PEMBROKE, Mass. — About 60% of Laundromats offer some version of wash-dry-fold (WDF) service. I notice that there is a stickiness to raising prices.
“I’ve been charging $1.10 a pound for four years, and I think my customers are stuck at that price,” one Laundromat operator tells me. “They wouldn’t put up with an increase.”
Another says, “We charge $1.25 a pound, and I think that’s too much. Five years ago, we were charging 80 cents a pound.”
Certainly, maintaining a price is easy, comfortable and accommodating, but no price is ever fixed. Always, there are variables that encourage price increases.
To give an out-of-the-industry but personal example, I wrote a small book, Bee Lessons, about my hobby, beekeeping. We initially priced it at $3.50. It’s a small tome, 4.5 by 5.5 inches and 56 pages. With the second printing, I upped the price to $3.75; it was an agonizing decision, as I wondered if people would continue to buy it. The third printing was priced $4.25. Now, the same book is priced $4.90, and I still sell 2,000 copies a year.
All the worry was needless. Looking back, I increased the book price by 40% (from $3.50 to $4.90) without denting demand. The customer wants the book and will pay the going price. To date, I’ve sold 38,000 copies.
Although your main concern is not what others are doing, check around your marketing region to find out what others charge for WDF. You might be surprised. If you think your price is the highest, you might discover that someone else charges more. If you think you are the lowest, you might discover that someone else is even lower. This exercise will give you a market range.
Depending on your area, you might be surprised to learn that the $1-per-pound price is no longer the industry standard. That barrier has been broken in the last few years.
Using a map of your general region (including several towns), put a dot by each store alongside its prices. If there is a store with an extremely low or extremely high price, note the explanation (if there is one) in pencil alongside the dot. Scan the market for trends, movements, whatever. It could just be that you can’t make any sense out of the pricing. But that’s not a problem.
Then, see how your WDF volume interacts with your walk-in business. If they interweave smoothly with minimum disruption, that’s good. If there is a lot of issues in getting the WDF done on time, because of machine usage, then that’s another consideration. If you can comfortably handle more volume, then that’s a price-increase opportunity.
Next, evaluate your costs, relatable to WDF. Labor is the first and largest cost. But allocated utilities, supplies, delivery and promotion also enter into the equation. Have the costs gone up in the last few years? By how much: 3%, 5%, 10%? Or have they gone down? (Which might occur if your WDF is growing.) Have they remained flat? Have you had to spend a lot of management time recruiting and training assistants? That enters the equation, too.
Next, has WDF volume grown in the past few years? If yes, that means that your service is most desirable. People would rather give you the job of doing laundry than doing it themselves. If no, is there a reason—lack of space, poor staffing, overcrowded market—why the segment hasn’t expanded? If WDF is growing, that’s a strong statement for increasing prices.
Finally, what’s the tenor of the economy in your area? If the economy is good, that’s a positive. But if your market is in a general economic downturn, that’s another matter. Of course, you service the lower-income population, but even they benefit in a rising economy.
Check back Tuesday for the conclusion, including deciding on a new price and how best to inform customers of a change.