A Look at Some of the Various Laundry PUD Business Models
John MacKrell likes to quote the following statistic: doing laundry is the second-most-disliked chore in the United States – behind cleaning toilets.
Although we don’t know exactly what this tidbit means for those involved in the house cleaning industry, we do know how it has impacted the full-service laundry business – first, with the popularity of wash-dry-fold services… and, more recently, with the growth of pickup and delivery.
“The PUD industry is in its infancy,” said MacKrell, founder and CEO of HappyNest, a PUD marketing and management platform focused on customer acquisition and partnering with laundromats to handle processing and delivery. “We’re still in the first inning of this game. We envision that laundry pickup and delivery will be as commonplace as meal delivery, and it will become more of a utility and less of a luxury over time. In fact, in a recent survey of 1,000 people, more than half of the respondents are now spending more on home services than they were just two to three years ago.”
And not only is PUD proving to be a viable niche within laundromats, but it’s also taking a variety of shapes, based upon the specific entrepreneur.
“Pickup and delivery is not self-service laundry,” stressed Mark Vlaskamp of 2ULaundry, a PUD operation serving customers in Atlanta; Austin, Texas; Charlotte, N.C.; and Houston. “It’s a much higher-touch, higher-management service. There’s nothing absentee about it.
“In a room full of laundromat owners, that might sound awful. But it’s important to understand that, in a different room full of different entrepreneurs, it doesn’t sound so awful.”
And those new entrepreneurs are finding various ways to get into the laundry business.
With that said, Vlaskamp laid out some basic assumptions:
- Self-service laundry and pickup-and-delivery laundry are different businesses.
- Different entrepreneurs can choose to like different businesses.
- Both are viable business models with many different nuances.
“What we’re doing on the delivery side is incredibly complicated, and it’s incredibly personal to our customers,” Vlaskamp noted. “In business, there are no bonus points for difficulty, but we still chose something incredibly difficult.”
Because of this, PUD is attracting a fundamentally different type of entrepreneur than the traditional, self-service, perhaps semi-absentee store owner of the past.
“And that’s OK,” Vlaskamp stated. “But we all need to admit that it’s different.”
Given that, here are some of the various business models that are beginning to emerge:
Laundromat Owners Offering WDF/PUD
“To me, this is an exercise in maximizing your utilization,” Vlaskamp said. “The bank note and the rent are the same, so why not squeeze more out of it? However, there is a bell curve involved. Too much delivery can cannibalize your retail laundromat experience. Heed caution when reaching the top of that bell curve. Don’t lose track of your self-service business while chasing PUD.”
Laundromat owners who do pickup and delivery have a major advantage over those PUD operators without a store, according to Matt Simmons of Curbside Laundries, which offers a WDF and delivery management platform with integration for outsourcing the delivery.
“Businesses with brick-and-mortar locations tend to rank better online than those without a physical location, and higher ranking on search engines help to attract new customers,” he said. “Overall, laundromat owners often have better business acumen than individuals who want to get into pickup and delivery only. They know how to start a business, they understand that a business takes time to grow, and they can make money on their self-service and drop-off segments while their pickup-and-delivery business is growing.”
Laundromat Owners Leveraging Delivery Services, Such as DoorDash, for PUD
“This is a great way for laundromat owners to dip their toes into the PUD pool,” Vlaskamp said. “It’s low risk and low friction. This is great for the self-service laundromat owner who doesn’t want a fleet, but still wants to have some exposure to pickup and delivery. However, the growth trajectory seems limited by the pricing and route limitations. This model provides more of the self-service laundromat entrepreneur experience.”
Although DoorDash and other delivery services offer convenience and enable store owners to offer PUD without having to purchase vehicles or hire drivers, Simmons, like Vlaskamp, added that there are some disadvantages.
“The per-trip cost for each order is expensive and may be cost-prohibitive to the customer,” Simmons said. “Also, the quality may not be as good as having your own driver representing your brand in the way you prefer. Drivers often get asked questions by the customers, and a ‘gig’ driver won’t be able to answer any customer questions.”
Laundromat Owners with WDF/PUD and Separate Production Facilities
“If you lose track of yourself on the bell curve, you start to realize self-service laundry is really an unnecessary speed bump on your road to becoming a private laundry production facility,” Vlaskamp explained. “This is a trend that I’m seeing more and more often among laundromat owners in my circles. From a corporate side, it’s something we’re toying with as the demand for delivery service grows in our Tier 1 markets.”
