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Iceman in the Philippines [Flashback* 07.02.2011]

iceman in the philippines
Here’s a recent comment from faithful reader and supporter, Monty Man:

“My wife and I started two small businesses in Nueva Ecija and employ the family members so that they can provide a little bit for themselves. It certainly isn’t much but allows them to stay home and not have to look for work in strange and dangerous places. I encourage my fellow ex-pats to pony up a little bit of that retirement fund and put your in-laws to work!”

Monty was responding to a recent post I published, “Sister-in-law Marjorie at Risk in Kuwait.” I asked Monty if he wouldn’t mind sharing what those businesses are. He sent me the following email which I greatly appreciate. A BIG thanks to Monty for sharing this. Here’s the email which he said was OK to share along with some terrific photos:

Ice Cubes

“The first time I visited my wife’s family in Nueva Ecija, I was treated to my first San Mig.  But I noticed 2 things:  I could only buy it by the bottle and it was hard to keep it cold.  I kept asking, “Where is the liquor store, so I can buy a case of beer, and a bag of ice?!!”  Well, no store and no ice.  The worst part was no cold beer.  Here’s why:
The only ice available was sold by a guy in a little shed along the road.  He kept a block of ice under straw inside the shed.  To buy the ice, I’d have to chip off a chunk, wash it off and put it in my little styrofoam cooler (wrapped with packing tape, of course?!!)  If I didn’t buy it by nine or ten o’clock in the morning, it’d either be gone or melted.  When happy hour rolled around in the evening, there was no ice to be found.  I’d be drinking lukewarm beer!  I gave my brother-in-law a few pesos to hop on his motorcycle and cruise far and wide, up and down the road, to find someone with ice.  Nope, no ice.  Hmmmm……….the seed of an idea was planted in my mind.
On my second visit to Nueva Ecija, I did my own bit of research and visited the other markets and villages in the area.  It was the same story:  guys in little sheds, trying to keep  blocks of ice cold under a layer of straw, melted or gone by late morning, warm beer by late afternoon.
I shared my little business idea with my wife and father-in-law.  They thought it would be a winner!
Long story short, by my next visit to the venerable province, I had leased a small storefront along the roadway, purchased a commercial ice maker and water filter, and within a short time was open for business.  I would be the first to provide bags of clean, clear, cubed ice.  The price would initially be very low, because we had to compete with people selling “ref ice”,  the little tubular bags of ice they make in their refrigerators.  In my planning, I hadn’t known about that aspect, but I captured their business pretty quickly.Ice cube and the Filipinas
The storefront was larger than I needed for my ice business alone, so my wife, Vilma, and I set up her sister, Raquel, with a sari-sari store next door.  While there is an abundance of sari-sari stores everywhere, we made this one special by selling sundries and notions that others didn’t carry.  Also, Raquel seems to be a natural salesperson!  She was drawing customers faster than my ice business!
Frankly, it took a little while before people caught on to the concept of clean, bagged ice.  They were also timid about buying from an Amerikano.  As soon as I stepped back and let my “manager” (my brother-in-law Angelo) take over, sales picked up.  Okay, I was content to sit in the background and enjoy some cold, really cold, San Migs.  When was our busiest time of day, you ask?  Well, happy hour, of course!
Monty and the Ice Machine
Now back in the U.S., my asawa and I hear from our “employees”  on a regular basis.  Business has been good, but the rainy season has certainly slowed things down.  We are hoping that once the rain stops and the new rice planting season begins, that sales will soar again.  Both Angelo and Raquel earn enough money to pay the storefront rent, the electric and water bills, draw a salary, and put some profit in the bank for yours truly!”
Note some critical things that Monty Man did. He saw a need, got an idea, researched and filled that need. Smart plan! Monty has inspired me to start a similar business for my wife and brother-in-law Joery who lives with us at “The Compound.” Again, Monty, thanks so much for sharing this. Hope this will help my other expat readers out there. I know it certainly has proved beneficial to me. If you have something about the Philippines you would like to share, just send me a email via the “About/Contact” section listed at the top upper left-hand page of this website. I’ll be happy to publish it.
The Sari Sari store

42 thoughts on “Iceman in the Philippines [Flashback* 07.02.2011]

  1. How’s the red tape in the Phillipines?
    In America an immigrant could spend $15 -$20 on a car, a little house paint, and he was in the taxi business. Now a permit alone is $50,000.00.
    Once people got established they lobbied to eliminate competition.
    America is no longer “the land of the free.”
    We can’t even find jobs, but the rich keep getting tax breaks. Elmer

  2. Well done Monty!
    And a very good example of “teaching the man how to fish…” without having to leave the home country.

