $2,300 Depreciated over 7 years
Glass door with fgt, installation
and sales tax |
$329 |
$0 |
| (c) |
ICE BAG COST Includes name, weight, and phone number on the bag to meet labeling laws |
$446 |
$0 |
| (d) |
LABOR 165 hours @$10.00/hr, 30 bags per hr average |
$1,666 |
$0 |
| (e) |
REPAIRS/MAINTENANCE Repairs per year, average over 7 years |
$450 |
$0 |
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Routine Maintenance including water filter changes |
$250 |
$0 |
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Extra ice while machine is being repaired or Unable to keep up with hot weekend demand |
$_____ |
$0 |
| (f) |
WATER, ELECTRIC and SEWER
($60 is electricity for merchandiser) |
$330 |
$0.01 |
| (g) |
PERSONAL PROPERTY TAXES |
$216 |
$0 |
| (h) |
INSURANCE Equipment and liability |
$250 |
$0 |
| (i) |
BREAKAGE, MELTAGE,
SHRINKAGE
4 bags /week @$1.29 |
$268 |
$0 |
| (j) |
COST OF MONEY $8,620 @7% |
$302 |
$0 |
| (k) |
PURCHASING PACKAGED ICE FROM IPIA MEMBER |
$0 |
$_____ |
| TOTAL ANNUAL COSTS |
$5,410 |
$_____ |
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(or $1.08 per bag) |
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*Sell less than 5,000 bags per year and the ROI is greatly extended. |
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