As any food and beverage operator is aware, there is a multitude of commercial catering equipment on eBay. There is a raft of combination ovens, commercial fryers, industrial chargrills, induction hobs, rack machines, and enough canopies and baffle filters to cover the o2 arena
All of it available at a substantial discount of list price, fit for any new commercial kitchen design, easy supply, simple installation, a massive saving for your new restaurant. Well when I say saving I of course mean, a massive risk with your investment capital with a high percentage chance of failure and problems.
Now I know what you're thinking, as a specialist catering equipment supplier you would say that, it eats into your profits why buy from you at your discount of list, (substantial, and we will beat most companies) when I can get this piece of kit at maybe 80% of the list price. I don’t need your stock, I’ll be fine by myself. If that is your attitude then I wish you well with your endevours and hope you reap the obvious rewards
But before you go into a late night drunken bidding war with number1chef316 tonight, let me make you aware of a couple points that you may wish to consider. If this commercial catee0ring equipment is the answer to all your needs, and anyone else opening their first industrial catering operation, then why am I not buying it all. Why do I not have a dedicated member of staff that scrolls eBay all day, picking up the best value catering equipment at knock down prices and selling it to my clients? After all you may have one scheme you’re working on, you may even be sourcing for 10- 20 different sites; but I’m sourcing for hundreds. I have an extensive list of stadia, restaurants hotels, schools, corporations that call me whenever they require commercial catering equipment. (and I would like to thank my father Alan Rees for bestowing such a prominent client list to my care) surely I could make a fortune if I just bought up all the stock, stored it in our warehouse until needed then offered to my respective clients as and when needed for substantial financial gain and savings for my client base. simple enough right, so have a think why I don’t, have a think why I choose instead to work on much tighter margins by sourcing only new catering equipment for my clients, now also ponder why our client retention is so high. To those not quite up to speed, let me explain how a hotel group normally runs its food and beverage operation.
Company strategies normally allow two budgets for any catering operation, capital expenditure and maintenance.
A very brief word on each... Capital expenditure amounts to, normally, a yearly figure...all the chefs and maintenance lads line up with the CEO, COO, and all impotent CFO and decide based on the previous year’s ROI how much they will have to play with, what they will spend on, that financial year, what the expected returns will be and what they spent last year, if they spent very little and turned a decent profit, unfortunately most executives aren’t going to see a reason why they should spend this term. Brutal fact of business and why I attempt to operate this blog at a loss, to justify the new holiday home I will be working from next year :)
Aside from Capex, yeah, that’s what it stands for, they will also have an ongoing maintenance budget. A separate yearly expenditure spent on keeping the commercial kitchen and specifically commercial catering equipment operational.
Every service call for ignition replacement is logged, every compressor re-gas, every new bratt pan motor. Each total added up by the accountants and distributed to the F and B directors for appraisal.
And here is the key bit.
When the cost of maintaining the catering equipment outstrips the cost of replacing it, they buy new equipment. if the catering equipment X is costing £1, 000 a year to upkeep, over three years and the latest and greatest catering equipment X2pro is £3, 000 new with a three year guarantee, guess what. They replace it. The ROI timeframes of companies varies but the strategy does not.
Now any return they can get from the old equipment falls into a slightly different category. Profit. If the kit would have cost £3000 to maintain and the new kit is 3, 000 with a three year guarantee then the expenditure is deemed at nil cost, any funds that can be reclaimed on the existing kit, is profit, and net profit at that. if a large company is generating an operating profit of 10% then the £1, 000 they will try and get from eBay will actually equate to an increase of £10, 000 on their turnover figures, a nice boost for any food and beverage manager or chef looking to make moves in a hotel or restaurant group.
The result of this little enterprise is a mass of commercial catering equipment online that costs yearly as much to maintain as it does to buy. Now if that’s your bag, you're walking a financial tightrope at the outset with initial costing, then by all means, pick the equipment up, just be aware of what it is you're buying.
But if you do, if you save some cash on one piece of kit, and we install it for you, alongside your new commercial catering equipment, and it breaks, we won’t fix it for you, we won’t because we can’t guarantee the first problem isn’t the beginning of a raft of issues with the kit. We can’t vouch for it in any way. and we are not going to spend the next 6months calling our engineers off other commercial kitchen installations around the country because you thought you knew more about catering equipment than us. It may sound harsh, but we make money because we know what we're doing. Trust us. Most do.