  3. Monty, what was the reaction from the existing “block ice” and “ref ice” sellers?

    1. Hey Lance; Not sure I can fully answer that question. The shop next door simply gave up selling ref ice. But their main business is their eatery, so no big deal. I didn’t see anyone closing their ice shed. Also, no angry persons have shown up at our door with torches and pitchforks. Frankly, I was concerned about being a foreigner coming in and stepping on some toes, but, given that a dozen sar-sari stores in a row can coexist makes me think that competition is normal and expected. Everyone’s just trying to make a buck,er,peso.

  4. Very inspirational Monty! My wife and I are planning to start a business when we get there. Not sure what it’ll be. We have a few ideas. What red tape did you run into (if any at all)? And do you mind sharing the start up costs of your ice business?

    We did finance my mother-in-law’s sari-sari store last year (sent $150 or so to help her fill her store with product) and she’s making a small profit on it and has never asked for anymore help.

    1. Hi Pauley; I expected some red tape and tried to prepare for everything before I left the states for the Phils. I thought I’d need tax forms, a tax ID, a permit, an inspection, a business account at a bank, and a business name registration. When I got there, the mayor simply said, “See how it goes for awhile. If it works out, we’ll worry about the permit later.” I swear, that’s all there was to it! But, I did open the bank account, of course.

      1. Yeah, the rules almost seem too lax, hope it doesn’t come back to bite me later. Nobody seems worried about it except me, so I’ll just try and roll with it.

        Yes, some excellent feedback, for sure! I’ve enjoyed sharing my experience, and thank you for allowing me the space on your blog.

      2. Getting an ice machine for my wife’s relatives to sell on their island is a concept I think would make so much sense. We have been buying pigs so they could have a little piggery. I think an ice machine would make so much more sense.

      3. Monty, if the mayor decides you need a tax ID, permit, etc, what will the tax rate be for the ice business and sari sari store?

        1. Lance, I’m about to find out. My sister-in-law, Raquel, is making some changes to her sari-sari store, and the permit, etc. can no longer be put off. She has purchased some bins and will sell the various grades of rice that you normally see at larger stores. She is also going to sell soda, beer, and liquor. It seems these are items that customers have been clamoring for, so again, we will try to fill the need. And,of course, we can offer “ice cold” drinks!

        2. Thanks Dave. Not sure if sari sari stores are required to charge VAT, there is a minimum sales limit in most countries so very small businesses don’t have to bother with it. Maybe Monty can fill us in on the VAT and income tax situation later on.

    2. By the way, Pauley, the startup costs for the Ice Station were: the price of the ice machine, improvements to the storefront (lighting, some wood, screws and chicken wire for framing and screening the front, a sign, and a water meter), ice bags and a few office supplies. For Raquel’s sari-sari store it was simply the cost of inventory, around $700 to get her started. And may I say, she has a lot of stuff! People come for the items they can’t get at other stores, and go ahead and buy the regular stuff too, while they are there!

      1. Has there been any problems with offering credit at the ice station or sari-sari store?

        1. Nope, no problem. Much to the chagrin of my father-in-law, I was very firm on a “cash-and-carry only” policy. He’s old school and, if it was up to him, was willing to trade, barter, and give credit,.
          I was amused when Angelo and Raquel, his own kids, repeatedly told him “No way!” As my biyenan is a chain smoker, Raquel once told him, “I counted the cigarettes, tatay!” I think you catch her drift!

  5. how hard was it to locate the ic machine? thank you for sharing your idea.

    1. Dave,

      I have the same question as Maria. Where did you get the ice machine and how much did it cost?

      1. Hi Jack; There were several major brands and several different types of ice makers. I chose the one that, in my opinion, best met my needs. I negotiated my own deal with one of those companies, so hope you will understand my reluctance to disclose a price. Suffice to say they begin at three thousand dollars and go up from there. As I told Maria, I Google’d “ice makers” and went from there. The research was informative and rather fun.

