In 1977, Aqua Technology was formed to market home water purification systems.

In 1983, due to a rapidly expanding market and the inability of a home-based business to adequately address the increasing number of customers encountered and products sold, Aqua Technology began building retail water stores. These retail stores have now become the springboard for over TWO THOUSAND other "water stores" nationwide as well as overseas.

(Much of the original information as to what constituted a water store, how they were designed, constructed and subsequently operated appeared in several technical articles in Water Conditioning & Purification beginning in 1985.)


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The basic idea of a full-service water store is to offer the public

  • an alternative to questionable tap water;
  • an alternative to the high cost of delivered bottled water, with it's erstwhile questionable quality; and
  • to offer a choice of point-of-use(POU)home water filtration and purification systems for home, office, medical, dental and industrial production of quality drinking water.
  • to provide selected point-of-entry(POE) water treatment systems for home, industry and agricultural needs.
>>You can own one >

Aqua Technology believes that the current market conditions are such that there are substantial opportunities for individuals both in the USA and overseas to build and operate their own full-service water stores, using technology and management techniques which have been proven throughout this and other, similar business ventures.

The objective of a properly designed full water store is to aggressively pursue several, inter-related profit centers which will provide a formidable, competitive business structure as yet not fully addressed in the water treatment industry.

These stores are being built by Aqua Technology for independent investors worldwide.

Because of the need for both market and technology-oriented store management personnel, unfortunately most water store operations today have failed to fully meet the expectations of both investors and the consumer public.

It is very easy to find so-called "water stores" selling items such as flowers, candy, confectioneries, newspapers, ice-cream, coffee and other items. This diversification was not in the original business plan for the water store---but became necessary just to make ends meet because of poor up-front planning as well as the lack of a commitment to pure water and the needs of the community which the water store served.

The financial effectiveness of water stores can be substantially increased through the infusion of market and technology-oriented management techniques. Aqua Technology Water Stores experience in these key areas can assist the new waters store owner(s) will in beginning to realize their full financial expectations.

Background

For many years, people who have entered the water store marketplace have placed their entire faith on two simple algorithms for financial success:

Algorithm (1): produce drinking water which is better tasting than tap water---and people will come and buy it;

Algorithm (2): provide a modest selection of water accessories(jugs, water crocks, water coolers) etc and people will come and buy them.

On the strength of these two algorithms, over two thousand water stores have been built nationwide. The success of these stores, on an individual basis, was based not only on how effectively they could employ the two algorithms---but how they could employ them in a highly competitive environment.

Unfortunately, those who relied simply on these two algorithms, and little else, found that they were not competitive and the enterprise failed to meet financial expectations. We noted this situation in the above section.

This happened for several reasons.

First, most individuals who entered the water store business had no prior technical training in water or related subjects. They were an independent investor as well as an owner/operator.

Inasmuch as the subject of drinking water is known to be a complex and multi-dimensional subject, extremely competitive, and requiring more than a passing knowledge of biology, physics, chemistry and other fields, due to lack of hands-on experience and information, the first algorithm quickly fell apart for many of these proprietors.

Because of the competitiveness of the water market, bottling, vending or even other water stores, quickly took those who had entered the business with no formal training in water for a quick ride down the path to price-cutting.

Price cutting has and continues to be the primary defense mechanism for water store owners who have found that Algorithm number 1 is failing them.

With the reduction of the price of bulk water to 25, 20 or even 15 or 10 cents per gallon, to meet "competitive" businesses, be these competitors other water stores or simply out door vending machines which provided virtually identical water purity, the profitability of this segment of the water store suffered substantially.

With respect to Algorithm 2, it too began failing due to the proliferation of nearby retail and "discount" outlets which began carrying identical products---water jugs, crocks, bottles, coolers, etc. These discount houses, drug stores, hardware stores and others operate at a much lower profit margin than the specialty-type water store.

