Table of Contents
33
17 min
10.11.2026
Water delivery: a cooler in someone else's office
Sergiy Shuldik
Financial Expert at Finmap
“For six years I thought I was in the water business. It turns out I am in the cooler business, and I could not see it, because I give the cooler away free. Free for the client, not for me.”
Yaroslav Marchuk runs a water delivery round in Mukachevo. Nineteen-litre bottles into offices, a cooler with every one of them, three vans on the routes. Nine years in the trade, six of them as the owner. Four hundred and eighty clients, revenue growing, no debts. And a profit that is not actually there.
Four hundred and eighty coolers in other people's offices
A cooler costs 6 200 ₴ and stands in the client's office for nothing. That is how the whole trade works: you hand over the equipment so that you can sell the water.
There are 480 coolers out with clients at the moment. Another 60 sit in the store and in repair, so the park comes to 540 machines.
The cooler is given away free because water is what is sold
The logic is simple and it is sound. No client wants to buy a cooler for six thousand and then take water from the man who sold it to him. He wants water delivered, and the cooler is a condition, not a purchase.
- purchase price of a cooler: 6 200 ₴
- value of the whole park: 3 348 000 ₴
- servicing one cooler: 740 ₴ a year
- what the client pays for the cooler: nothing
The park costs more than a year of revenue. That is the first thing worth holding on to while reading on.
Mukachevo is a convenient town for this business and a cramped one at the same time. There are not many offices, everybody knows everybody, so reputation counts for more than advertising. But there is nowhere to grow either: when you serve four hundred and eighty offices in a town of a hundred thousand people, the next client has to be taken off a competitor.
What one client brings
The average office takes four bottles a month, which is 48 a year. A bottle costs 125 ₴.
| One client over a year | ₴ |
|---|---|
| Revenue (48 bottles × 125 ₴) | 6 000 |
| Water: water, bottle turnaround, filling | 1 824 |
| Delivery: 12 visits × 95 ₴ | 1 140 |
| Servicing the cooler | 740 |
| Contribution | 2 296 |
Two thousand two hundred and ninety-six hryvnias a year from one office. For a business with three vans and nine people that is a normal figure, and it is the one Yaroslav kept in his head.
And here is the thing he did not know for six years. That figure means nothing on its own. It only takes on meaning in a pair with another one — with the time the cooler needs to earn back its own cost.
How long a client lasts
Offices are not forever. One moves and starts taking water from somebody else, one closes, one switches to a filter on the tap, one simply finds it cheaper.
The average client lifetime in Yaroslav's business is 2.5 years.
Four bottles a month is an office of eight to ten people. Those make up the bulk of the base: large customers in the town can be counted on one hand, and they are served on separate terms. Nineteen litres a bottle is the industry standard, and Yaroslav does not carry the smaller format, because the delivery costs the same either way.
A client's lifetime is not his loyalty, it is the life of the office
The figure is not about clients being bad. It is about how long a rented office in a small town lives: a two-year lease, a one-year extension, then a move or a closure. Water delivery is neither the cause of that nor able to change it.
So the cooler stands with a client for two and a half years on average, and then it comes back.
It is worth saying that this is an average, and it hides a spread. Some offices sit in place for five years and paid off their cooler long ago. Some are gone after eight months, and then the cooler has not covered even a third of itself. The 2.5 years is something you can plan by, not something that will happen to any particular client.
The cooler pays back more slowly
Now put the two figures side by side.
A cooler costs 6 200 ₴. A client brings 2 296 ₴ of contribution a year. So the cooler pays back in 2.7 years.
The gap looks trivial, and that is exactly why it lived for six years. Two tenths of a year is a little over two months. Nobody notices two months inside a cycle that runs two and a half years.
The cooler pays back in 2.7 years, and the client lasts 2.5. Two tenths of a year are missing.
Over the whole term a client gives 5 740 ₴ of contribution against the 6 200 ₴ the cooler cost. The shortfall is 460 ₴ on every one of them.