Laundromat Owners Offering PUD Services Under a Separate Company’s Brand
The operators, in essence, serve as “production partners.” They may have exclusive territories and generally process much more laundry than an individual “gig” operator.
“The benefit of this model is centralized marketing,” Simmons explained. “The parent company does all of the marketing, and the laundry owner can focus on processing the laundry and picking it up. Possible downsides are that the PUD customer belongs to the brand, your profit margins are lower since there is a revenue split, and the resale value of the business may be less than if you owned the brand.”
Providers with Production Facilities, But No Self-Service Laundromat
“This trend is the most exciting trend in laundry right now,” Vlaskamp said. “Micro-processing plants are popping up that are blends of light commercial and residential. With the rise in popularity of folding machines in this niche, you realize how inefficiently laundromats are set up to run a true commercial shift.”
Drycleaners Adding WDF/PUD to Their Existing Routes
“Drycleaners looking to add WDF run into capacity issues quickly,” Vlaskamp pointed out. “The same way we use drycleaners as third-party providers for our drycleaning, they use us for their WDF. In one of our markets, two of our top three commercial clients are drycleaners.”
Laundry Entrepreneurs Processing Laundry at Home or at Local Laundromats
“They often get paid significantly less than the market rate,” Simmons noted. “Their low prices are helping to raise the awareness to laundry pickup and delivery. In addition, the ‘gig’ economy brands advertise online a lot and have increased overall awareness for PUD services. However, the quality can be intermittent, as it is dependent on the individual gig operator. There can be questions of cleanliness. After all, where exactly is the laundry being done?”
“This is the ‘Rookie of the Year,’ if I’m giving out awards,” Vlaskamp said. “It’s a model I have my eye on. I can’t fully understand the economics of it, but neither could taxi drivers when Uber came around. When everyone on the industry’s online forums agrees that the peer-to-peer model won’t work, I start to worry that our ignorance makes us vulnerable. Whatever business model you choose, don’t sleep on this one. Watch, learn, and don’t get caught like a taxi driver in 2016.”
‘Faces’ in the Crowd
Clearly, the wide variety of ways to pick up, process, and deliver laundry proves that there are several paths to success… and many “faces” of pickup and delivery.
“Lately, we have been receiving a lot of calls from laundry owners who never imagined getting into pickup and delivery,” Simmons said. “They’re getting into it because their customers are asking for it.
“At our laundromat, our drop-off business has decreased by about $5,000 a month over the last two years. However, during the same period, our pickup and delivery has gone up by more than $40,000 per month. If we were strictly offering drop-off wash-dry-fold, our full-service laundry business would be down. Instead, our WDF revenue is higher than ever before – because of pickup and delivery.”
This month, we asked some leading PUD operators about their businesses, the challenges they’ve faced, and where they see this industry segment headed. Each entrepreneur may be handling pickup and delivery a bit differently – but they’re all doing so quite successfully:
Saichelle McNeill
The WashRoom Laundry Service
Charlotte, N.C.
The WashRoom Laundry Service is a full-service mobile laundry and drycleaning delivery service that caters to both residential and commercial clients. We started this business without owning a laundromat or an OPL operation. All we owned were our delivery vehicles.
However, we are in the process of building out a production facility.
We outsource all of the wash-dry-fold and drycleaning work – using one processor for WDF and a separate processor for drycleaning. The wash-dry-fold represents 75 percent of our total volume, with the other 25 percent being drycleaning.
All of our WDF business is pickup and delivery. We are a 100 percent mobile operation. We are not a customer-facing business.
We manage our business through a full-integrated POS system and app software. We utilize a driver app for our delivery drivers. And our clients can use our IOS/Android app or the web to manage their accounts, update payment, and schedule/track pickups and/or deliveries.
Key to Success in WDF/PUD: For us, the keys have been building an awesome team to include our laundry and drycleaning service partners, transparent communication within all of the operating teams, effectively charting out our processes, and investing in technology to manage our fleet of delivery vehicles.
Challenges to Overcome: The major challenge we’ve faced has been competition from national and large regional laundry service providers. However, we’ve managed through this challenge by delivering consistency, quality, and an excellent customer service experience – all of which are highlighted in our company’s marketing. Plus, we have the advantage of being a local provider.
The Future of PUD: I anticipate a scenario where larger central facilities are complemented by a growing network of retail locations, pickup-and-delivery routes, lockers, and various convenient methods for seamless laundry transfer.
The laundry services sector has experienced a notable increase in mergers and acquisitions in recent years. Forward-thinking laundry service providers should be actively considering M&A strategies to amplify their market presence and explore potential opportunities across different markets.