Unfortunately, the water store described above had provided for no other water-related profit centers in it's business plan, and having lost significant financial ground because of the failure of Algorithms 1 and 2, it ultimately failed in it's goal to provide a significant return on investment for it's owner(s).

The water store landscape is littered with stores which started on these premises and, in a move characteristic of desperation, began "diversifying" into totally unrelated merchandising activities to try to recoup lost income.

It takes only a short trip around the country to find hundreds of these "near-failure" stores selling all types of products ranging from candy to flowers to roses, yogurt, mail services, fax and notary services and the list goes on and on. In some cases, the proliferation of these additional products completely obscures the original intent of the retail establishment---and it is hard to find the place where one fills their water jug in these stores.

In a manner of speaking, the "specialty-type" water store then became a common competitor with non-specialty operations which maintained a more diverse retail base and which could work with significantly lower profit margins than the specialty water stores.

The obvious result of this situation was, and continues to be, the rapid and frequent turn-over of the business or simply a resignation on the part of the owner to a substantially lower return on investment than he or she initially was led to believe.

In short, the overall financial impact of the full-service water store on the water industry, considering the potential which such an enterprise initially offered the industry, has been far less than expected.

DOING IT RIGHT

The idea which Aqua Technology uses in assisting new owners with their own water store is fully cognizant of these shortcomings, having demonstrated in it's own business activities that a far better financial result is possible with a more thorough and better managed business operation

Some attempts have been made by other companies to remedy this problem. Their plans focus primarily on the aspect of franchises to achieve, by whatever means possible, a sense of public acceptance of the water store concept as "big business". Unfortunately, the supposed benefits of franchised water store operations when it comes to technical and management acuity are virtually non-existent.

Chain operations such as the now defunct Watermark Corporation clearly demonstrated how the urge to achieve a "big business" image without the proper technical and marketing underpinnings would fail, regardless of the extent of the initial financial investment.

These franchised operations also labor under the burden of a tightly controlled mechanism of wholesale product merchandising. In this situation, as in most franchises, a single, management entity controls and funnels a select group of products, usually at higher than necessary prices, to the hapless franchisees which are tied not only to the limited set of products, but to the purchasing mechanism and pricing structure of a single warehouse.

The franchise concept is clearly not the answer to profitable water store operations. A specialty-type operation must, by nature, retain an autonomous mechanism to incorporate a changing product line in order to maintain a competitive position in a changing market environment.

Each water store location is unique and therefore, catering to a different marketplace, must be designed and operated accordingly. The lack of flexibility to adapt to these variable market areas, and demographics, is a sure formula for failure.

Additionally, in order to remain successful at the bottom line, the specialty-type water store must retain the ability to adapt to changing market conditions and technology without being bound by "exclusive distribution" limitations imposed by a franchiser or product wholesaler.

We believe that a properly designed and operated water store is designed to eliminate the "ball and chain" aspect of franchises and simultaneously provide the necessary autonomy for the water store. This will allow the individuality of each water store to become manifest, based on local market conditions, the abilities of the management team and the market opportunities which present itself to that particular water store.

In the future, we believe that successful water stores must draw from those proven techniques and principles which have proven to be successful, while eliminating ineffective or regressive sales, marketing, technical approaches and product lines from the plan.

A successful water store design also draws on the results of analyses conducted by water industry experts who have identified specific business trends for the industry. Unfortunately, in the rush to see Algorithms 1 and 2 be successful, many present day water store owners have overlooked important business trends and information---thus resulting in a "short view" of the water business.

We believe that a properly operated water store must present the "long view", one which incorporates studies and analyses which industry experts have carefully prepared. Additionally, the profitable water store must adapt to a much "wider" view of the water store market---primarily the inclusion of profit centers which have heretofore been discarded by the current water store industry as "too difficult", or "insignificant" with respect to their mioptic view of the drinking water industry.

The "state of the art"condition of the industry today therefore is such that existing water stores are tapping only a small portion of the water market---tapping in many cases the wrong aspects of the market---and ignoring good management principles and technology which could significantly improve their bottom line. They also have no view to the future, insofar as technology and growth markets are concerned.

