CHICAGO — In the competitive landscape of laundromats, pricing services is a critical art that goes beyond setting a simple rate per load. For laundromat owners, each pricing decision—from wash-and-fold services to premium detergent options—can have a ripple effect on operations and financial health.
It’s about mastering the balance between cost, convenience, and customer satisfaction, and how it can elevate a laundry business to new heights.
To get a sense of how today’s self-service laundry owners approach the task, American Coin-Op interviewed 10 of them from around the country and serving differing customer bases. Here’s what they had to say.
THE NO. 1 REASON IS…
Several of the owners interviewed for this article say their top reason for raising their vend prices is to counter rising costs.
“My No. 1 reason to raise prices is because my costs have increased,” says Patrick Dreis, who owns three Southern California laundromats and a commercial plant where his staff processes fluff-and-fold orders.
“Overall, I try for 4%,” states Jan Barlow, whose Jan’s Professional Dry Cleaners in Clio, Michigan, includes an on-site laundromat. “I have (a) dry cleaner as well a laundromat so for someone who owns just a laundromat, that may be a different metric.”
“We generally raise prices in order to keep up with our cost of doing business and factor in things like rent increases and also increases in electricity, gas and water costs,” says Todd Ofsink, whose New York-based Todd Layne Cleaners & Laundromat offers WDF pickup and delivery service throughout Manhattan.
Offsetting increasing costs related to utilities, supplies, labor, maintenance and other areas is why Sharon Sager raises prices at her Sierra Madre (Calif.) Laundry. The same goes for Kristyn Van Ostern and the Wash Street laundromat she co-owns with a partner in Manchester, New Hampshire.
For Dave Menz, who owns and operates the Queen City Laundry chain of four full-service centers in the Cincinnati area, the goal is always to keep margins above a certain level.
“This allows us to run our business at a high level, while continuously investing back into the business,” he says. “When costs increase, we raise prices to maintain those numbers. We are always conscious of the fact that our overall value proposition in the market must be commensurate with our prices as well.”
“The only reason we raise prices is to ensure we have a profitable business plan to allow us to stay in business,” says James Radovic, who owns Jupiter (Fla.) Laundry. “We hope the increased revenue will be better than the loss of customer support because of the increased price. This is always a gamble.”
Travis Unema, who owns Brio Laundry in Bellingham, Washington, believes in scheduling times to price-adjust twice a year.
“Increase (them) to maintain healthy profit margin on all machines,” he adds. “If you fall behind raising prices, it is harder to make larger price jumps. Increasing in smaller amounts spread over time is more manageable and won’t have that shock value.”
“Our in-store manager conducts quarterly surveys of our direct competition, recording information on pricing primarily, but also noting the cleanliness, amenities, and hours of each laundromat,” explains Kelly Castillo. With a partner, she operates Bubbles Laundry Service, a self-service laundry featuring on-demand WDF pickup and delivery based in Anaheim, California.
“We review it at a management level and decide if we need to implement any changes to our pricing strategy, hours, etc. at that time. So prices for each size of machine are evaluated, at minimum, four times per year.”
“Our first obligation is to remain open for our customers that we have made a commitment to,” says James (Clark) Sowers, who co-owns four laundromats and two drycleaning plants in South Dakota with son Randy. “We need to compensate employees who provide the service for our customers. We need to pay our bills. We need to provide a safe, clean area of doing business for our customers. I’m not in business to be the cheapest provider of these services, I’m in business to be the best provider.”
WHAT ABOUT THE COMPETITION?
Some of the owners interviewed factor their competitors’ pricing into their own pricing to varying degrees. A few say they pay no attention at all.
“There are three other laundromats within a one-block radius of our location and many more within a one-mile radius,” Castillo says. “Competition is heavy but there is enough business to support everyone. … We never seek to be the least expensive but do like to stay competitive.”
“Never, to rarely,” Barlow says of competitors influencing her own pricing. “I depend on journals like yours to provide some guidance. If I see something I didn’t consider about industry averages, I am prompted to take a serious look at what I am missing. Always need to be ready to pivot and learn something!”
“Sometimes. I always research what the competition is charging, but their prices don't define my prices,” Sager reflects. “When determining vending machine product prices, I track my cost for the products I sell and make changes as product costs rise.”
“While we keep an eye on our local competition, we set our prices to be profitable regardless of our competitors’ prices,” asserts Radovic.
“We always check our competitors’ prices before implementing a price change,” Van Ostern says.
“Never! They have different (percentage) profit margins based upon equipment, lease, services, [store is] attended and the list goes on!” proclaims Unema. “I try to stay focused on ensuring the profitability of what I am selling.”
“I do look at my competitors often,” says Dreis. “Not only their vend prices but their whole operation as it compares to mine. I set my prices based on my costs, not my competition’s prices.”
“Our competitor’s prices rarely weigh into the cost that we charge for customers that are doing their own laundry,” says Ofsink. “This is primarily due to the fact that we are located in New York City and people are not driving. We are in a good location with lots of foot traffic.”
“Sometimes, because I don’t believe anyone provides better service than we do,” asserts Sowers. “I don’t appreciate someone piggybacking on our pricing but not our quality.”
“At this point, we’ve separated ourselves from our competitors to such a high level that their prices are really not a factor at all,” Menz reports. “In many cases, we are 100-200% higher than them for certain machine sizes.”
In Part 2 coming Thursday: Alerting customers to pricing changes, and the pricing promotions customers favor most
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].