As the expenses associated with drycleaning continue to climb, an increasing number of consumers are opting for alternatives that are both cost-effective and convenient. The popularity of home delivery laundry services is on the rise, presenting a convenient and budget-friendly alternative to traditional drycleaning. Furthermore, the emergence of on-demand laundry services is gaining traction, providing a convenient and economical way for individuals to accomplish their laundry without having to venture outside their homes.
Paul Hansen
Laundry Growth Partners
Chicago
Last year, we moved all of our pickup-and-delivery operations to a separate facility, which has dramatically changed the business. Currently, our drop-off laundry, pickup-and-delivery orders, and commercial accounts make up about 20 percent of this total business.
We treat PUD as a totally separate business now, with its own staff and facility. In fact, due to some large contracts, pickup and delivery represents about 80 percent of our total WDF business.
Key to Success in WDF/PUD: Clearly, there are some major differences between adding wash-dry-fold and establishing a pickup-and-delivery business.
Wash-dry-fold can be a relatively easy add-on to an existing laundromat, especially if the store is already attended. Of course, it will require having a way to track orders and machine starts, which can be as simple as a paper log or as high tech as a fully integrated POS system.
By contrast, pickup and delivery is much more complex, requiring more systems to tracking order from pickup all the way through to delivery. Today’s industry technology has played a huge role in this segment of the business, with so many high-quality platforms now available.
No doubt, with both WDF and PUD, staff training is imperative.
Challenges to Overcome: When it comes to wash-dry-fold, the biggest challenge has been training and monitoring the staff. You have to make sure proper amounts of detergents and other laundry chemicals are being used, as well as the appropriately sized machines. Also, for us, we needed to zero in on the proper balance of time our attendants spent on WDF production, versus cleaning the facility and customer service.
As far as pickup and delivery is concerned, we had a real issue with storage space the laundry orders, as well as the problem of inconveniencing our self-service customers by taking up machines, carts, folding tables, and so on. Our new PUD facility certainly has alleviated these challenges.
The Future of PUD: I see more and more platforms out there now that allow for the use of such “gig” companies as Uber and DoorDash to handle the transportation aspects of PUD, thus eliminating the need for your own drivers and vehicles.
In addition, more well-funded businesses are starting up or expanding nationally. Also, there may be some consolidation, as smaller operators merge or sell after discovering that the business is more than they bargained for.
Mark Csordos
Washing Well Laundromat
Matawan, N.J.
We process our wash-dry-fold at our laundromat. We provide pickup and delivery Monday through Friday, and offer wash-dry-fold seven days a week.
In all, WDF represents approximately 58 percent of our sales.
We have a POS system, which allows customers to sign up online and schedule their pickup and delivery days and times. One of our employees will be scheduled to be the driver that day. Although we prefer our customers to set up everything through our POS system, we make exceptions for seniors and those who many not have access to a computer. These customers can call us up, and we’ll add them to that day’s route.
Currently, pickup and delivery makes up about 15 percent of our overall wash-dry-fold business.
Key to Success in WDF/PUD: I believe the key is managing customer expectations and workflow. Obviously, we can’t control when people bring their clothes in or schedule pickups and deliveries, but we can work with them on when to expect it back.
We start off with an expectation of 24 hours and work from there. If a customer need it back “whenever,” we might schedule it two or three days out, to leave room for those customers with tighter turnaround requirements. And, if the workflow becomes too much, we call in extra employees to help process the wash-dry-fold loads.
Challenges to Overcome: I feel our biggest challenge regarding wash-dry-fold and pickup and delivery has been that the general public doesn’t know these services exist. Many people still believe that laundromats are strictly for those who live in apartments or use them just when their washers or dryers break down. Many still don’t realize that they can leave their laundry on the front porch, and the next day it will reappear clean and folded.
I’ve tried to overcome this by spreading the word to everyone I meet – whether through networking functions, community events, or even chatting with someone in the checkout line at the grocery store. We also market to potential new customers who live near our current PUD customers.
The Future of PUD: I think the sky is the limit for pickup and delivery in the laundry industry. Companies like DoorDash, Uber, and Grubhub have gotten today’s consumers used to having items delivered simply by pressing a few buttons on their phones. Once the public realizes they can get their laundry done by ordering it on their phones as well, nearly everyone who wears clothes becomes a potential customer.
