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{"id":12591,"date":"2023-02-12T11:34:43","date_gmt":"2023-02-12T17:34:43","guid":{"rendered":"https:\/\/planetlaundry.com\/?p=12591"},"modified":"2023-02-12T11:34:43","modified_gmt":"2023-02-12T17:34:43","slug":"pricing-for-profit","status":"publish","type":"post","link":"https:\/\/planetlaundry.com\/pricing-for-profit\/","title":{"rendered":"Pricing for Profit"},"content":{"rendered":"

Industry Experts Discuss Pricing Strategies for Self-Service Success<\/h2>\n

[This is the first of a two-part series on vend price strategies for today\u2019s self-service laundry operations.]<\/strong><\/em><\/p>\n

It\u2019s an art and a science. It requires an experimental attitude coupled with an intuitive feel for how you want your brand and, by extension, your service to be perceived.<\/p>\n

It is, of course, vend pricing. And there are a number of factors to examine when considering a price adjustment \u2013 including revenue, store quality and the competitive landscape.<\/p>\n

The first thing a store owner should do when considering a change in pricing is to get cozy with the numbers. Understanding the basic costs to operate a store and how that store\u2019s total income stacks up to the revenue brought in by the washers and dryers will let you know whether or not a price adjustment is in order.<\/p>\n

Next, does your store warrant a price increase? According to Coin Laundry Association research, the leading reasons laundry customers choose a location has more to do with the store\u2019s operation \u2013 safety, cleanliness, customer service and machine availability \u2013 than vend prices. So, owners who keep up their stores and continually add value for their customers have no reason to shy away from increased vend prices.<\/p>\n

It\u2019s also important for most owners to be at least somewhat aware of their competitors\u2019 pricing strategies. After all, if your laundry offers the highest quality equipment and amenities but your pricing is similar to competitors who may be offering a less attractive customer experience, then there\u2019s definitely room for a price increase.<\/p>\n

In fact, 65 percent of laundromat owners responding to CLA\u2019s annual Laundry Industry Survey for 2022 indicated they planned to raise vend prices on both washers and dryers within the next 12 months \u2013 which is up from just 34 percent of operators in the previous year\u2019s survey, and only 20 percent in 2019.<\/p>\n

The survey also highlighted some geographical variances in pricing. For instance, 18- to 24-pound washers cost, on average, $3.07 nationwide \u2013 yet they average $3.35 out West and reach a low of $2.94 at laundries located in the South. Also, 35 percent of respondents in the Midwest have implemented full-cycle drying, while only 11 percent of owners in the South and West have done so.<\/p>\n

Clearly, no matter what is decided \u2013 to raise prices or not \u2013 you should regularly monitor your business and its market conditions so that your pricing strategy is in line with the prevailing climate. Without all of the facts and careful consideration, your potential profits and the future of your laundromat could end up circling the drain.<\/p>\n

This month, we asked some leading industry experts to share their thoughts and observations on this key component of a successful self-service laundry operation:<\/p>\n

Alex Harris<\/strong>
\nProfessional Laundry Systems<\/strong>
\nCommack, N.Y.<\/strong><\/p>\n

From what I\u2019m seeing, most laundromat owners are more aware of the cost of increasing utilities and labor than ever before. With this being said, most have begun to adjust their prices accordingly.<\/p>\n

Pricing strategies have changed from past business models. In the past, most store owners neglected the fact that rent increases and utility costs were digging into their bottom line, reacting slowly to increase their vend pricing. Today, I\u2019m noticing a new, younger generation of owners who are carefully monitoring their costs and are not too shy to increase their vend prices.<\/p>\n

Pricing Trends:<\/strong> In my markets, double-load washers are ranging from $2.75 to $4.25, with the majority at $3.25. Triple-loaders range from $3.75 to $4.75, with most at $4.25. The 40-pound machines range from $4.75 to $6.25, with most at $5.50. The 60-pounders are priced from $6 to $8, with the majority priced at $7.25. The 80-pound washers are at $8.50 to $11, with the majority charging $9.75. And the massive 120-pound washers typically start at $14.50 or work their way up to $19.75; however, this is based on a fairly small sample size.<\/p>\n

In turn, dryer pricing for 30-pound units is at 25 cents to 40 cents for five minutes \u2013 while 50-pounder dryers go for 50 cents to 65 cents for eight minutes, and 80-pounders typically come in at 80 cents for eight minutes.<\/p>\n

The way the industry is going, the price gap from highest to lowest vend prices seems to be increasing, depending on the specific marketplace. On smaller machines, there can be a $2 difference, and on the larger machines, it can range from $1 to $6, depending on machine size and location.<\/p>\n

Full-cycle drying is a trend. However, owners implementing it must do their homework to ensure their dryers can dry the loads in the time that has been set. Also, they need to be sure the top-off pricing feature is set on the dryers, in case some customers require a little more drying time.<\/p>\n

Free dry also is out there in the market, but of course nothing is free. The drying time must be built into the cost of the wash. And I\u2019ve asked laundromat customers why they would be willing to pay more going to a store that offered free drying \u2013 and, interestingly, their common reply was: \u201cI know exactly what it\u2019s going to cost to wash and dry.\u201d For instance, if the cost is $4.25 for a small machine with drying included, customers can more accurately budget for their weekly laundry task.<\/p>\n

Payment Technology:<\/strong> Card systems are a necessity for the future in the laundromat business. Owners need the flexibility to adjust their prices as expenses rise, and the option to accept credit, debit, and EBT cards is becoming more important in today\u2019s \u201ccashless\u201d society.<\/p>\n

To me, the biggest value of a card system is that the owner is no longer locked into quarter-increment pricing, as well as the fact that the store owner can adjust pricing within seconds.<\/p>\n

Common Mistakes to Avoid:<\/strong> The most common mistake in vend pricing is being slow to react to increases in expenses with price adjustments.<\/p>\n

In addition:<\/p>\n