This episode features a detailed discussion with Joe Shelton, an expert in portable sanitation with decades of experience. Joe recounts his early start in the industry, working for his family's business, and how that foundation led him to launch his own company and later a successful brokerage.
The episode focuses on the role of brokers in the restroom industry, dispelling myths and highlighting their potential to enhance business operations. Joe addresses common concerns about brokers, such as reliability and payment issues, and offers practical advice on how to leverage a broker's services to expand reach and improve efficiency. He stresses the importance of fair pricing and quality service, noting that while some operators may view brokers skeptically, they can be instrumental in reducing the burden of sales and marketing, especially for smaller businesses. Joe's candid discussion provides a comprehensive look at how brokers can be allies in the competitive sanitation market.
Takeaways:
Visit viprestrooms.com to learn more and contact Joe
Companies mentioned in this episode:
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Hello and welcome to get flushed. I'm Pete.
My guest today has an absolutely immense history in portable sanitation with over 30 years of hands on experience, operational insights and strategic expertise. As a ten year old, Joe Shelton started working in his parents restroom company.
th his wife in Los Angeles in: In:Alongside that, Joe runs a successful restroom brokerage under the banner vip restrooms, and he's worked with toy company to develop the Sandman portable restroom software. Today's episode is all about restroom brokers.
If you're not familiar with the brokerage model, the broker acts as a middleman between customers who need portable restrooms and the operators who supply them.
It's fair to say that I've read some negative things about brokers and I've heard a few horror stories where pros have been treated poorly or not been paid. But I've also seen lots of positives and there are plenty of examples where brokers and operators work very successfully hand in hand.
In this episode, Joe wears his broker's hat. He talks at length about how to work the relationship between your restroom business and the restroom brokers that operate in your area.
He's very open, the conversation is both full and frank, and Joe shares a lot of very sound advice.
Pete:I'm joined today by Joe Shelton, who's called from Carlsbad in California. Joe, how are you?
Joe:Great, how are you doing?
Pete:I'm good, thanks. Welcome to get flushed. It's great to have you on the show.
Joe:Thank you for having me.
Pete:We've done some preliminary work to get ready for the episode and I think it'd be fair to say you run a fairly extensive and quite a complex operation which isn't just about portable toilets.
Joe:No.
d their own companies. And in: ld to United site services in:And at that time, we also started participating in a software and giving a software company the inside scoop of standard operating procedures of a toilet company since I am a second generation and my kids now are third. And also in that same time period we started vip restrooms because there's so many brokers that just don't know the business.
They don't know the hardships of being a brick and mortar company and they're not always keeping the brick and mortar company first and foremost along with the customer's needs. There's two sides of that.
And so we started a brokerage to help create a better brokerage, one that provides more of a sales team for toilet companies.
Pete:Brokerage isn't a model that happens in New Zealand, but my understanding of it is you act as the middleman between the customer and the restroom operator.
Joe: And I was introduced in about:Because if you view brokerage in a positive way, you actually get a free advertising team. You get a free sales salesman, if not a group of salesmen. And it takes a cost that you normally have to pay.
And if you do it right and you lower the price 20% or 30% so he can mark it up and still be competitive, you actually are basically paying all the advertising and all the costs for the sales team after they got the job. You don't have to pay for it until you get the job, which there's a lot of expense in there that you offset.
And, and so it's super beneficial if you can be fair to your brokers and you'll get a lot more work.
Pete:So that's almost like a quid pro quo that they're selling your service. They employ the sales team, they do all of the legwork.
If you're a small, maybe a one man band or a small family business, you might not have the depth to do all that yourself.
Joe:Oh yeah, that's probably one of the favorite types of clients we want. Of course we want the big companies, but service is key. As a broker, we don't get to touch the toilet.
We don't have an effect on the quality of service. As a broker, I know that we rank vendors and companies to our first primary, who we'd want to use.
And then based on price and quality of service, if a toilet company is going to give us a good price and they rock at service, you know, we're going to do extra advertising in those areas. We're going to place all of our work with them because we're basically a customer.
You know, theoretically you should look at us as a customer who's going to bring all the work. And so I would recommend any toilet company to call every broker.
And you want to do everything you can to be their only customer because now you've taken all that work from all of your competitors.
