Free coffee vending machines: What does free mean?
At its most basic level there are two options when looking to acquire a coffee machine – You either buy it or rent it. However, over the past few years many companies have come up with a number of innovative ways to make coffee machines more affordable. Entry level coffee vending machines sell for around R20,000 and their corresponding rental prices are usually around the R1000 p/m mark. However for some companies, these rental or the purchase prices can seem exorbitant and because of this the free coffee vending machine package was born.
What is a free coffee machine rental:
There are always two costs associated with acquiring a coffee machine (whether it is a rental or a purchase):
- The rental cost or purchase cost of the actual coffee machine
- The ongoing coffee cost (or ingredients cost) required to be used in the coffee machine
A free vending machine rental is one in which the ongoing cost in (2) is used by the coffee company renting the coffee machine to you to pay for the coffee machine over a period of time. Have a look at this example below:
Let’s assume the cost of a coffee machine is R20,000 and the amount you would spend each month on coffee is around R1500p/m. Now let’s assume that your monthly spend of R1500 would result in a profit for the company supplying you the coffee of R1000 each month. A company offering a free rental would give you the machine for free and use that R1000 monthly profit to pay for the machine over a period of 20 months.
What are the benefits of getting a free coffee machine:
You need to buy coffee monthly whether you are buying or you are renting. It is therefore usually advantageous to take a company up on a free rental plan rather than paying for rental if
- The company giving you the free coffee machine is not charging you a premium on your coffee
- You like the coffee that the company is supplying you
- The company offering you the free rental gives you an option to test the machine out for a period of time so you can make sure you like the coffee and the coffee machine
What are the disadvantages of getting a free coffee machine:
The best things in life might be free but not if the following is the case:
- You are being overcharged for you coffee supplies – Overcharging for coffee on these types of deals is very common in the South African coffee industry. You shouldn’t be paying more than R300/kg for your coffee beans regardless of the brand that is being supplied.
- You are getting poor quality coffee – Sometimes, in an attempt to offer a low cost option, companies offer sub-standard coffee beans containing a high percentage of Robusta. Try your best to find out the contents of the coffee you are being supplied.
- You are getting an El’Cheapo coffee machine –Not all coffee machines are created equal. Try ensuring that you are given a trial run on the coffee machine before you take up the company on its offer.
- Usage requirements – Sometimes companies will offer a coffee machine at no cost and the consumables will be priced reasonably but the amount required to be bought each month far exceeds what you are capable of drinking. Whenever you are offered, minimum requirement low rental or free rental coffee deals, make sure you are able to go through the required amount of coffee.
- Rental Term – As a general rule of thumb when renting coffee machines, try ensuring your rental period is as short as possible. The one unknown always, is a company’s service level and you don’t want to be locked into a long-term rental agreement if the company is not delivering on its promises
Conclusion
Free rental deals at their core are great options but make sure you tread carefully when opting for one. As with most things in life, if a deal sounds too good to be true, it probably is. To view the differences between renting, buying and leasing view our article explaining it all here
Renting vs. buying vs. leasing
