RIPON, Wis. — Providing a clean, safe store with reliable, working machines in the right location is the foundation of a successful coin laundry business.
Unfortunately, these basics aren’t always enough to differentiate your store from competitors who offer the same.
“The only way to be successful is to do what other stores aren’t doing,” says Oliver Lay, owner of Connecticut-based Wash Works. “All Laundromats offer washers and dryers, so you have to provide services that get customers to travel across town to go to your store.”
This is where ancillary services, or extra-profit centers, can play a key role in getting customers in the door, while providing additional sources of revenue.
With numerous options, it’s important to carefully choose what services will work in your store, while also keeping in mind that trial and error may be necessary.
If you’re in the position to add services, consider the following extra-profit centers—those that are Laundromat mainstays, those that are up-and-coming, as well as a few that may be losing their effectiveness.
TRIED AND TRUE
According to the 2014 Coin Laundry Association Industry Survey, 60% of store owners offer wash-dry-fold.
This high popularity is for good reason, according to Peter Limoncelli, chief operating officer of Yankee Equipment, a Speed Queen® distributor based in Barrington, N.H.
“Wash-dry-fold and drop-off services have been around for more than 25 years, and I don’t see them going away anytime soon,” Limoncelli explains. “They’re especially easy to justify in a store that’s already attended, because a store owner can often avoid the added cost of hiring extra personnel.”
Chris Balestracci is president of Super Wash Laundry based in East Haven, Conn. The store offers wash-dry-fold for $1.15 per pound, plus flat rates for other items such as comforters.
“Our customers definitely appreciate the time we save them,” he says. “They know paying a little extra is worth it if it means more time to do the things they want to do.”
Taking on commercial accounts is a complementary service to wash-dry-fold. This can be a huge source of revenue, but store owners should first ensure their infrastructure can meet the added volume.
“A store owner may need to invest in new equipment, employees or even linens to take on commercial accounts, but the added business can definitely pay off,” Limoncelli says.
He estimates 20% of his customers offer commercial laundry services.
Another profit center that’s relatively simple to incorporate is the sale of vended products. While customers enjoy the convenience of purchasing detergents or fabric softeners where they do their laundry, store owners make a profit.
For store owners considering offering vended products, both machines and over-the-counter sales have their pros and cons.
For example, Balestracci prefers the built-in inventory control of vending machines, while eliminating the need for an employee to man a counter.
Alternatively, over-the-counter sales can be advantageous because they allow store owners to offer larger or unique products, such as full-size detergents or laundry bags.
“Regardless of how they’re sold, more and more customers are choosing to purchase detergents at the Laundromat over the supermarket or other venue,” says Limoncelli.
NOW TRENDING
Adrian Najera Jr., owner of Mi Lavanderia (My Laundromat) in Illinois, has experimented with vended products since his store opened five years ago—from refreshments, to detergents, to laundry detergent buckets, to something more unique: international calling cards.
With the success of calling cards, he and his mother extended their offerings a year and a half ago to become a certified cell phone retailer. They dedicate a small corner of the store to a kiosk.
“By knowing our demographic, we knew it was important to partner with a provider that offered plans tailored to international calls,” he explains. “We’re located in a low-income market with many immigrant customers, so we were confident this service would be successful while filling a need in the community.”
According to Najera, 10% of foot traffic today is for cell phones only—business that did not exist prior.
“The goal is to become a one-stop shop,” says Najera, who is also in the process of soon offering wire transfer services. “My vision is that customers will come in to do laundry, wire money, and buy minutes for their phones in one trip.”
So what’s the draw of a service that requires a bit more hands-on work and expertise than others? Both Lay and Limoncelli say profit per square foot.
“A check cashing service can bring in millions in added sales per year, in just an 8-foot by 10-foot space,” says Lay. “It can be the difference between making a store competitive or not.”
He adds that lottery sales are also a service to consider, but it may not be successful in all stores, depending on demographics.
He knows from experience, as it’s worked well in three of the four stores he’s attempted to offer the service. If a store owner wants to avoid the process of becoming licensed to provide such services, an alternative is outsourcing to a vendor that is qualified.
“I have a customer who rents out a 24-square-foot booth to a licensed Western Union dealer, meanwhile bringing in thousands of dollars per month in rent and getting more customers in the door,” says Limoncelli.
Check back Monday for the conclusion!
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].