Pete:Can you talk me through just how the money side of that works? Who does the invoicing and the billing? And where does the money flow go?
Joe:So the broker's going to bill the customer. And then if it were me, I would want the broker's credit card.
VIP restrooms is the company that we own and we will give out our credit card because first and foremost, the guy doing the work needs to get paid and who wants to chase money.
Pete:In effect, then the restroom operator just processes a routine invoice at the agreed rate to VIP restrooms. And then VIP restrooms follows up with the customer for the actual invoice for the job.
Joe:Yeah.
And the simplest way and the best way for the sales team at the brokerage to really be able to adequately quote the customer in a timely manner is to have a set rate.
You know, a blanket rate that covers like your standard toilet, maybe your sink toilet, a PJ flush for a basic one unit construction and a one or two unit special.
Now, when we get quotes for bigger things, then of course, our team knows to then send out a quote request because you don't want to be just bidding on a 30 unit job at full book price. We know that everybody bidding that's probably going to be fighting for it. And so we want to be competitive.
That doesn't mean you guys aren't getting that same bid request. And ultimately you have two options.
You could either give us the same price you're giving the customer requesting it, or you can hedge your bet, give us a little bit lower price so we can come in close to you. And then now either way, you're getting the job. It just comes down to who built a better relationship. You're basically playing survivor.
It's not always about price. Sometimes it's about who can work the phones the best and who can be likable. You know, some people like me.
Some people like a more dry person who's just straight to the point. Most big jobs are going to call three people. You want to be two of them.
And if you're smart, you'll have three brokers bidding on that and you'll be the fourth bid. And now you have four people to maybe try to sell that for you and you're still doing the work. And that's how I've always viewed it. It's a dartboard.
Pete:I'm glad you've mentioned price, because we're seeing some crazy pricing in the market, not just here in New Zealand, but in the UK and in the US as well. And I think that's probably a reflection of the economic environment, that things are a bit unsettled.
Interest rates have gone up and the whole market's a bit shaky at the moment. But I'm pleased to hear that you say it's not just about price.
Joe:Price is tricky, no doubt. I came from my wife and myself doing toilets. We had one truck, one toilet.
And, yeah, you can lower your price, you can take on a bunch of work, but ultimately the cost of that toilet doesn't change. You still have to come up with the money to buy more toilets. Here's the bottom line. A lot of drivers look at the owners and they go, I could do this.
I saved up:And they race to get the toilets out and they lower the price, thinking, that's the way when, hey, we're service paced business. Who buys Oakley's and then who buys the sunglasses at the small gas station for a 10th of the price? The quality is completely different.
You're going to burn up trucks the same as the guy who's charging $200 versus 100.
The only difference is, are you going to have the cash to buy a new truck four years end when you need a new one because you've been selling it for too cheap.
Pete:I'm so pleased to hear you say that, because I've come across so many operators who just pull the price lever and think that the lowest price is the only way and the best way to get units out on the ground. And it just makes me despair sometimes. You might as well just throw dollar bills out.
Joe:Yeah. It's a race to the bottom.
Pete:Yeah.
Joe:There are some companies within our markets that will do that and, you know, there's enough work for everybody. You just have to be patient. You have to work hard, do a good job.
Pete:Yeah.
Joe:And over time, word of mouth. If you work with brokers, your reputation will grow, you'll get more toilets out there. People start to see you and it's a long game.
This isn't a get rich quick business. It's a ten year process to get a company to where you're actually pulling money out.
If you're growing and you're doing a good job, odds are you're not going to have cash for a lot of years. It's all going to be in equity.
Pete:Because you have to keep investing to grow the business. You can't build a business unless you buy more restrooms and more trucks.
Joe:Yeah. And it's $650 if your margin is only 10% because you're charging under $100 now. You need, what is that, 60 toilets out to buy another toilet a month.
Pete:Yeah. Which is a lot of work.
Joe:Yeah. And you're running around and your truck is going to cost you 120 grand now.
Pete:Yeah.
Joe:Ultimately, you don't want to put toilets out too cheap.
Pete:We see it all the time, though, Joe. Honestly, it's crazy with your vip hat on, how do you manage the quality?
Because the last thing you want as the broker is for a restroom operator to be doing those hit and runs where they don't really service or don't clean the unit. You want the best possible service at that price level.