Omer Khan
Skyline Laundromats
Atlanta
All of our wash-dry-fold undergoes processing at our laundromats, and it represents approximately 30 percent of our total business.
We manage our pickup-and-delivery operation from a single location, which enables us to efficiently oversee our inventory, staff, and that entire aspect of the business in one designated, consolidated space.
Key to Success in WDF/PUD: For our drop-off WDF customers, we utilize a single POS system with consistent pricing, detergents, setup, and incentives for our stores’ staff members. This uniform approach has enabled our scalability and the development of a self-sufficient business. Our next step will involve marketing efforts to further elevate this segment of our operation.
Our pickup-and-delivery business is managed through two distinct processes. A third-party provider handles our marketing and customer service, while we handle the front-end work. This division of responsibilities allows us to concentrate on completing the work, while someone else takes care of payments, marketing, customer service, and software-related issues. This streamlined approach lets us focus on the growth of our laundromats, as well as our WDF and PUD operations.
Challenges to Overcome: Of course, challenges are a constant in business. Each day brings new obstacles, and our ability to navigate through them is a continuous learning process.
The competition is ever-expanding, requiring us to remain vigilant. Our upcoming priority is to concentrate on marketing and to brainstorm innovative ideas to capture customer attention. With a dedicated and professional staff efficiently processing laundry orders, we’re now focused on creating incentives and collaborating with local companies to develop marketing materials for distribution to our community’s residents and businesses.
The Future of PUD: Pickup and delivery stands as a significant element for our laundromats – and it’s poised for continuous growth and additional revenue generation. With so many laundromat owners and entrepreneurs entering this segment, competition is increasing steadily.
The contemporary demand for convenience – where consumers seek to alleviate the burden of laundry – has been a long-standing trend in Asian countries for decades. This trend is now gaining momentum in the West. Success in this endeavor will hinge on setting the right price point, targeting the appropriate audience, and delivering a quality product.
Charles Measley
Fluff & Fold Laundry
Rumson, N.J.
Since the beginning, our stores have enjoyed a strong demand for wash-dry-fold services, as well as featuring a solid self-service customer base.
We entered the pickup-and-delivery business out of necessity, because one of our stores at the time was stuck with a horrible lease. And, despite a great self-service customer base, we’ve since grown our wash-dry-fold and delivery business well beyond the revenue generated from self-service alone.
We currently run this operation out of several stores, but we’re in the process of building a dedicated space for our pickup-and-delivery operation.
No doubt, pickup and delivery is an entirely different business than running a self-service laundromat. It’s also completely different than operating a full-service laundry. Scaling a PUD business requires a dedicated, well-trained team with quality management, systems, and procedures. A strong, flexible software program to run the operation plays an important role, along with consistent and effective advertising. And let me stress that you can’t overlook the human element and the key of having a well-trained team.
When we first established our pickup-and-delivery service, it was just a small portion of our business. Today, with a lot of consistent hard work, it’s the major portion of our total business revenue.
Key to Success in WDF/PUD: One key aspect that I think a lot of people don’t realize is the value of having a consistent product. Consumers like consistency, and consistency creates loyal customers.
A software system tailored to the specific way you operate your laundry business plays an important part. Also, pickup and delivery requires professional advertising to maximize customer signups in a cost-effective manner.
Challenges to Overcome: When operators first start out in PUD, they can get fooled. It often can have the appearance of being easier than it actually is, and also boasting a much higher profit margin than it will have once the business gets to scale.
This is because the operator, in essence, is using the “free labor” for which the laundromat is already paying. However, once you get to scale, you really need to focus on your costs. As the business grows, you need to think one step ahead – this includes delivery vehicle purchases, staffing requirements, and even space to operate this growing venture.
The Future of PUD: I believe we’ll see national companies try to use the footprint and infrastructure of existing stores and their owners to grow a network of pickup-and-delivery businesses. I also think envision franchise operations focusing more and more on this laundry segment, because it can generate larger gross revenues.
Janet Penna
Wash Like Home
Elmsford, N.Y.
I’ve got two drivers, two vans, and five laundry processors – and our orders are stored in my garage. Wash Like Home is 100 percent pickup and delivery.
I was looking for a business that I could run after I retired, and my daughter suggested a laundromat.
We had looked at purchasing some existing laundries, but those deals all fell through. So, we decided we would build a laundry, but then the pandemic hit.
A month later, in April 2020, our laundry website was ready, and our POS system was established. So, we simply decided to run a laundry PUD business from home. We just kept doing it and learning, and we grew from there.
