CHICAGO — Many elements contribute to the success of a self-service laundry but it’s hard to ignore the impact that the equipment mix has on a business. While there may be no universal formula, putting together and maintaining the ideal equipment mix will go a long way in ensuring that your laundromat is reaping the maximum revenue per square foot.
American Coin-Op invited representatives from vended laundry equipment manufacturers to answer some questions about assessing washer and dryer choices and what stands to be gained by offering customers what they want in capacity and capability.
Q: What factors are generally used in determining a store’s equipment mix? And should an investor or store owner seek help when trying to make this decision?
Kevin Hietpas, Director of Sales, Dexter Laundry: The demographics of the expected customer base is a very important factor. If the location caters to customers with large families, it will need more large-capacity equipment. If there are lot of 1-2 person households, more smaller-capacity equipment will be OK.
The size of the location is also a determining factor. A small store with too many capacity choices generally doesn’t work well, and likewise a large location with only a few capacity choices doesn’t work well, either.
Getting advice on equipment mix and layout is never a bad idea. Our industry is constantly evolving with new equipment-capacity options, as well as new control features and capabilities. Owners should take whatever input they get and use it to put together the best experience they can for their customers.
Joel Jorgensen, Vice President of Sales for Girbau North America: I’d always seek qualified help. Let’s face it, we go online for help with a restaurant decision. If you’re going to make a multi-thousand-dollar, long-term decision, it only makes sense for professional consultation with a qualified distributor with a proven track record. By all means, they’ve got to have strong references.
As for factors, we always start with a market demographic analysis. … Most distributors and many, if not all, manufacturers … all offer demographic services, and they’re all high-level analyses that don’t just include population. It also includes traffic count, sometimes a competitive analysis, and it’s all out there, publicly available for you.
Once the market analysis is done, you’re going to dig into the overall market valuation and see how you might rank in that market of competition, and then start analyzing square footage and what you have space for. All of that comes into an overall possibility of what volume of business you might do in that neighborhood or market area.
You combine that with some reasonable assumptions about market share and potential revenue and then what’s done with your professional consultant is you’ll come up with a conservative pro forma to look at what impact the equipment mix might have and then start moving forward in store design.
From there, square footage and the dimensions of the space is super important. … Stores that are 2,500 or 3,500 square feet are more the norm. There are more capacity options and, more importantly, vend values.
Matt Conn, Director of Product Development and Marketing, Commercial Laundry at Whirlpool Corporation: Knowing your customers is a key factor in equipment mix, and our distributors work hard to uncover and know the areas they serve. That means demographic details of the area, research into other laundromats and customer habits, and an understanding of the area’s growth potential. With this knowledge in hand, distributors can advise on where multi-load or single-load equipment makes the most sense, what capacities are going to have the most potential for use and profit return, and where potential utility savings can impact other costs. Consider warmer climates and a laundromat’s cooling costs. Equipment mix could be a conversation that includes a complete picture of electric expenses and even dryer heat outputs to find the right machines and models to potentially impact all of the business, not just the profit potential from each machine.
Our customers may also be considering newer options like card readers or variable pricing features and a distributor can advise on when or where those solutions can work best.
Another reason your distributor can be helpful in determining mix is their relationship with the manufacturer and financing partners. Understanding the full profit potential of your plan can impact pricing packages or help a financier see where the capital investment lies and how ROI might be realized.
Jason Fleck, Lead Sales Development Manager, Alliance Laundry Systems: Don’t do this alone. Seek out a distributor with experience laying out stores and lean on them to get things started. Tour successful stores for ideas and interview successful store owners for their advice/regrets. Understand your demographics and competition.
Q: It seems like self-service laundries that have the space are offering larger-capacity equipment, some so large that a customer could conceivably wash all of their laundry in one machine. How does this growing interest in larger capacities influence vended equipment mix?
Jorgensen: Some operators with unique foresight have been putting large-capacity equipment in their stores for years. In fact, well before some manufacturers even made vending options available on them, these store owners and distributors would fit a vending device from some other machine or a payment system onto on-premise machines. … We finally, as manufacturers, caught up and said, ‘Wow, there is a market appeal for this.’ We’ve been pushing this because it really comes down to income per square foot. … It’s large-capacity stacks. You certainly have a lot of single-pocket dryers with reversing, so you’re inviting those big, bulky loads that the competition or nearby apartment buildings just can’t process.
Conn: While large-capacity machines may tempt consumers with the potential for one load of laundry instead of many, they may also be priced to reflect their capacity in terms of water and electricity use and the owner’s perceived value of the machine. One large load of regular laundry may not be an affordable option when, instead, a customer could use new machines that offer advanced spin technology, removing more water from clothes, potentially reducing dry time.
Additionally, large-capacity machines also have a larger footprint, taking up essential real estate. In some stores, this could be an important decision and requires a deep understanding of the customer base to know that large loads will predominate the business because there’s less room for a mix of smaller machines.
Fleck: This type of concept is popular in markets like Chicago where we see 100 pounds-plus equipment in stores. This niche is attractive to customers who wouldn’t normally use a laundromat and just want to get a large amount of laundry done with the least of amount of effort.
Hietpas: Today’s modern laundries are just like any other retail business; the name of the game is revenue per square foot, and the simple fact is that larger-capacity equipment commands higher vend prices and generates more revenue for the owner. Big machines are “business builders” that attract customers needing to wash items that can’t be washed at home. They also offer traditional customers the convenience of doing multiple loads all at one time. These are conveniences that customers want, and they are willing to pay for.
Laundry habits also change with age and living situation. One of my co-workers has a daughter who lives in a major city on the West Coast. She’s a 23-year-old working professional who does laundry every 12-14 days, based on her days off. Her apartment complex only has a few small machines. She does not have the time to wait and process multiple loads taking up most of her days off. She uses a local coin laundry because she can wash big loads. Her preference is 40-pound and 60-pound washers and 50-pound stack dryers. Her sorting is simple: one load “lights,” one load “darks,” fabric type doesn’t matter, everything gets mixed. Get in, get done, get out. She wants her time back.
Check back Tuesday, July 20th, for Part 3: balancing wash and dry capacity, and the influences of technology
If you missed Part 1, you can read it HERE.