So what do you do with restroom clients to make sure that they're at the right level, quality wise?
Joe:Our goal is to find like minded restroom operators, ones that care about service.
They understand that we're a sales arm to them, not just a broker, that we're taking a little bit of that cost, and we're covering more of the Internet than they are, and they do a good job. It's just like any customer. If they screw us, do you think we're going to use them again?
Pete:No, of course not.
Joe:Right. And so the better you can treat a broker, the more of a teammate you're going to have and a bigger sales team that you're going to have.
When I was doing toilets in LA and I was working with one of the larger brokers, we gained like, $180 to $200,000 a year in business, like, instantly, because we showed up when we said we were. We answer the phone when they call, we answered when they email or text us, and we gave them a fair price so that they can make money.
They gave us all the work.
Pete:That would have taken you years to build that on your own as a husband and wife team.
Joe:Oh, yeah.
Pete:Just the amount of effort I can imagine would have been required for you to achieve that growth would have been something else.
Joe: ime, we just came through the:And when I picked up this broker. That $200,000 a year in business was crucial for me to not have to lay people off. It was basically what saved my business from tanking.
And so it was quite a boost. And since then, I've basically wanted to partner with every and any broker that would call us.
Pete:It's refreshing to hear this because I serve the Facebook chat groups and the restroom groups and all of that. And there's always two sides to the broker conversation.
It comes up quite often online and you get some people who say, yeah, find a good broker, work with them, you have a solid relationship, and then you get the naysayers, the ones who, whatever you do as a broker, they're just going to dismiss you and diss you and claim that you're out there to rip them off. And it's really refreshing to have the other side of the coin explained that, you know, you're coming across as really open.
And the fact that you've said it's a team race, relationships, is it all really?
Joe:Yeah, we're a partner. The word broker is very broad. And yes, there have been outfits out there that wouldn't pay their toilet companies that they work with.
You know, they might try to gouge the client and they just sell it for $500 and place it with anybody. And yeah, there's a percentage of the population that won't blink an eye at a dollar 500 toilet.
But being a toilet operator, I understand that and I want to be a benefit to the toilet companies that use us. I want to partner with them.
If there's equipment that we can get for them, you know, if they have a job that they just can't do on their own, well, give us a call and we'll be that intermediator between maybe your actual competitor and get you the equipment for both of you to do the work.
Pete:Because I'm guessing you've got a pretty big network of friends.
Joe: the president of PSAI back in:I know all the owners and it's always been my policy. If I know that I'm being called by a competitor of mine, I don't want to put my toilet next to their toilet without them knowing.
I want to give them the opportunity to at least save it. So we'll reach out to them if we know and be like, hey, this person's asking for quotes.
You might want to have a sales guy go out there and see what the problem is because, you know, I'm going to still quote them. I'm not going to try to beat their price at no means, because ultimately, I know the cost to do a good job is expensive.
You know, you lower your price, what are you going to have to do?
You're going to either have to buy used equipment, you're going to have to buy used trucks, and you're going to have to hire cheaper employees, and that's going to lower what your quality of service, which then now you're on a spiral down. And so ultimately you have to have a balance and another big price thing.
And I made this decision in:And when I entered into the sales team, I had a huge argument with one of my coworkers. I was selling them for 95 and he was selling them for 89. I'm like, why can't we get 95? I'm selling them all day. And there was this whole thing.
:But our toilet price was almost the same. And I said, there's no way we can stay in business. Our margins are just getting crushed. We have to be at 185, 200.
,:How do we get there and get what we should based on how the cost of everything has gone up.
Pete:With low prices, nobody wins. The customer doesn't win. They might think they are because they're getting a low price, but their service will invariably fail.
You can't keep providing a great service at a rock bottom price. The economics just don't add up.
Joe:Let's be honest. There's companies that are going to pin you against your competitor and they're going to ask for the best service.
They're going to expect the best service, but yet they're going to say, hey, Bob will give it to me for $50. Will you do 45?
y, you know, back in probably:They probably had a total of 30 units out. And they kept grinding me and grinding me down on price.
And it got to the point where they would call me and just yell at me and threaten that they were going to leave me if I didn't do x, Y or Z. And in this case, they wanted, like, a case of paper a month extra. And I said, wait a second.
