GLENDALE, Ariz. — Correctly pricing your laundromat’s washers and dryers can have big implications for your success.
If you price them too low, you’ll have lower margins with too much volume, causing your equipment wear out faster. If you price too high, you may not get enough volume to support your mat. So what’s the best strategy?
I began offering some pricing pointers in Part 1 and Part 2. Let’s conclude:
WHEN FACING NEW COMPETITION (CONTINUED)
Drop Prices on Group of Washers — I believe this is an acceptable strategy. You choose a group of washers and put them on sale. Small washers would allow you to advertise a low, eye-catching price. I did that while also making them “cold water only” to lower my costs more. You could also cut a rinse, if you choose. The main thing is to be able to advertise a genuinely low price to get folks in the door, yet won’t cost you an arm and leg.
“Larry’s E-Cycles” — With more than 50 years of experience, Michigan’s Larry Adamski recently retired from laundromat ownership. He priced his mat accordingly to make a healthy profit, and did very well with his “dollar coin only” strategy for years.
When a brand-new competitor opened near him, Adamski came up with a pricing strategy so effective that the newcomer closed down and never came back. What did he do?
Since Adamski’s washers were programmable, he offered a no-frills type of wash cycle that he cleverly dubbed “E-Cycles.” Instead of a cycle with a pre-soak and three rinses, with spins in between, his 20-minute E-Cycle offered a wash, a rinse and a spin at a nicely discounted price. This saved him money on water and electricity, plus the shorter cycle time gave his store more throughput.
People came in looking for the special “E-Cycle” and then could choose to upgrade the machine to a more comprehensive cycle for another dollar coin per upgrade.
Apart from your self-service pricing, there are some strategies for pricing drop-off wash/dry/fold service.
Drop-off customers, on average, tend to have more disposable income. They can afford the luxury of having someone else do their laundry for them. I found that drop-off customers were more concerned with quality and good service than price.
We operated what I considered to be a high-end drop-off service and were charging as much as 50% more than our competitors. Still, everyone wants a deal, so how could we appeal to them?
The service demand on the weekends was very high and we had a lot of trouble getting the work out. What’s more, it was harder to get good help to work on weekends.
So, I raised the per-pound price overall but discounted it by 10% Monday through Friday. Early on, I found that the 10% wasn’t enough incentive to move customers to drop off during the week, so I pushed it to 20%.
In a short time, we were bombarded with Friday drop-offs, so we had to limit the 20% off to Monday-Thursday, and that worked out well. I kept that deal in place for years until I sold my mats.
Most of the work was coming in during the week, which was much more manageable. Amazingly, we still got a lot of work on the weekends, but at least it was easier to get done without interfering with our self-service customers.
In essence, we empowered the customer with a way to save money, if they so desired.
Another drop-off deal is to offer free nylon bags. The word “free” is powerful in advertising. Since we printed our own nylon bags at a low cost, I sometimes offered the special of a free nylon bag with any drop-off order over 25 pounds.
Lastly, we’d offer to process comforters at a sale price to lure in people who wouldn’t normally drop off laundry (as well as our regular customers). It was our hope that we could convert some to full drop-off customers, and we were successful with a small percentage.
Best of luck as you try to determine the pricing and promotions that’ll produce for you.
Miss earlier parts of this article? You can them here: Part 1 - Part 2
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].