As we noted above---and it bears repeating once again---an attempt at compensation is made by many of these stores who realize that their basic business plan is not working. This attempt results in what amounts to a "7-11"-type store, selling candy, ice-cream, potato chips and various sundries, balloons, flowers, teddy bears, newspapers, pictures, coffee, tea, knick knacks and other non-water-related products. The words "pure water" may be on the marquee, but the store contents defy that definition.

The franchised operations are faring not much better---albeit with a bit more glitz and glamor and name value to attract a few more customers. Even with the higher start-up price tag, they still miss(or intentionally avoid) the real money-making profit centers of the water industry.

Water stores built by Aqua Technology circumvent these problems.

THE BASIC WATER STORE CONCEPT

Aqua Technology Water Stores are truly "full-service" water stores, providing not only drinking water, and the related water accessories, but also a wide range of point of use(POU) and point of entry(POE) water purification and treatment products as well as leasing and rental programs, and service and maintenance programs for in-house and third party equipments.

Bulk Drinking Water Sales

A minimum of two types of drinking water are offered in each store: "purified"(reverse osmosis); and

  • higher quality "steam distilled" drinking water.

The sales of these waters are on a self-service basis. Much as the self-service gas stations captured the market of higher priced "full-service" stations, our experience is that cost conscious customers are eager to save big dollars by filling their own bottles, instead of paying for expensive home delivery.

Each marketing area exhibits different customer buying habits: in some areas, the lower-cost "purified" water may dominate bulk water sales; in other areas, the mix of "purified" and "steam distilled" drinking water may vary considerably from this norm.

The Aqua Technology Water Store is designed to accommodate this variance in market characteristic as well as the growth for each type of water product and at the same time minimize both initial and ongoing capitalization requirements for the water store(s).

"Purified" and "Steam Distilled" drinking water have proven to be the "waters of choice"throughout the national water store marketplace. Providing both of these types of drinking water at a substantial cost savings compared to either delivery service or supermarket prices has proven to be a financial windfall for a properly operated water store. Stores which miss this option are right on track to miss significant profits simply waiting to be collected.

Compared to competitive sources, the water store bulk water is fresher and usually cleaner than grocery-store water. The idea of paying $6-$8 for a five gallon jug of drinking water delivered in a jug which could have been used for a house plant, a coin collector, a repository for motor oils or chemicals is becoming less and less appealing to a cost and purity-conscious customer.

The option to fill THEIR OWN water container, with fresh, pure drinking water, which they can see being made right in front of them in a clean, well-operated state-licensed water store, has been shown to be as significant a motivational force as price in convincing customers to purchase at a water store.

The average homeowner can save upwards of $400-500 yearly by patronizing their local water store instead of utilizing a home delivery service.

Business offices, particularly those owned by small business concerns, are also cost conscious and serve as a significant portion of those who regularly frequent the water store.

Finally, both the purified and steam distilled water should be available from a coin-operated, 24 hour window vending machine, controlled and monitored from the store interior.

 

 

 

Water Accessories

 

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Supportive to the sales of drinking water are the needs for water jugs, crocks, water coolers and other water handling and dispensing apparatus for home, office, travel, and sports activities. As the water store operation progresses, and sales are tracked by the owner, this segment of the water store profits will take a back seat to POU and POE product sales as noted below.

However, these sales represent an on-going activity inasmuch as individual customer needs for such products will grow with increased use of bulk water and general attrition of such products under continued use.

>Point of Use(POU) Equipments

Nationwide sales of POU equipments is forecasted to be in excess of 6 million units by 1998. Included are systems such as steam distillation, reverse osmosis and carbon filtration systems.

Additional items such as travel and emergency water purification/filtration units are expected to add a significant number to this estimate.

Industry analysts have produced extensive forecasts of the various types of systems expected to be sold in the coming years. Also included are factors such as anticipated market share and demographic information related to geographic area, buyer profile(age and income) as well as means of distribution.