I go, so if my margin is 10% on your toilets and a cost of toilet paper, a two rolls is like a dollar. If I'm only making $10, you're asking for a 10% margin cut? Yeah, I can't.
I mean, as much as I want to, you know, and what I did is, I said, listen, I called United Site Services. I got a rep form that I knew, and I said, here. I gave the customer the salesman's number. I said, you know what? You need to call him.
He'll give you the price, but you're not going to get the same service you were getting. And so about a year and a half later, they begged for us to do the work again.
Pete:I think a lot of listeners will really enjoy hearing that because the pressure is relentless.
I don't know whether the industry has allowed that to happen, because historically, it was a lot of smaller operators, and they would feel they were competing against their neighbours or the operator in the next town. For me, the mindset needs to change, and it needs to change pretty radically.
Joe:Yeah. And, you know, you just have to have confidence in what you're doing and know that. You know what?
It's just like we tell anyone who doesn't have high self esteem of themselves, they start to do things they normally wouldn't. When they don't have a good high esteem, they're taken advantage of, and it comes down to us not being taken advantage of.
Your time is worth more than $15 a week.
Like, if a customer's talking to me and they're complaining about price, I say, well, well, how much do I have to pay you to come clean my toilet and my house? Are you gonna drive all the way over here for $15? No way.
Pete:The industry has trained them to expect a really low price.
Joe:As you were talking about price and trying to get work done, you know, something that also came to mind is you have to be willing to partner with your competitors. The trash industry in America, they sector off spaces and they bid out that to the cities, which I don't agree with at all.
I think there's a lot of unfairness with that.
But I do believe, and I've always done this, is that if there's another small operator, and you're a small operator, communicate with that operator where you're thin.
And if there's an area 30 miles from your yard or 40 miles that you have 15 toilets, you know, it might be too far for you to actually operate, but he might have ten or 15 toilets there. And maybe you broker with him and say, hey, will you do my services in this area? And I'll do your services in this area.
You're still his competitor, and yeah, you're still bidding for work.
And eventually he might get bigger than you in an area, and you might get bigger than him, but in the end, there's usually enough work for everybody, and at least you're operating profitably, because that's really what our business is about, is route density.
And if you can help a competitor and yourself at the same time, and both people can make money, then that's another avenue that we've always encouraged at our toilet companies. And that's kind of why we did the brokerage as well, is because, you know, it's hard to be a small family owned business.
And I knew that I could help others through providing sales and putting other people together that might have equipment where others didn't.
I noticed that because United site services would need equipment, but a lot of the local companies wouldn't rent back and forth to different companies, and so we would be the middleman. And, you know, when I sold united, I think my top three customers were my competitors. There's money to be made when you help others.
Pete:I'm convinced of it. Absolutely.
I've heard so many restroom operators say that, and it's a shame that sometimes the default position for a lot of people is to be hostile, to see every other restroom operator as a threat. And yeah, sure, they are at one level, but it does pay to have friends.
Joe, if I'm a restroom operator and I'm listening in, I think you know what I'd like to jump on board with Joe. What's the best way for them? A, to get in touch, and then b, what's the process of onboarding them?
Joe:Our website has a request. Viprestrums.com has a request on there to become a vendor. It's pretty easy. And ultimately, we don't always have a lot of work in your market.
You know, there's certain parts of the country that there's just not a lot of work, you know, the population's low or it's farm area, but we will get calls from time to time. And we can't promise that your market's going to have a thousand toilets. Like we were talking about Los Angeles, one of the biggest markets.
But you go into middle America where there's a population of 10,000 versus millions, it's going to differ. And that's where you want to contact every broker. I'm not here just to try to build relationships with the toilet companies and want them to use me.
No, listen, the heart of why we did brokering, the heart of why we developed a software for our industry and helped participate in that is to help others get through that. Anybody who really knows me will know that. That's really where my heart is.
Sure I want to make money, sure I want to get something out of it, but it's our goal to help others in this process. And so definitely call every broker that you find.
When you search portable toilets and you see that there's all these companies in your area, you should call every one of them and see if you can help them. And then be fair, be fair to them and make sure that you fully understand what you're getting out of it.
And not just look at them as the bad guy, but actually understand that they're a sales team and they have a cost. And really all you have to do is sign up, call them, and fill out the form so we know what areas you service, what areas you don't service.
