These days the choices when purchasing equipment are very different from years past. When a operator needs a new piece of equipment they have more options now on how to buy than ever before. To simplify things, the restaurateur can either buy from a local Dealer or purchase online.
For the independent operator, this can be a real thought provoking experience. Buying heavy equipment online and having it shipped in to the site can usually save a little money. But how much does it really save?
Let’s look at the channel of distribution in the Food Service Equipment world. In most cases, you have a local Dealer with a showroom. That Dealer may also have outside Sales Representatives. These Reps usually confer with their customers and assist in providing information and ultimately a quotation for whatever the operator is looking for. When everyone is in agreement, the Rep places the order and later his people deliver the item to the restaurant owner.
On the other side of the spectrum, you have Online Web based companies. Generally, the restaurant owner needs to know what he needs and goes to the site of his choice and orders the product. In this type of transaction, there is usually no consulting and the product is paid for in advance. The equipment is then shipped either from the online seller or more often than not directly from the manufacturer. The restaurant owner is responsible for receiving the shipment and placing it inside his business.
Sound simple? Hold on for a minute. There are other factors that are at play in both of these examples.
The Local Dealer
When the equipment arrives at the Dealers loading dock it is examined for any possible freight damage. Then the delivery is scheduled with the customer. Typically this is at an slow business time of the restaurateurs’ choosing or before or after business hours.
Did I mention that the Dealer oftentimes delivers the new piece and disposes of the old one? They have the personnel to handle these tasks that the operator typically does not.
The Dealer is typically supported by a Manufacturer’s Representative who acts as a “go between” between the manufacturer and the dealer. Manufacturer Reps typically cover a set territory, usually one or two states. The Manufacturer Reps are tasked with getting the dealer to sell their products and supporting the dealer through the process. They may help with the initial consulting between the restaurateur and the dealer Sales Rep. They may offer a start and adjust visit when the equipment has been placed and connected. These start and adjust visits are important to make sure the equipment has been installed properly. They may also provide a demonstration for the operator and employees to assure that everyone knows how to use the equipment in the manner in which it was designed. If there are any problems, they act as a conduit to the manufacturer to remedy the situation.
The Online Website
The whole transaction between the operator and the website takes place either online or through a telephone call with a customer service representative. These customer service reps usually have very limited knowledge of the particular piece that is being ordered. The order is placed, paid for and the process starts. Usually all other contact is by email. The equipment is shipped to the Restaurant and arrives by a freight carrier who may or may not have a lift gate. Sometimes it arrives with no advance notice. In either instance the transaction ends with the crate on the sidewalk or parking lot in front of the business.
If there is any shipping damage, it is up to the purchaser to handle it. The process of filing freight claims is a daunting task to say the least. Most times if it is concealed damage, the end user has hardly no options to recover any costs. Moving the equipment into place is no easy task for someone not used to doing so. A typical two door refrigerator can weigh up to 500 lbs crated. If the equipment order originated from out of state, usually there is no backup from the Manufacturers Rep as they are only compensated for equipment purchased by a Dealer and shipped from the manufacturer to one of his territories. In a nut shell, the owner is basically on their own.
• Dealer Sales Rep consulting prior to ordering
• Face to face transaction between two businesses that know each other
• Shipment receiving by knowledgeable personnel
• Scheduled delivery by professionals
• Haul-a-way service for old equipment
• Manufacturer Rep’s support
• Final payment only when the transaction is complete
• Supporting local businesses that also support you
• No experienced consulting before the sale
• Deal with an unnamed customer service rep at an unknown location
• Shipped directly by freight carriers to your business often at inconvenient times
• No setting in place service
• No disposal of old equipment
• Minimal Manufacturer’s Rep support
• Item paid in full in advance
• Supporting a business that does not support yours
In a study by the state of Maine, the authors found that for every dollar spent at a locally-owned establishment, nearly 45% of that revenue stayed in the local community with another 9% being spent elsewhere in the state. These expenditures included employee wages/benefits, inventory, supplies, and services from other local businesses, profits accrued to the local owners, state and local taxes, and charitable contributions.
The money spent at national chains and big online stores enriches distant organizations and their stockholders. Local independents are more likely to keep their profits circulating in the local economy, a multiplier effect that directly benefits you and your neighbors.
Enticed by what seems like a great deal online?
Think before you click. What if all your customers only ate at national chains and not your restaurant?