        1. Monty,

          I am assuming that you purchased this is a local company in the Philippines. My asawa is from a small barangay in Leyte. Can you share more about your business plan? Did you start the sari-sari store from scratch? You talked about start up cost of $700 USD in an earlier response. I am also interested to know the size of your barangay. There’s lots of people during Feista time in May and the Christmas holidays but I am concern about having enough customers to support the business year round.

          Thanks for the information. You are definitely the Man!

          1. Monty,

            I am also thinking about making the ice at my wife’s mother home and having her brother or sister deliver the ice to other sari-sari stores. The main concern would be freezer space at the stores.

          2. Hey Jack;
            Yes, my search led me from the U.S. to Singapore to Manila. I ended up buying a machine manufactured in the U.S. and distributed by a company in Manila. Buying in the U.S. and having it shipped to the Phils is too costly.

            Our barangay is small and rural, as are the neighboring barangays. I assumed that folks would come from all around to buy my ice. Wrong! Not many own cars and the trike drivers stay pretty local. The rest is “walk-up” traffic. So, we are not drawing from as wide an area as I had hoped.
            Solution: just what you said! Become a distributor to other stores. Also, I’m going to lease some small spaces up and down the road and place freezers. I see your concern is freezer space. Yes, I was told by the sales rep who sold me the ice maker that, normally, I would have to supply the freezers. They run $200 at the local appliance store. So, one at a time!

            Let’s see, yes, we started the sari-sari store from scratch. The ice machine doesn’t take up much space, so there was extra room to spare in our store. My brothers-in-law did a little carpentry work, divided the space, made shelves, and made the screened-in front with the little selling “window” beneath the OPEN sign (see the picture above). Then we went to the “bodega” in Cabanatuan City and bought the inventory at wholesale.

            Yes, fiesta time in May was very lucrative! We couldn’t keep up with demand for ice. I need to do something about that next time! The rice harvesting time in April was also very good. The rainy season has been very slow. Haven’t yet experienced the Christmas season. Also, with two rice harvests each year, that should be good.

            Wow! Lots of stuff! Hope this helps! I like your ideas!

          3. Monty, if you lease several small spaces up and down the road and place $200 freezers, wouldn’t labor and electricity for these new locations be expensive? Guess it depends on how much the ice sells for per bag. Hope your expansion plans go well.

            For others planning a similar ice business, since ice cube machines begin at $3,000 and small freezers are $200, a lower risk alternative might be to set up a few locations selling “ref ice”, using filtered water in sealed bags (from a heat machine) to differentiate from other sellers of “ref ice”. Fill bags with filtered water at the main location, seal them and deliver them to the small freezers. Then if the business really takes off, buy the $3,000 ice cube machine and use it to stock the small freezers that you already own.

        2. Boy, we’re really stacking up these replies! I hope this lands in the right place, in response to Lance’s latest comment.

          Labor’s okay, I’ll keep using family members, and they get a percentage of sales as their wage. They’ve done pretty well, so far!

          Electricity is the killer! It’s my biggest expense. Fortunately, the ice machine shuts itself off when it is full, so during slow periods like the recent rainy season, the electric bill has been considerably lower. Whew! Happy about that!

          Filtering the water is a key selling point. Parents have remarked that they prefer the healthier water (ice) for their kids.

          Yes, I’d have to make a profit at those satellite locations, so will have to try it one freezer at a time!

          Perhaps someone will give your lower-risk alternative a try. I’d like to hear some feedback on that!

    2. Hi Maria; It took a while. I started by simply Google’ing “ice makers” and went from there. After that, it was alot of emails and a few phone calls. I went from knowing nothing, to making the purchase, over 3 months.

  6. “Business has been good, but the rainy season has certainly slowed things down. We are hoping that once the rain stops and the new rice planting season begins, that sales will soar again.”

    Monty, now you just have to even out your cash flow by thinking of a new business that will be busy in the rainy season and slow in the dry season. How about selling umbrellas? lol

      1. LMAO! I swear I didn’t read your umbrellas comment Lance! Good Lord! Great minds think alike!! lol …. I need to read the full comment next time.