And so that way we can database it and start sending you leads.
And ultimately, we are dependent upon price because we have the ability to send out a request to all of your competitors, and we probably already are. And we already probably know everybody's price. And so now we know what we know the market price.
It could be $200 in Rhode island, it could be $300 in Rhode island, or it could be a $100. Well, if you're giving us a price that we can't put a margin on it, then are we going to use you?
Pete:You're out of the game.
Joe:Yeah, you're out of the game. So you got to make sure you understand your market price.
And you got to know that for us to make money as a broker, we need to be able to mark it up 40%. Otherwise, there's no point of us being in business because the sales team, advertising, all of that costs money.
Odds are if you search in your area and the top seven people are brokers, then you might as well stop marketing and paying for advertising. And you should start calling all those brokers because guess what? You're not going to beat their advertising. You just don't have the buying power.
Pete:And that's really crucial because the cost of a good employee in that sales space would be more than that independent operator is going to generate themselves.
Joe: a month. Advertising could be:And so ultimately, if you really consider the market price of where everybody's at and give them space to make money, then you're going to find a teammate, a salesman. You basically hired a salesman, but you don't pay them until they actually get you work, which is the best kind of salesman you can possibly want.
Pete:It's a topic that's come up in conversation quite a lot. You know, at Christmas last year, I did the daily episodes where people sent me questions, and one of them came up was, should I use a broker?
And I didn't go near it because I didn't know enough about it and I didn't have a contact at the time who could tell me the ins and outs and explain how the brokerage system worked from their perspective. So it's been really good to hear this.
Joe:Get a credit cardinal. I wouldnt bill a broker unless youve used them for more than a few years and you trust and youve met them.
Of course I want to say you can trust me, but you know what? Get my credit card. Dont bill me. Get the money up front. Because from a business standpoint, from an operator standpoint, cash is king.
You can do much more with the cash than an accounts receivable list. Dont chase the money. Its not worth it. And ive been a vendor to many brokers or even other companies.
And more than once, friends have gotten to a point where they're robbing Peter to pay Paul and they got way behind with me. And that was tough.
And I could see how it can easily happen when you're running a business and you're like, oh, shoot, I'm going to just put off paying this guy to pay this guy. That's business. And so I would always say, get a credit card from the brokers. Protect yourself.
Yeah, but also make sure you make their work a priority because ultimately it's your toilet out there and it's your name. And if a broker's not happy with you, that should say a lot about you.
Pete:So in the brokering relationship, when a toilet's on site and there's a problem, say there's a tip over or they've run out of paper, does the customer on the ground phone the brokerage or the restroom operator?
Joe:Well, in a perfect world, they're phoning the brokerage so that the brokerage can deal with the guy on the ground. Now, it's important that you communicate to the broker anything that the client calls them with.
When I had brokers, they loved our company because we would never take their job. One of their clients called us and said, hey, we need another toilet.
We're going to say, okay, well, let me get that over to your sales rep and send that over to them. Or take the order and send it to them and say, hey, this one's yours. Because ultimately they put in the time and the money to get that work for you.
Pete:So there's a bit of education both ways there, Joe. So you need to educate the restroom operator to understand that they need to refer work back to the broker.
Joe:I mean, they don't need to, but listen, treat others the way you want to be treated, and then at the.
Pete:Same time, you've got to make sure the customer on the ground, the hirer, knows that they need to ring the brokerage rather than ring the driver or the restroom operator direct.
Joe:Yeah, or you just communicate the changes.
Like if there's extra services, if there's a pickup that they called to pick up, well, let the broker know so that they don't keep billing the customer and then create a, have a, do a chargeback. Because if we don't know you picked it up, we're just going to keep billing the customer.
And then three months later they're pissed off because we bill them for two extra months. Communication is key. We definitely want to know your operations manager's number. We want to have an after hours number.
azing things have happened at:And you know what? You're the only one who answered.
Pete:Absolutely. I've got one question which somebody asked me last week, which is about signatures on contracts.
Now, I've never got really hung up about this because I always figured that there was an email trail and that we'd had a good record of the agreement process before we put a toilet on the ground. But being a broker based in California, I'm guessing that you very rarely get on site with the customer.
So are signatures on contracts an issue for you? And if not, why not? And if so, how do you go around getting the customer signature on paper?
