Maximizing Your Laundromat’s Vending Operation
[This is the first of a two-part feature article on how to build a profitable vending operation within your laundromat.]
Beyond washers, dryers and folding tables, perhaps the most commonly found pieces of equipment in nearly every laundromat are vending machines.
In fact, according to recent Coin Laundry Association statistics, more than 80 percent of laundry owners offer vended snacks and/or beverages, as well as laundry-related products, to their customers.
However, in 2022, simply plugging in a used drink machine and a half-filled candy vendor in the nearest empty corner of your store may no longer be the surefire path to vending riches it once was.
Here’s a look at today’s changing vending industry – as well as how to maximize your laundromat’s vending operation:
Vending Industry Snapshot
A strong rebound in sales in all major food and beverage categories through vending machines and at micro markets led to a 46 percent increase in 2021 over the previous year’s revenue, according to Automatic Merchandiser’s latest State of the Industry report. Sales in the unattended retail channel totaled $19.4 billion in 2021, compared with $13.3 billion in 2020, when vending and workplace refreshments suffered their biggest downturn ever.
The vending industry’s revenue was initially expected to fully return to, or surpass, 2019’s benchmark revenue high of $22.2 billion, after falling 45 percent in 2020, the first year of the pandemic that brought months-long lockdowns. Conversely, lingering at-home work patterns intensified by coronavirus variants, rising inflation and supply-chain disruptions worked together to hinder a stouter recovery in 2021, and continue to do so this year.
Regardless of the unpredictable nature of the COVID-influenced labor market, combined vending machine and micro market revenue gains were as follows:
- Healthy items (including plant-based) up 200 percent.
- Food (sandwiches, salads, entrées) up 170 percent.
- Snacks (salted, bars, mixes, etc.) up 120 percent.
- Packaged cold drinks up 92 percent.
- Candy (chocolate and non- chocolate) up 85 percent.
- Confections (pastries, cookies, etc.) up 64 percent.
- Ice cream/frozen items up 50 percent.
- Hot drinks (vended coffee, tea, cocoa, etc.) up 40 percent.
- Miscellaneous “other” items up 26 percent.
“There has been a large move toward vending retail-sized products, instead of selling them over the counter,” explained Vince Hansen, president and CEO of Vend-Rite Manufacturing Co., based in Cicero, Ill. “We believe this increase in demand was driven by the pandemic, the difficulty in finding and retaining employees, and ability to control inventory.
“Another key trend has been product versatility,” he added. “Our venders allow laundromat owners to dispense a multitude of products – including single pods, single-load packages, bags of pods, kilo bags of powders, bottles of detergents, fabric softeners, scent boosters, bleaches, powdered and spray stain removers, and even hangers and lint rollers. The increase in revenue is a nice bonus. Every store owner who has switched from over-the-counter sales to vending has enjoyed an increase in revenue.”
Equipping Your Store
After deciding to get into the vending business at your laundromat, the next decision is whether you’re going to purchase your own machines and handle the day-to-day maintenance – or turn all of those issues and potential headaches over to a vending operator, which is similar to a route operator in the laundry business.
The decision you make is going to depend on your particular business situation. How many stores are you looking to equip? Are they attended? What type of volume do you anticipate? Are you or one of your attendants hands-on when it comes to machine repairs? How much revenue are you looking to earn from your vending operation?
If you decide to purchase your own machines, here’s what to look for in an equipment manufacturer, according to the National Automatic Merchandising Association:
- Sells equipment at an established, uniform price.
- Has the ability to supply parts, service manuals, trouble-shooting tips and conversion kits.
- U.L.-listed equipment.
- Various approvals under local, state and national health codes.
- Willingness to demonstrate equipment (open houses, training sessions, etc.).
- Upgrading machinery, developing new types of machines and technology.
If you choose to turn your vending account over to an operator, here are a few provisions you should include in the contract:
- Exclusivity of service rights.
- Cleaning and maintenance duties.
- Specified equipment.
- Insurance provisions.
- Service and storage details.
- Utilities.
- Licenses and taxes.
- Access rights.
- Financial arrangements.
- Pricing.
- Term of agreement.
- Cancellation provision.
- Reporting requirements.
Pitfalls to Avoid
As with the laundromat business, the vending business is a relatively simple one. However, that doesn’t mean it’s foolproof. There are clearly some common mistakes you’d be wise to avoid when adding vending to your laundry operation.
If you own and stock your own food and beverage vendors, one of the biggest mistakes is buying products on impulse.
All wholesale price clubs aren’t the same. You’ve got Sam’s Club, Costco and a host of others, but you have to price shop because they’re not all the same. Even your local supermarket can be very competitive.
Another mistake is buying machines that are too large. The bigger the better is not necessarily the way to go in vending. At times, vending operators will put larger machines into a location so that they don’t have to refill them as often. But, if you own the equipment and are at your laundry on a daily basis, it might be smarter to go with smaller machines.
It’s a delicate balance. You don’t want to go too small with the size of your machines either.
Some laundry owners will shop for equipment based strictly on price, and later many wish they had gotten something larger, especially if they find that they’re filling the machines too often. For the amount of foot traffic they have, some store owners realize, after the fact, that they could actually be selling more products if they offered a bit more variety.
As far as the types of products you offer, a common mistake is not selling what your customers truly want to buy. Perhaps survey your clientele as to what types of snacks and beverages they would prefer to see you carry, rather than guessing.
Choose the drinks and snacks according to your marketplace demographics, vending experts suggest. Everything about your laundromat should cater to the people you’re serving. You have to listen to your customers. If you do, vending can be a great addition to your business.
Machine placement within your store also can create problems. Clearly, the size and configuration of your laundromat will strongly dictate where you place your machines. However, avoid placing your vending machines in an area where they will receive a lot of direct sunlight – that can raise the temperature of the products inside, and it can even disrupt the digital displays in the keypads of the vending equipment over time.
Lastly, as with your washers and dryers, keep your vending machines looking spotless and inviting. Whether or not you choose to let a vending operator handle this segment of your operation, be sure your attendants run a cloth over the machines when they’re cleaning the rest of the store.
“Clean it today, and it will work better tomorrow,” Hansen said. “We have been using this slogan for years – and it’s true! What’s more, most of the service calls we receive from store owners are related to a lack of maintenance.
“Laundries create humidity – add powder and you create a problem for machines that rely on gravity to dispense products. Repeated vending will cause the buildup of ink from packaging, as well as the detergent powder, over time. This buildup creates resistance that affects the vend cycle.”
Hansen suggests using a steaming cloth to wipe down all of the surfaces that the packaging comes into contact with during the vend cycle to help eliminate maintenance issues.
“Even better, wiping the cleaned surfaces down with furniture polish will improve the delivery of products and make the cleaning process easier the next time around,” he added. “Beyond cleaning maintenance, inventory maintenance is key. A full vender looks better, sells more product, and creates no doubt that the unit is functional.”
Clearly, vending machines can be a perfect complement to a laundromat business. After all, you’ve got a captive audience that’s going to be in your store for at least a couple of hours at a time, with little to do but wait. Why not give your customers something to do with their time – and money – while they wait?
In Part 2, we’ll share what some leading laundromat owners have to say about the vending operations at their businesses.