No, we still don’t own a laundromat or a processing facility. However, we’ve come to an agreement with a nearby laundromat that allows us to use its equipment for our PUD orders, so that’s what we’ve been doing.
However, our business, which includes my daughter and son, has grown to about 26,000 to 30,000 pounds of laundry per month – so 2024 is definitely going to be the year that we either build or buy a laundromat.
Key to Success in WDF/PUD: They key has been our services. Our business motto is “Doing Laundry the Way You Prefer.”
We use high-end detergents and bleaches. We can offer fragrance-free products, if desired. We will wash garments on delicate settings. Whatever the customer wants. We offer next-day or day-after service.
And we price our service accordingly. We’re the most expensive PUD service in this market. We’re at $2.25 per pound for a 24-hour turnaround, and the average price in this area is $1.25 per pound.
Online reviews also are important. New customers tell us all the time that they saw our great reviews. And we always respond to our reviews – good and bad. Of course, issues are bound to come up in the laundry business. It’s how you handle those customer issues, and that’s my forte.
Challenges to Overcome: A major challenge of pickup and delivery is staffing. These employees are not starting at the top. You need to find people who want to work and who like the industry.
We start employees with separating and then move on to folding. Next, we teach them how to load the machines. And they take pride in moving up each step, contributing more and more with each new skill. You need to find individuals who are invested in you, because you’re invested in them.
Other than that, you must have a great POS system – and we do. You need a system that actually relates to a day-to-day PUD operations, one that’s tailored to the laundry business.
The Future of PUD: I think laundry pickup and delivery is going to be a major player in people’s lives. People don’t want to mow the lawn. They don’t want to clean the house. And they don’t want to do their laundry.
The younger generation is more family-oriented. They want to enjoy their time – attend and participate in their kids’ sports, ballet, recitals, and so on. They want to enjoy their lives. They work hard, and they feel justified in spending extra money on tasks that take them away from spending time with their families and friends.
I get phone calls from people saying, “I’ve never done this before. I can’t believe you’ll come to my house, get my clothes, and then bring them back. That’s wonderful!”
Joe Dan Reed
Splash ’Em Out Laundromat
Lexington, Ky.
Our wash-dry-fold operation is run strictly out of each individual store we own. The process consists of our laundromat attendant taking in the loads, weighing the clothes, and registering each customer into our POS system. Afterward, we simply process the laundry, bag it, store it on a shelf, and wait for the customer to pick it up.
Our drop-off WDF business across all nine laundromat represents between 20 percent and 25 percent of our overall operation.
For pickup and delivery, we have a separate, 20,000-square-foot production facility dedicated solely to PUD – and this business is completely separate from our self-service and drop-off WDF operation at our nine stores.
We had been overwhelming our laundromats with all of our PUD orders, and it was beginning to impact the experience of our self-service customers. Therefore, we opened up the PUD facility, and we now have the capacity to do 5,000 pounds of laundry in an eight-hour shift, if necessary. Right now, we’re doing approximately 3,000 pounds per week of pickup-and-delivery laundry.
To schedule pickups, our customers go to our website and just sign up. Our POS system has made this process easy and professional – basically, it’s the same concept as the drop-off WDF at our laundromats.
Key to Success in WDF/PUD: Having a professional website is key. Also, it’s important to have vans that look professional, and that display your brand and the services you offer. Everything must be uniform.
All wash-dry-fold orders must be processed the exact same way at all of our laundromats, as well as with our pickup-and-delivery service. Everything must processed the same across the board.
Training each team member on the exact way we take in, process, and deliver back our customers’ orders is essential. You can’t make a first impression twice, so it’s important to have a beautiful presentation. After all, it’s their personal laundry, so it’s important for us to treat it like our own.
Challenges to Overcome: Making the public aware that we offer pickup and delivery. Not many operators offer a PUD service, and we’re working hard daily to bring awareness to our offerings. We understand that most people are strapped for time, and this is a service that many are loving.
My good friend, Randy Roberts of Columbus Express Laundry, noted that people didn’t used to have lawn services, but now everyone seems to be getting their yards mowed by a lawn service. And I believe the same scenario is happening with laundry.
The Future of PUD: The sky is the limit for pickup and delivery. One reason we purchased a separate facility dedicated to PUD is because we see rapid growth in this service.
Look around the industry. CLA sold out its annual conference on WDF and PUD. This tells you where the industry is headed. Also, notice all of the POS systems out there now, which are completely dedicated to PUD. We have shifted our business and are concentrating on PUD – and the future looks bright.