Joe:Well, toy company is the software. They're the ones who sell the software. And one of our first things we implemented is that the customer at point of sale can sign through the system.
The quote gets sent and the customer is prompted to sign the terms and agreement.
As a standard operating procedure, you could easily make it, hey, we don't complete an order until you've signed online and then that's data based in the system. We also, on all our invoices state that, hey, this payment of the invoice which the terms and agreements are always on, basically is a signature too.
So you kind of want to have that verbiage in there to make it known that hey, on almost every document you get from us, it's got the terms and agreement.
Pete:I got burnt most of all where project managers or site managers on construction or civil projects had called me, asked for a restroom and we delivered one and then when we sent the invoice it'd come back, oh, there's no purchase order number.
And I got burnt more times with that, arguing with companies about purchase order numbers or they'd given me a purchase order number which wasn't correct. And I had more problem with that than I ever did with signatures.
Joe:Another big thing that we decided to do is credit cards. I try to collect a credit card for most things.
Now if Amazon called, if Dell called like a major traded company called, we might bill them, but we're probably going to still ask for a credit card and if they push back then we'll deal with that. But for the most part, we don't want a bill if we don't have to.
And you've got to show some, you know, hey listen, if you don't have a credit cardinal, youre probably not a company we want to do business with realistically and we understand the larger companies, its too much work for them to use a credit card. But unless theyre going to order 20 or 30 toilets or we havent heard of you, then were probably going to want a credit card.
Pete:Allowing the restroom operators to have your credit card also avoids them getting stuck in any 90 day payment terms or anything that causes them cash flow pain like that.
Joe:Yeah, yeah, exactly. From a broker standpoint and from a vendor standpoint or an operator.
Getting the cash upfront allows you to easily be able to grow, and I would always recommend that. And you know what? A collection agent cost 70 grand a year.
So I'd rather pay two or 3% on the sales and get the money up front so I can keep growing my business than to wait 90 to 120 days or not get paid at all.
Pete:Is there anything else you want to put in this episode? I'm hoping we can do some more.
Joe:Definitely follow up if people have questions or whatever. I'm all for hopping back on. And, you know, education is key. Not everybody's got to grow up and start in the wash bay and then.
Pete:Be a driver next week on the fries.
Joe:Not everybody got the whole thing. Sometimes you just go after it.
You know, I'm all about educating, helping others, and I think that there's a lot to learn from everybody and my way is not the best way all the time. You know, I'm still learning at 30 something years of doing this.
Pete:I wasn't expecting to talk about brokerage this morning, but I think that'll be an absolutely invaluable episode. I think people will listen to that and think, hey, you've answered a lot of questions, Joe.
Joe:Well, I appreciate your time and hopefully we've helped some people.
Pete:Yeah, fingers crossed.
Pete:Take care, bud.
Joe:You too.
Pete:Cheers.
Joe:Bye.
Pete:I'd really like to thank Joe for helping me to make this episode. It was entirely unscripted, and until we started to chat, I don't think either of us really knew where we were going to go.
I've made over 130 podcast episodes for get flushed and other shows, and I knew that this was going to be one of my favourites as soon as I started to edit the recording. As Joe said, brokering doesn't work for everyone, and I understand why some operators might be reluctant or openly adverse to using a broker.
You might think that they're riding you by charging your units out at full rate while only paying you 60 or 70% of the charge. And if you've already got plenty of work and a successful sales funnel, you might not need to take that hit.
But the other side of the coin is that a broker can take away all the pressure to make sales, deal with customers, and chase payment. That in turn could and should free up a lot of time, effort and resources that otherwise eat into your business.
Especially if you're a smaller operation where you're hands on and don't have a dedicated sales team to chase leads.
In a situation like that, you have to ask whether it's better to get 70% hassle free or miss out completely because you're too busy to make the calls or you can't compete with the brokers on marketing, sales, and customer relations. The most striking thing about today's episode for me was Joe's openness and willingness to help others.
Honestly, we could have kept talking for hours, and I hope he'll be back on more episodes in the future. In the meantime, if you want to know more about Joe as a broker, please visit viprestrooms.com or follow the link in the notes for today's show.
That's all for today. Thanks again to Joe, and thank you. I've been Pete and you've been listening to get flushed.