    1. Hi again, Lance; My asawa has said the same thing, that we need something else to sell when the ice business is slow. Maybe umbrellas ain’t such a bad idea! Help me out, readers!

      1. Well, maybe you can purchase a blender and use that ice to make Marqarita’s. What else is there to do during the rain?

  7. Monty Man,
    Liked your article here. I am really close to where your at. Only a few miles up the road in Cauayan. I too have felt the displeasure of not being able to buy ice at night. I did not have the funds to go out and get the ice maker though. I just started the “ice in a bag”. It works for having a cold mix to go with the drinks at night! Still looking for that perfect “wanting” so I can finally retire there. For now it is all just dreams and working hard to make it all happen! Glad you have some good people working for you. It is hard to find that even with family! Maybe more so with family! Good luck. maybe we can get together for a “cold” beer sometime!

    1. Yes, I am blessed with a family willing to work hard. They are thrilled with running a business. Absolutely, a cold beer sometime!

  8. Monty Man I do not want to rain on your parade but have you checked around and found out who can work on this Manitowoc machine in the province. And how about availability of parts. Manitowoc and most all state side ice machine makers put out pocket service manuals for the model of unit you have for service techs to use in trouble shooting the machine. I would suggest you order one if not provided by company you bought it from. I doubt if there is technicians outside of Manila or Cebu who knows how to work on same. No two ice machine companys are the same like a Ford and Chevy each has different parts and problems. If they do not know what they are doing they can cause more problems then repairing same. I would suggest if you haven’t done so is to find a tech locally who knows how to repair this machine before you need them. Ice Machines are high maintenance, you cannot just plug them in and forget about them, they require maintenance. If not the cost of making that ice will start going up and before long you are paying more for water and electricity then ice produced.This is just my 2 cents after working on Ice machines for 25 yrs.

      1. No my wife is to Americanized to live in the Philippines after being in states for over 43 years. We have house in Samar, but only visit once a year for 1 month. Have been trying to get her to stay 6 months in Philippines and 6 months in States. But she gets bored after 2 weeks after finding out about local news, and no shopping centers close by to are town. Also are 3 grown kids and grand kids live close by us.She says I am not the one who has to listen to the family wanting to borrow money or to their problems which stresses her out, and she is glad to get back to states.

        1. Ah, the heat and humidity! After growing up in Illinois and Florida, I have been spoiled by the dry, cool climate of Colorado the past 35 years. Adjusting to the Phils. climate could be my biggest challenge! Dave, do you ever really get used to it?

          Our plan is to spend the summer months in Colorado and the rest of the year in Nueva Ecija, enjoying (?) the family and running our business. Dave, once you get the sari-sari store up and running, the SPW won’t feel so bored. Raquel was in the same predicament, but now she has a purpose in life. She is thrilled with managing her store! Just talked with her last night, and she is already making plans to expand!

          George, sorry to hear you won’t be around to work on my ice machine! Truth be told, though, Manitowoc has a trained service technician stationed in nearby Cabanatuan City. I’ve met him, even had him over for dinner (good business practice!), and he’s only a phone call away. The machine will be under warranty for a few years yet, so I think I’m in good shape. Having been an electronics technician myself for 35 years, I am not unfamiliar working on electro-mechanical systems, and the Manitowoc service manual is available online. But, perhaps I can email you if I get in trouble somewhere down the line?!!

          1. Dave, in addition to opening a sari sari store to employ some relatives, I remember an article about your father-in-law having some farmland. Couldn’t the relatives work at the farm instead if they had some start up money for seeds, etc? Might be a cheaper start up than a sari sari store, plus the relatives would then be some distance away. 🙂

          2. No problem just ask Dave on secure site for my e-mail address. As for warranty in the Philippines, I have found their not worth the paper their written on, after building house, and buying a car. Especially if you are a foreigner. I bought a Samsung refrigerator in Philippine thinking it would be under warranty and parts easy to find. Year later after fan motors went out, no repair warranty and no parts in country. Ended up buying parts in states and repairing it myself.

    1. I hope that he does too. I am really curious on this. I am moving to Ilocos Norte next year and I am very interested in possibly doing this as a business.

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