“Four hundred and sixty hryvnias. When I first saw it, my first thought was that this is small change. Then I multiplied it by four hundred and eighty and sat down.”
“My bookkeeper used to tell me: Yaroslav, you are doing fine, four percent. For a delivery round that is normal. And she was right about the figures she had.”
The year in figures
| Line | Amount, ₴ | Comment |
|---|---|---|
| Revenue | 2 880 000 | 480 clients × 6 000 ₴ |
| Water | 875 520 | |
| Delivery | 547 200 | |
| Servicing the coolers | 355 200 | |
| Winning new clients | 222 000 | 120 × 1 850 ₴ |
| Fixed costs | 760 000 | filling room, 9 people, rent |
Six lines, and all six of them Yaroslav saw every month. The costs add up to 2 759 920 ₴ against revenue of 2 880 000 ₴, which leaves a profit of 120 080 ₴.
Four percent and a bit. Not much, but a plus.
Four point two percent is a margin you can live on and cannot grow on. That is exactly why Yaroslav started counting more carefully: he wanted to work out where the money for a fourth van was going to come from.
Where the profit went
Two lines are missing from that table.
Over a year 120 of the 480 clients leave — the same 25% churn that gives a lifetime of two and a half years. Their coolers have to be collected.
A hundred and twenty clients a year is ten offices a month, which is roughly one cooler every third working day. For a driver that is routine and does not look like an event: picked it up, brought it in, put it in the store. Which is precisely why nobody ever counted what the cycle costs.
A returned cooler is not the same as a new one
Not everything comes back. Three quarters of the coolers do return, that is 90 of them, and each one needs repair and sanitising before it can go out again — 480 ₴ a machine, or 43 200 ₴ altogether.
The other thirty never come back at all. The office has closed, the new tenants say they saw nothing, the former director does not answer. Thirty coolers at 6 200 ₴ each make 186 000 ₴ a year.
Two hundred and twenty-nine thousand two hundred hryvnias is almost twice the profit Yaroslav could see. So the business was not simply earning less than it looked: it was not earning at all.
What the report shows
The two missing lines come to 229 200 ₴ together.
| The year | In the report, ₴ | In reality, ₴ |
|---|---|---|
| Revenue | 2 880 000 | 2 880 000 |
| Costs | 2 759 920 | 2 989 120 |
| Coolers lost | — | 186 000 |
| Repair of the returns | — | 43 200 |
| Net profit | 120 080 | −109 120 |
The report shows 120 080 ₴ of profit. In reality it is minus 109 120 ₴.
It is worth being precise here: the report does not lie. All six lines in it are correct, reconciled against statements and delivery notes. It is simply drawn up by the rules of tax accounting, where a cooler is a fixed asset and not a cost of winning a client.
The coolers that never came back
A lost cooler is not a cost in any report
The cooler was bought two years ago, and at the time that was a purchase of equipment. When it vanished, nothing changed in the till: no money went out, no invoice arrived. The asset simply stopped existing, and no monthly report records that.
The repairs behave the same way. They arrive in small amounts of 480 ₴ and sit under “equipment repairs”, which already holds the vans and the pumps. The coolers can be pulled out of there, but nobody ever has.
There is one more reason, a purely practical one. A missing cooler is discovered not when it goes missing but when the driver arrives to collect it and cannot find it. Anything from a week to three months passes between those two events, and a loss like that does not attach itself to any particular month.
Capital in the store
There is a third figure that is not a cost and still weighs something.
Sixty coolers in the store are 372 000 ₴ that bring in nothing. They are needed: without a reserve you cannot put a cooler into a new client's office the same day, and in this business speed is the whole advantage.
The store is not a reserve, it is frozen money
Three hundred and seventy-two thousand is more than the entire annual profit Yaroslav used to draw for himself. And against the real figure there is nothing left to compare it with.
“The store always looked like a detail to me. Sixty coolers standing in the corner. And it is the same thing as two vans that never go out on a route.”
