Are Free Dispensers A Good Deal?

A reader comments: “We have an offer from a vendor to provide free soap dispensers for a well-known product line. Since we have to buy the product from somewhere, why not take advantage of this offer?”

This looks like a great deal, subject to following points to consider:

1. My experience is that "free" is seldom free. There is usually a markup (which is reasonable to expect) when proprietary dispensers are provided at no or low cost.
     A. Sometimes the product simply gets a lot more expensive after the deal is struck. It is wise to negotiate a five-year pricing agreement with negotiated escalations built in.

2. Sometimes there can be a "revolving contract" that obligates your company to continue to purchase from the vendor. This is usually unenforceable on the customer and can cause a lot of angst when the vendor attempts to intimidate the building service contractor over this issue.

3. Lesson learned: A contractor should not encumber the customer with any such agreements. No revolving contracts are implied or agreed to and the customer owns the units once they are installed and can remove them at any time at their sole discretion regardless of any agreements between vendor and BSC.

4. An Return on Investment study (over a five-year period) should be conducted comparing the "free units" versus purchasing generic units where the product (soap, paper towels, toilet tissue) can be shopped each year. This helps avoid the vendor increasing the price of their proprietary units which can become prohibitively expensive.

5. Anytime we can standardize dispensers and find savings we should try to find a win/win outcome to any offer.

6. Final word: "Caveat Emptor" or "Buyer Beware." Everyone can be well intentioned and much can still go wrong.
     A. Be deliberate and be very clear up front on wording of any agreements to avoid unnecessary costs and misunderstandings in the future.
     B. Verbal agreements seldom work due to faulty/selective memories.
     C. Get it in writing so there are no surprises.

Your comments and questions are important. I hope to hear from you soon. Until then, keep it clean...

Mickey Crowe has been involved in the industry for over 35 years. He is a trainer, speaker and consultant. You can reach Mickey at 678-314-2171 or CTCG50@comcast.net