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 owners approach the task, American Coin-Op interviewed 10 of them from around the country and serving differing customer bases. Here’s more of what they had to say.
PRICING DECISIONS DEEMED SUCCESSFUL?
Thinking back to the pricing decisions they’ve made while running their laundry businesses, the store owners recalled the ones they deemed successful.
“We like to price our larger machines slightly below our medium ones, and our mediums slightly below our small ones, on a per-pound basis,” says Dave Menz, who owns and operates the Queen City Laundry chain of four full-service centers in the Cincinnati area. “This incentivizes [customers] with large amounts of laundry to combine them in larger machines. This saves them money, is more profitable for us, and saves the smaller machines for those with smaller loads. Everyone wins!”
“Moving to full-cycle dry pricing structure has been, by far, the most profitable pricing decision I have made,” says Sharon Sager of her Sierra Madre (Calif.) Laundry. “But in terms of regular price increases on washers/dryers, I try to avoid ‘sticker shock’ for my customers. One approach is to raise prices on just one aisle or one size of machine at a time, instead of doing the entire store at once.”
She also likes taking advantage of “temperature pricing.”
“When I started this approach, I set each temperature on the machines to increase in 25-cent increments. Now, when I change prices, I do the entire store at once, but the advantage with this method is that I don’t have to raise all the cycle prices at the same time. Instead, I can choose to raise only, say, the cold water on all the equipment. Then later, I can increase the warm-water price.”
“This is a difficult question to answer,” says James Radovic, who owns Jupiter (Fla.) Laundry. “We price based on our business model to show profitability for the long run. The fact we make a decision to increase prices and then experience a sales increase shows it must have been a reasonable decision. Now the pressure is on keeping costs under control and employees busy and motivated to improve their work efforts.”
“Our most successful pricing decisions are the ones that encourage customers to utilize our [store’s] downtime or less busy times,” says Kristyn Van Ostern, who co-owns Manchester, New Hampshire’s Wash Street laundromat.
“You price your product appropriately to maintain profitability,” states Jan Barlow, whose Jan’s Professional Dry Cleaners in Clio, Michigan, includes an on-site laundromat.
“At one store, I have dryers priced at 8 minutes for a dollar, or 10 minutes for a dollar if you buy $4 of drying, also known as full cycle,” Patrick Dreis, who owns three Southern California laundromats and a commercial plant, explains. “At another store, I give a little more time if [customers] use the bottom dryers vs. the tops on stacked 30-pound machines. At that store, I’ve changed the usage considerably from top units to the bottoms; I’m trying to even out the wear on the machines.
“I get two dollar coins for 45 minutes on the bottom dryers vs. four quarters gets you 16 minutes on the top units. I’m amazed how the pricing changed the usage pattern at that store.”
“Because my staff is also using the washers/dryers for wash-dry-fold laundry and we have limited capacity, maintaining higher prices brings us the same revenue without having to serve as many self-serve customers,” says Todd Ofsink, of New York City-based Todd Layne Cleaners & Laundromat.
DIFFERENCES IN WASH-DRY-FOLD PRICING STRATEGY?
Given that self-service customers gain access to laundry equipment for their use while wash-dry-fold (WDF) customers are having their clothes washed, dried, folded and possibly delivered to them, it makes sense that the two are priced differently.
For example, Barlow’s business charges at least 50% more for WDF: “We are figuring metrics. At this point, it’s by the pound, $2.35 to $4.50 depending on the items or products we process.”
“We raise prices as the costs of those services increase,” says Van Ostern. “For example, gas prices might not move in correlation with labor or utility prices, so we may need to change our delivery wash-and-fold prices separately from our coin-op pricing. We also have very different competitive sets within the two services.
“We have fewer competitors in the pickup and delivery service, so we can adjust prices more quickly there. Finally, our wash-and-fold pickup and delivery customers are much less price-sensitive, making pricing changes easier.”
“[The fluff-and-fold software I use makes] it pretty easy to adjust prices,” Dreis says. “I’m raising them every six months or so.
“I do most of our FnF work at a dedicated facility, and that’s not a self-serve laundromat. It’s much more dependent on labor costs. At our full-service plant, we produce more value-added product than a typical laundromat. I treat them as different but complementary businesses.”
“We do a lot of drop-off and pickup and delivery and find customers will pay significantly more for this level of service, as it saves them their time and labor,” Menz says. “In fact, we see our self-service, drop-off and pickup and delivery services as the ability to offer a ‘good, better, best’ pricing and service model. We have some customers that migrate between services as needed but this also gives us the ability to serve nearly every person in our community.”
Coming up in Thursday’s conclusion: More on WDF pricing differences, and some closing thoughts from the store owners
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].