Sixty in the store is 12.5% of the ones standing with clients, and Yaroslav keeps exactly that many out of experience rather than caution: fewer means turning a new client away or giving him a cooler in a week's time. In a town where everybody knows everybody, a week of waiting costs more than idle equipment.
Why none of it is visible
- a cooler is bought as equipment, not as a cost of winning a client
- a cooler that disappears produces no document at all
- its repair sits together with the repair of the vans and the pumps
- the store is not a cost in the first place, it just is
To see the minus you have to do the one thing no bookkeeping package does: tie a cooler to a client and count its fate alongside the revenue from the water.
Not one of those operations is difficult. It is just that nobody ever asks himself how many clients the cooler failed to pay back on.
Yaroslav checked whether this was a quirk of his own accounts. He talked to two men he knows in other towns — the same story there: the cooler sits on the balance sheet as equipment, and the fact that it has gone from a client's office turns into a cost line nowhere. One of them said he does not count the park at all.
The hidden cost of the park is 229 200 ₴ against 120 080 ₴ of profit in the report, which is 1.91 times as much. It is that ratio which turns the plus into a minus, and it is the thing you cannot see while the coolers are not tied to clients.
What was tried before
“The first year I chased those coolers myself. Drove around, phoned, argued with landlords. Then I worked out how much time it was eating and stopped. Thirty a year is just the price of doing business, I told myself.”
The logic was clear enough: chasing one cooler costs more than the cooler. It is right for a single case and wrong for thirty a year.
So two moves were left, and Yaroslav worked out both.
There was also the idea of a contract with a penalty for non-return. The lawyer did the sums: to recover 6 200 ₴ from a company that has closed down you need a court, a bailiff and about a year. In that year thirty more such cases pile up.
A deposit on the cooler
The first one: take a deposit of 2 000 ₴ that comes back together with the cooler.
It works. When the client's own money is hanging on the cooler, the cooler comes back: nine in ten instead of three in four, by Yaroslav's estimate.
- 108 coolers come back instead of 90
- 12 are lost instead of 30
- saving on the losses: 111 600 ₴
- extra repair on the additional eighteen: 8 640 ₴
Why the deposit is not enough
A deposit cuts the losses and cuts the base
Two thousand up front is a threshold. Part of the offices will simply go to the competitor who hands the cooler over with no deposit, and Yaroslav puts that part at a fifth.
New clients would arrive at 96 a year instead of 120. Twenty-four offices at 2 296 ₴ of contribution each are 55 104 ₴ that will not be there.
The net effect of the deposit is plus 47 856 ₴.
The business stays in the red all the same: minus 61 264 ₴ instead of minus 109 120 ₴.
There is a second side to it as well. Repairs get dearer with a deposit, because more coolers come back: 51 840 ₴ instead of 43 200 ₴. That is not an argument against it, but it does show that even a good move is never free.
The price of a bottle
The second move is simpler and nastier.
Put 12 ₴ on a bottle, from 125 to 137. That is 9.6%, and it brings 276 480 ₴ a year.
The price of a bottle beats any amount of discipline
Set the two moves side by side. The deposit gives 47 856 ₴, the price gives 276 480 ₴, which is 5.78 times more. And the price demands no conversations with clients about money up front, no register of deposits and no arguments when the cooler comes back.
To come out at exactly zero, 4.74 ₴ is enough. Everything above that is already profit.
“The funniest part is that nobody noticed the twelve hryvnias on a bottle. I was braced to lose half my clients, and three of them left. People pay for the water standing in the office, not for the water being three hryvnias cheaper.”
Net profit after the price rise comes to 167 360 ₴ instead of minus 109 120 ₴. So twelve hryvnias on a bottle turn the whole year over — and it is the same sum the client cannot tell apart from the old price.
What Yaroslav changed
He put the price up and did not bring in deposits. But the main change was not in the price list.
