Article contributed by John Mahlmeister, COO, Easy Ice
What does it really cost to buy and own a commercial ice machine? The long-term answer might surprise you.
If you’re a seasoned business operator, you’ve probably owned ice machines for years without looking too closely at what you’ve spent on them over time.
You may know what you paid for your current ice equipment and what purchase price to expect for your next ice machine, but that initial retail price is only the start of your spending.
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Calculating the True Cost of Commercial Ice Machine Ownership
The total cost of ice machine ownership is the sum of two parts—the purchase price and the upkeep. Think of commercial ice equipment like your vehicle.
Once you buy it, you still need to budget for ongoing maintenance and repair expenses that will inevitably come up.
Let’s take a closer look at the total cost of ice equipment ownership.
1. The Initial Purchase/Capital Costs
The most you’ll spend on your ice machine at one time will be the purchase price, which ranges from $5000-$10,000 for popular models.
If you buy a machine that needs a bin, that bin will most likely be sold separately. Most small and first-time business owners finance their equipment.
In that case, you’ll be making monthly payments with interest for 2–3 years or longer.
Once you buy the ice machine, you’ll have to figure out who’s installing it and how much it will cost.
Even if installation is free through your equipment dealer or online retailer, you could eventually incur unintended costs from a bad installation or from choosing the wrong ice machine.
Badly installed ice machines need to be reinstalled, and the wrong ice machine model needs to be replaced with the right one.
Most business owners believe that the purchase price represents 80% of ice machine ownership costs.
In fact, it’s just the opposite. The purchase price is only about 20% of the total cost of ice machine ownership!
2. Post-Sale/Operational Costs
Post-purchase ice machine bills are inevitable. Manufacturers recommend a minimum of 2 professional cleanings a year, and every ice machine needs repairing eventually.
The average cost of a commercial ice machine repair in 2021 was $708.41—and some repairs can cost as much as $2000!
Think your ice machine’s warranty will tide you over in the beginning? 80% of ice machine service calls made during the warranty period are not covered under warranty!
On top of maintenance and repairs, there are other post-purchase costs. If your ice machine breaks down completely, you’ll have to buy backup ice while waiting for your service company to fix the issue.
And let’s not forget the utility bills. Ice machines use a lot of water and will also contribute to your electricity consumption.
The average 600lb air-cooled ice machine uses an average of 44,000 gallons of water per year!
When you need to replace an old or broken ice machine, you’ll spend that same amount again.
The average commercial ice machine only lasts 7–8 years, but with the best maintenance performed at the right frequency, ice machines can last 20 years!
If you buy your own, expect a lifespan closer to those 7 or 8 years—especially if you neglect the maintenance. If you stay in business for 20 years, you can expect to buy an ice machine 2 or 3 times.
If your business grows significantly and requires more ice per day, you’ll have to buy a new unit sooner than you anticipated at some point in the future.
Owning ice equipment will also cost you something even more valuable than money: your time.
Instead of spending time looking for a trustworthy service company, tracking maintenance appointments, buying backup ice, and scheduling repairs when the ice machine breaks down, you could be spending time on profit-generating areas of your business.
The classic business recommendation from finance experts states to earn back 10–30% for every capital dollar you invest.
Ice isn’t something your customers pay for, and it’s not a reason they choose your business over the competition.
When you invest capital in a non-value-added asset like your ice machine, your value-added assets need to yield a higher-than-average return to compensate.
You can accept that you aren’t getting your money back on your ice machine investment—but the savviest business owners find every possible way to reduce their spending while maximizing their profits.
Ice machine ownership just doesn’t fit into that strategy.
Why Isn’t This Common Knowledge?
You might be wondering why nobody’s talking about the real cost behind ice machines. The truth is few people in the commercial ice machine industry understand the total cost and even fewer of them are paying attention to the numbers.
Once you buy an ice machine, the only way the manufacturer, your foodservice equipment dealer, and your ice machine service company make money is the machine breaking down and ultimately dying.
Ice machine manufacturers and foodservice equipment dealers only profit from selling you equipment, so the sooner you must replace your ice machine, the sooner they profit again.
For your service company, there’s some money to be made through performing routine maintenance, but pricey repairs are far more lucrative for them.
The only one who has your business’ best interests at heart is you. Instead of making the most common decision when it comes to your ice equipment, ask yourself what the wisest decision is.
Does buying and owning ice equipment make sense for your business financially? Is it your best option?
The Alternative: Renting
If your answer is no, the next question is how else can you provide ice to your customers?
The answer is simple—rent your ice machine instead of buying it. Let’s look at the advantages of renting your ice equipment:
- Little capital required upfront
- No interest payments
- All ice machine bills become tax-deductible Operational Expenses
- No need to care about machine depreciation
- Easier, cheaper ice machine replacement
- Minimal or no out-of-pocket maintenance and repair costs
- No need to look for an ice machine service company
Overall, renting your ice equipment is more affordable and more convenient than ownership. Most, if not all, ice machine stresses are the rental company’s responsibility, not yours.
If you’re going to consider a rental, here are some important questions to ask:
What does it cover besides the equipment?
- Maintenance?
- Repairs?
- Backup ice?
Often, not all of these are included for free.
How long is the estimated delivery time?
- Several weeks or months is now common with smaller rental companies, due to supply chain delays. How long can your business wait for ice?
What ice machine brands, models, and ice types are available?
- Local and regional rental companies are likely to have a more limited selection
What is the company’s customer service like?
- Do they only take calls Monday – Friday during bank hours? Do they work holidays?
Ask your accountant or business advisor how ice machine rental can benefit you. If you’ve been running your business for a while, consider asking your accountant how much money you’ve spent on ice machine-related expenses since opening.
The answer may surprise you!
John Mahlmeister is the chief operating officer and co-founder of Easy Ice.
Co-headquartered in Phoenix, AZ and Marquette, MI, Easy Ice is the national leader in the full-service ice machine subscription industry with warehouse and distribution facilities in Chicago, Dallas, Kansas City, Orlando, and Denver.
Since its founding in 2009, Easy Ice has rapidly grown the number of ice machines under management to over 30,000 units across 47 states.
The Easy Ice commercial ice machine subscription programs include installation, cleaning, preventive maintenance, repairs, and backup ice. For more information, please visit EasyIce website. Find them on social media at Facebook, Twitter, and LinkedIn.
