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. You’ll have more out-of-order machines, harder upkeep, conflicts between customers competing for available equipment, and a generally declining mat condition due to bumps, scratches, dings, etc.
If you price too high, you may not get enough volume to support your mat.
So what’s the best strategy?
There is a sweet spot that can be determined by studying your competitors’ pricing in relation to condition of their mats. If your mat is in better overall condition than those of your competitors, you can afford to price higher. If not, you must either fix up your mat (best choice) or price lower.
If you run a 5-star mat—a clean, beautiful store with well-running equipment that looks mostly new—pricing becomes less of an issue. The quality of your mat is head and shoulders above your competition, therefore people are attracted to your mat by its attributes much more than its vend prices.
Since people prefer a mat with new equipment, a basic rule of thumb is to keep your mat looking like it was just built. You’ll be able to command higher vend prices and discourage new competitors to some degree.
SOME PRICING POINTERS
Start with Comfortable Prices — It’s important that your mat is properly priced to make a decent profit to begin with. You must charge prices that are healthy enough for you to absorb some cost increases throughout the year.
Additionally, you want to have some leeway in case the need to cut prices comes up. At the same time, you don’t want to be so greedy with charging prices that are too high, lest you invite competition.
I like to see pricing set to produce a margin of 25% net earnings from gross, if not more.
Run Sales and Promotions — Once your basic pricing leaves you a comfortable margin, you have some breathing room to run specials.
I ran them all the time: 2 for 1; cold water only; time of day; day of week; etc. I even had a half-price special whenever it snowed!
I would rotate my promos to keep my mat fresh, since each special can appeal to a different slice of the population.
Running promos from time to time does two things. First, you keep your mat fresh in the customer’s eyes, as promotions can draw different demographics. Second, your mat will end up in the public’s long-term memory as the one that “always has a sale.” When someone’s home washer breaks down, they’ll think of you first.
Make Promos Specific — Don’t just lower all your wash or dry prices. Doing that may pull customers in but it will narrow your margins and could trigger price wars. In my mind, it’s better to have most of your equipment reasonably priced and then run deals on a group of washers or a part of a cycle.
Discounts for Seniors — This was one of my favorites. Discounts for certain groups on your slowest days can help round out the peaks and valleys of your business. Retired seniors are the No. 1 group because they can visit anytime.
Change Things Up from Time to Time — After you’ve run a special for several weeks or longer, switch to a new special to keep things fresh, and use new signs featuring different colors to advertise them. If you had a white sign with red letters for a special, post a yellow sign with black letters for the next one to catch more eyeballs. The next time, you may want to use fluorescent pink, and so forth. The same goes for your online ads.
Check back Tuesday for more pricing pointers!
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].