- every cooler has a number and is tied to a client in the accounts
- a cooler that disappears is written off as a cost of the month it went missing
- cooler repairs are kept apart from repairs to the vans
- a new client is worked out on the contribution over his lifetime, not over a year
The fourth point is the one that mattered. Until then Yaroslav looked at a client as 2 296 ₴ a year and took anybody at all. Now he looks at 5 740 ₴ over the whole term against the 6 200 ₴ the cooler costs — and a small office on one or two bottles a month simply does not get through.
Three clients out of four hundred and eighty are 0.6% of the base against 9.6% on the price. Yaroslav did not expect that ratio and still calls it the biggest surprise of the whole story.
The money does not vanish — you simply do not see it
“For nine years I sold water and counted water. And my main asset was standing in other people's offices, and I did not even know how much of it was there. When I counted it, the park turned out to be worth more than everything I earn in a year.”
Nothing in Yaroslav's business changed: not the number of clients, not the routes, not the cost of a bottle. Still 540 coolers, the same 25% churn, the same 95 ₴ a visit for the delivery. The only thing that changed is that a cooler in somebody else's office now has a number in the accounts, an owner, and a term by which it has to pay for itself.
How to see this in your own route
All the arithmetic above rests on one line the cash report does not carry: what the park standing in other people's offices costs, and how fast it disappears from them. While a lost cooler is not an expense and a returned one is not income, the business sees 120 080 ₴ of profit instead of minus 109 120 ₴ and does not know that a cooler pays back more slowly than a client lasts. When placements, returns and refurbishment are counted alongside the water revenue, the 460 ₴ shortfall on every client becomes a figure — which is exactly why owners of small and medium businesses use Finmap: to see the financial picture instead of reconstructing it from memory.
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Topic foundation: Management Accounting Explained: What It Is and Why Owners Need It
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Frequently asked questions about water delivery finances
How do you work out whether a cooler at a client pays back?
Divide the price of the cooler by the client's contribution for a year and compare the result with how long that client lasts. Here the cooler costs 6 200 ₴ and the client brings 2 296 ₴ of contribution, so the payback is 2.7 years while the client lasts 2.5. The shortfall is 460 ₴ on every cooler.
Why is a lost cooler invisible in the report?
Because it produces no document. The cooler was bought as equipment two years ago, and when it vanished from the office nothing changed in the till: no money went out, no invoice arrived. The asset stopped existing, and a monthly report does not record that.
What does churn actually cost?
Add up three things: the coolers lost, the repair of the ones that come back, and the cost of winning replacements for the clients who left. At 25% churn that is 186 000 ₴, 43 200 ₴ and 222 000 ₴ a year. The first two are usually absent from the report, and together they come to 229 200 ₴.
Is a deposit on the cooler worth taking?
It works, but more weakly than it looks. A deposit of 2 000 ₴ would lift returns from three quarters to nine in ten and save 111 600 ₴, but it would scare off every fifth new client. The net effect is plus 47 856 ₴, which is not enough to get out of the loss.
Which gives more, the deposit or the price of a bottle?
The price, and by a wide margin. Twelve hryvnias on a bottle give 276 480 ₴ a year against 47 856 ₴ from the deposit, which is 5.78 times more. On top of that the price needs no register of deposits and no arguments when the cooler comes back.
How much does the price have to go up to break even?
Divide the loss by the number of bottles in a year. Here that is 109 120 ₴ over 23 040 bottles, which gives 4.74 ₴ a bottle. Everything above that sum is already profit, and that is why a rise of 12 ₴ delivers plus 167 360 ₴.
How many coolers should be kept in the store?
Enough to put a cooler into a new client's office the same day. In this business that is 60 machines, which is 12.5% of the ones standing with clients and 372 000 ₴ of frozen capital. A smaller reserve means turning the client away or delivering the cooler in a week, and in a small town that costs more than idle equipment.
What contribution should a decision on a new client be based on?
The contribution over the whole lifetime, not over a year. On a figure of 2 296 ₴ a year a small office looks acceptable; on 5 740 ₴ over the whole term against the 6 200 ₴ the cooler costs, it simply does not add up.
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