Friday, March 18, 2011

Bottled Water Tip #9

Bottled Water Tip #9

Once you've decided to go into the bottled water business, you must choose the direction you want to take. There are three basic choices, each with its own advantages:

Large bottle (3-, 5- and 6-gallon) office and home delivery

The large bottle business typically involves placing bottled water coolers at each customer's location, whether home or office. Typically, the route person stops by each location bi-weekly to pick up empty bottles, drop off full bottles and to replenish other supplies as needed.

Profits are made from bottled water sales and delivery service, cooler rentals, coffee service and cup sales.

This business typically allows for high profit margins and a steady, less volatile level of activity. Your customer base will be built and maintained through direct sales, including phone calls and personal meetings and/or media advertising.

Retail sale of PET and one-gallon bottles (including private label)

The retail business typically involves a two-step sales and marketing approach. Your product is sold through a distributor, which then markets to a variety of retail outlets, such as supermarkets, convenience stores, gas stations and food marts.

Typically, profits are relatively low on a per/bottle basis, so volume sales are important. Additionally, choosing the right distributing company is critical. You'll want one that is proactive in placing your product on the shelves of their customers.

If you're planning to operate in a wide geographical area, you may want to consider bottling at several strategically located plants to minimize shipping costs. Norland's turnkey small bottle bottling plants are compact, requiring only about 1,500 square feet of space.

Combine the large-bottle home delivery operation with a small bottle retail operation.

Your third option may be the best: combining a large bottle home/office delivery business with a small bottle retail operation. The reasons are simple:

1. By entering both large and small bottle markets, you are diversifying your business. One market may develop quicker than another, thereby providing you with time and cash flow to build the other.

2. By placing your large bottles in homes and offices, you are creating name awareness for your brand. When these people see your small bottles on retail shelves, they'll recognize it and be more likely to buy it, and vice versa.