Distributor Business Remains Strong, Annual Survey Shows (Part 1)

1194_00026_growth-chart_web.jpg

(Image licensed by Ingram Publishing)

Bruce Beggs |

Two-thirds of those polled say 2015 total business was better than 2014’s

CHICAGO — It’s a different year but the same, old story. And it’s a good one!

Distributor business remains strong, based on the results of American Coin-Op’s annual Distributors Survey. The majority polled once again enjoyed better business than the previous year, and is expecting overall 2016 sales to surpass those of 2015.

Slightly more than two-thirds of distributors polled (67.4%) say that business—including sales of newly constructed vended laundries and replacement business—was better in 2015 compared to 2014. When it comes to sales projections, an even larger percentage (68.8%) believes 2016 sales will be better than 2015’s.

Just 13% of respondents say 2015 business was worse than 2014’s, while 19.6% say that business has stayed the same.

Distributors listed in the previous edition of the American Coin-Op Distributors Directory were invited to participate in this year’s unscientific survey, which charts 2015 business and makes comparisons to previous years.

2015 BUSINESS

This year, 67.4% of distributors polled said business was better in 2015 than 2014. That’s very similar to last year’s report in which 68.3% of distributors said 2014 business was better than 2013. In the 2014 survey, 53.7% of respondents said 2013 business was better than 2012.

Those who experienced better business in 2015 attributed their performance to a strengthening economy, store owners’ desire to replace outdated equipment, improved lending conditions and hiring additional personnel, among other reasons.

“The biggest factor is the rising water and sewer rates making the older, inefficient washers a liability,” writes one distributor. “Newer energy-efficient washers can save a customer almost one-half of their water and sewer costs. In a couple of cases, the savings are paying for the note payment on the new machines.”

The minority whose business suffered in 2015 said factors like a faltering local economy, less demand for equipment and even losing representation of a line of equipment took a toll on their output.

REPLACEMENT BUSINESS

Roughly 64% of distributors say their replacement business was up in 2015 compared to 2014. This falls short of last year’s survey in which 73.2% of distributors reported better 2014-to-2013 replacement business. It does, however, remain stronger than the 52.5% who saw their replacement business increase in 2013 from 2012.

Slightly more than 11% of respondents saw 2015 replacement business decrease from that of 2014, while 24.4% say it remained unchanged.

NEW-LAUNDRY CONSTRUCTION

American Coin-Op asked distributors to weigh in on how many new laundries they built and/or to which they supplied equipment in 2014.

There was a shift in terms of the numbers of laundries that these companies are building for and/or supplying. For example, 40.5% of respondents reported they built or supplied equipment to three or fewer new laundries in 2015. This compares to 69.2% in 2014, 54% in 2013 and 55% in 2012.

Meanwhile, 59.5% of respondents reported building or supplying equipment to four or more newer laundries in 2015.

The actual number of new laundries that distributors were involved with in some way in 2015 ranged from just a single store to one respondent reporting his/her company dealt with 40 stores.

Following is a rundown of the most popular answers from this year’s survey:

1) 1

2) 4

3) 2 and 5 (tie)

Roughly 35% of distributors surveyed said their new-construction total for 2015 was higher than the previous year. Comparing to previous surveys, approximately 48% said their new-construction business was up for 2014; roughly 39% said it was up for 2013; and approximately 41% said it was up for 2012.

About 41% of distributors surveyed said their new-construction total for 2015 remained the same as 2014. That compares to approximately 38% of distributors reporting no change in 2014 from 2013, roughly 43.9% reporting no change in 2013 from 2012 and 23.5% reporting no change in 2012 from 2011.

Roughly 24% of distributors said their new-construction total was lower in 2015 than in 2014, which is up from the 15% who reported lower new-construction totals in 2014 from 2013. Earlier surveys showed 17% with lower totals in 2013 than in 2012 and 35.3% with lower totals in 2012 than in 2011.

Check back Thursday for Part 2: Equipment mix and store size trends

About the author

Bruce Beggs

American Trade Magazines LLC

Editorial Director, American Trade Magazines LLC

Bruce Beggs is editorial director of American Trade Magazines LLC, including American Coin-Op, American Drycleaner and American Laundry News. He was the editor of American Laundry News from November 1999 to May 2011. Beggs has worked as a newspaper reporter/editor and magazine editor since graduating from Kansas State University in 1986 with a bachelor’s degree in journalism and mass communications. He and his wife, Sandy, have two children.

Advertisement

Latest Podcast

Scott Chiavetta, chief information officer for Alliance Laundry Systems, examines leveraging equipment and data-gathering systems to boost store operations and build customer relationships.

Want more? Visit the archive »

Digital Edition

Latest Classifieds