Finding a Quality Drycleaner and Negotiating a Favorable Arrangement Are Critical to the Growth of Your Business
I’ve recently received a flurry of calls from laundry owners who offer home delivery of their wash-dry-fold product and are now looking to expand that service into drycleaning as well.
Of course, finding the right drycleaning partner that will ensure your business’ growth and perhaps secure some additional efficiency within the wash-dry-fold segment of your operation is critical.
So, how do you find the right partner?
First of all, it’s important to realize that the company you choose likely won’t be your partner for the life of your business. Personally, I’ve had five drycleaning partners over the years. And, more than likely, as your business grows, you will outgrow your first drycleaner, challenging their abilities to perform to your standards.
Another key point to understand is that the more your business grows, the more powerful you are to a drycleaner. When your drycleaning business is worth $10,000 to $20,000 a month in wholesale work, that drycleaner can’t afford to lose you. However, when you’re just starting out and your business is worth close to nothing, you’re more of a hassle to a drycleaner than anything else.
Fortunately for laundry owners looking for drycleaning partners, the drycleaning industry has slowed down significantly over the last decade. Although several drycleaners have gone out of business, among the ones that are left, many might not have their plants fully utilized and they might be looking for some additional business. Also, when seeking a partner, obviously look at drycleaners that don’t offer pickup and delivery.
After finding a few suitable candidates, set up times to visit their facilities. When calling on a potential drycleaning partner, be prepared for this common argument from them: “Why would I do work for you if you’re going to be doing this in my neighborhood and taking away my customers?”
To this, your response should be along these lines: “Somebody else is probably already taking away your customers, because you don’t offer home pickup and delivery. All I’m doing is giving you an opportunity to compete in this market, and to grow your business by offering pickup and delivery, along with my full-service wash-dry-fold program.”
A great bargaining chip during negotiations is to offer to do their wash-dry-fold laundry for them. As we all know, that’s a growing part of the cleaning industry, and many drycleaners are pursuing that business. So, why not offer to be a wholesaler for them, while they are a wholesaler for you?
What else do you need to consider?
There are a lot of different ways to negotiate your relationship with a drycleaner – simply because there are a lot of different places where you can step into their process.
For instance, you may want to simply bring the drycleaner bags of clothes with a name on it and let them handle it from there. Then again, you may want to take on part of that work by actually invoicing the customer yourself, inventorying the garments and tagging them, and/or bringing it to drycleaner prepped and ready to process.
You could even go so far as to pre-sort the garments – what’s laundered and pressed, and what’s drycleaned. You can even sort the shirts by starch level.
A critical and time-consuming part of the drycleaning process is making sure all shirts are unbuttoned. A lot of customers don’t unbutton all of their shirt buttons, and that must be done before those garments get wet or else it becomes considerably more difficult for the pressers. It slows down that manufacturing process. This is something you could do on your end.
And, by you taking on part of that prep work, it becomes something you can negotiate with the drycleaner. For example, it may take the drycleaner up to a minute to unbutton shirt buttons, and that will be budgeted into the labor cost; perhaps they’re looking at producing 100 pieces per hour, but the unbuttoning process will drop one employee’s production rate to 60 pieces an hour.
The less the drycleaner touches a garment and the more time you do the more leverage you have during your negotiations. What’s more, it also gives you more control over the quality of the finished product.
If you’re doing the assembling and bagging, you get to perform the final inspection to ensure that the quality is up to your standards and that all the pieces are accounted for. You’re seeing each garment. You’re inspecting it, and you’re guaranteeing that a certain level of quality is going back to the customer. And, once again, the more that you touch those garments, the more you can negotiate in your favor.
Is it as profitable as just tossing the garments in the bag, negotiating a 50 percent split with the drycleaner and letting them handle everything? That’s your decision – knowing that the more you handle the items the more it costs you as well.
Some drycleaners will want to simply quote you their prices and give you a percentage discount. But, in my mind, it’s superior to have them provide you a price per garment.
Clearly, you don’t want charge your drycleaning customers the same prices your drycleaner partner charges, because you’re offering the convenience of pickup and delivery. You need to be able to charge more for that service.
In my mind, you need to be able to bring a price to the market that provides you at least a 50 percent profit margin – and potentially more. Otherwise, that margin can get eaten up very quickly by pickup and delivery costs, carrying costs, percentages of credit card fees and so on.
Another huge, often-overlooked cost you’ll face if you’re going to be successful is marketing. In some models, the cost to acquire new business is as high as $100 per customer.
If it’s the right customer, you’ll make up that $100 pretty quickly. At my store, for example, we have drycleaning customers who spend $300 or $400 a month with us. If you land a bunch of those customers, $100 isn’t that big of a deal. Then again, if you have a customer who is spending only $10 or $20 a month, it will take a while to recoup your marketing investment. Therefore, marketing costs are just another factor to keep in mind when dealing with a potential drycleaning partner.
You must discuss all of these issues with the drycleaner before you agree to team up, because those are the costs they would be spending, which you’re now agreeing to incur.
Above all, if you’re offering a drycleaning service with a quality drycleaner, it becomes a lot easier to sell your wash-dry-fold program, because your customers now view your business as a one-stop shop for all of their garment needs. If you can be their one and only stop, you’ll have a much stronger chance of dominating the home delivery business in your market.
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