Water Business: Franchise or Independent?
Supplying bottled safe drinking water is a booming business nowadays. If you have enough capital, you can either get a franchise of a known water refilling station or go independent and start your own brand from ground up. Either which, you really need some serious thinking but the profits from this kind of business is very promising.
However, franchising or going independent has both their share of advantages and disadvantages.
Franchising a water refilling station can mean capital infusion than being independent. Franchising fees can range from around P800 thousand to more than P1 million depending on the franchise, the space, and the location. On the other hand, being an independent seller can cost an initial investment of around P400 thousand to P1 million, based on the capacity of the tanks and filtering system.
Most franchisees, however, enjoy a head start in terms of starting their operations rather than the independents since franchise programs include management assistance/support in their package. This way, new franchisees are guided on how to start their operations while independents have to commence on their own and rely mostly on their entrepreneurial instinct.
Franchise packages likewise include marketing programs for the franchisees which will definitely help in selling their products. Independent sellers, on the other hand, have to come up with their own promotional scheme to attract their buyers. With a marketing plan clearly laid down, franchise holders enjoy name recall and brand attachment to entice the customers while independent sellers have to be more creative in this aspect to gain a share in the market.
On the other hand, independent sellers have the luxury of setting their own prices. Some independent sellers can lower their prices to P35 per gallon while franchisees could only offer around P40 on the same volume because of the royalties they have to pay, which is based on the quantity they sell. Most franchisees revealed that they could not afford to reduce their prices because, aside from the royalties they have to pay, they are also bound by uniformity in their prices included in the franchise agreement. Independent sellers revealed that lowering their prices is their main marketing strategy, considering that franchisees already enjoy the name recognition from clients.
In the end, whether you decide to franchise or become an independent seller, the water refilling station business is definitely a good investment to venture into. No matter how these stations have grown in the vicinity, water remains to be a basic need and you will definitely have a household or company to supply their water needs. But you must be aware of how stiff the competition has become. Thus, you need to provide quality service to be able to come up with loyal clients.
One Response to “Water Business: Franchise or Independent?”
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I need to know more about water refilling business (independent) particularyly in the area of machineries to be used and its functions and the processes involved. I also want to know the most commonly used machines for this purpose and the minimum capital outlay as a beginner.