Industry studies indicate that the distribution of these POU products by water stores such as those being built by Aqua Technology are expected to claim upwards of 15% of this total market. The market areas which are forecasted to lead in sales include California and the Sunbelt states.

Point of Entry(POE) Equipments

Significant utility water treatment problems are present in both urban and rural areas. Point of Entry(POE) systems to be sold through the retail facilities of new water store will solve many of these utility water problems.

Included will be taste and odor filtration systems, water conditioning equipments for hard water treatment, high-technology filtration systems for removal of carcinogenic chemicals known to be present in the majority of homes in America; and general water treatment equipments such as iron, sulfur and manganese removal systems for rural environments.

 

 

Installation, Service and Maintenance Programs

This product/service area is one which existing water stores and equipment retailers are overlooking. This area represents a significant portion of the drinking water market inasmuch as most in-place equipments require not only installation but periodic cleaning and refurbishing to maintain water quality at acceptable levels.

The numbers of POU systems currently installed in residential and office environments which are NOT receiving regular service and maintenance is known to be extremely high. This is due to the attrition of dealerships and service organizations which originally sold and/or serviced such equipments.

A further element of this Service and Maintenance Program is the capability for the Water Stores to install such POU and POE equipments as are sold at retail in the Water Stores. A service vehicle and service technician, trained and equipped to address these important functions can be responsible for supporting equipment installation and service needs for the store(s).

Finally, in-store repair and service is critically important to the overall profit structure of the store.

Rental and Leasing Programs for POU/POE systems

The availability of high-technology manufacturing techniques has provided POU equipments at wholesale costs which are significantly lower than equipments available in past years. This lower equipment cost provides

  • an attractive, lower price product which consumers can rent or lease with relatively low monthly payments; and
  • a low-risk, low-investment position for the Water Store.

>AN INTEGRATED OPERATION

The ability to integrate the above Products and Services is a capability unique to a properly operated Water Stores. Ready access to Original Equipment Manufacturers(OEM's), thus ensuring the lowest possible wholesale prices; our many years of operating and maintaining in-store equipments, thus ensuring minimum operational down-times; our broad experience with the complete range of POU and POE products, their installation, service and maintenance, thus ensuring a positive customer relationship in the retail trades; our technical and engineering backgrounds, thus ensuring a technical and marketing edge in a competitive marketplace; all these factors combine to make Aqua Technology Water Stores a formidable factor in the growing drinking water market.

Our strategy for meeting/dominating the competition is:

  • to access and control the best products in the water marketplace
  • provide these products, together with an integrated maintenance program, at highly competitive prices
  • offer technology and services which other, competitive business do not have
  • provide extensive customer education programs, through printed and visual, in-store media

Responses from our bulk water customers indicate that our distilled bulk water service is enjoying an excellent reputation. In particular, individuals who have used our bulk, distilled water services and try other, less-expensive alternative such as reverse osmosis, nearly always return to the higher-quality, higher-priced product.

In order to retain those who may "switch based on price" from distilled to reverse osmosis water, the Aqua Technology offers that alternative, at a lower price.

Responses from customers who have purchased water filtration and purification equipments from the Aqua Technology Water stores clearly indicates that not only they extremely happy with the product, but are willing to promote the product to relatives and friends.

Finally, those customers who have used our in-home or in-store equipment service capabilities are uniformly pleased with and supportive of these services.

The comments:

"...we're glad you offer that service", or

"...we are happy that someone is available to service these equipments(purchased elsewhere)"

are commonplace and underscore the importance and profitability of such activities, many times overlooked by competitive operations.

If you have a serious interest in pursuing this growing marketplace and are interested in throwing off the ball and chain of perhaps an unappreciative employer, a water store may be just the recipe for you and your family. I don't know of very many people who became financially secure by working for others.

Call us at 1-800-478-7342 and we will explain our Consultation Program to you. There is no obligation.

SEE OUR NEW WATERSTORE BOOK - BUY IT!!

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