When It Comes to Vend Prices; Increase and Survive

There are always a large number of potential calamities and catastrophic events threatening the welfare of those of us engaged in the coin and/or card operated laundry industry. Often the threats don’t occur as bad as we worriers think they will be. But, this time things lurking on the horizon are very real threats for the business survival of those western laundry operators who don’t respond properly to what is going on right now.

First, we have to understand what our basic business model is. At its most basic, our businesses rent machines to our clients for their short time use to wash and dry their clothes. We also, in a way, sell them the electricity, water and gas they require to do their wash and dry.

Recently, laundry operators are seeing the costs for power, gas & water rise faster than ever before. Not only must we all be concerned about the price increases we have already been saddled with, we also know that we are going to see more increases soon. We all should recognize we too must raise vend prices to match these expanding utility costs.

However, even if we have to jump our vend prices, we must not be afraid to face our clientele, or to fear our competitors about the vend price increases that must come.

As laundry owner/operators, we have a chance to bring our washer and dryer vend prices in line with other costs in today’s business world. We need to become current and catch up instead of holding on to prices that were right twenty or thirty years ago.

Our regular laundry users pay 4 to 5 times, or more, than they used to for almost everything else they buy. Coffee, milk, gas, cable etc. Today we are seeing three dollar plus per gallon gas at the pump and five dollar cups of special coffee. Could a business model like Starbucks exist and continue growing if coffee was still selling for less than a buck a cup?

Tell me, where is it written that laundry operators alone have to hold their prices down to provide our users with a super bargain?

The soaring costs for natural gas, water and electricity have not gotten as much press lately, but certainly the public knows all about it, and they will not be shocked when you raise your vend pricing to match the other cost increases they see. Frankly, laundry users expect you to raise washer and dryer prices sooner or later anyway. They know it because every thing else they buy has gone up already.

Properly announced, well in advance, your washer and dryer vend price increases will meet with little resistance from your laundry’s regular clientele. Sure, there will be one or two of your customers who will react in a negative manner, but they are the small minority. It is when an operator simply raises prices, without explanation, that he or she will get resistance from a lot of customers.

When your laundry customers really expect to see vend price increases, you shouldn’t disappoint them. Of course, you should not surprise them either. Announce any increases well in advance of the actual increase so that they can prepare themselves.

As utility prices go through the roof, it is news that gets widely reported. So many TV newscasts, and newspaper article are written about such price hikes when they happen, that everybody knows about it. Your customers, and your competitors know about the increases too. So, when it does come, there will never be a better public relations time to lower the dry time and jump the washer prices.

Customers understand that it takes gas to create hot water. When water prices are raised, they actually expect to pay more for the water they use, and so will better accept an increase in wash prices. When electric rates go up, it happens to everybody at once. People will accept properly stated vend price increases.

Many operators have told the News that they are planning to raise vend prices on all washers by 25¢ a wash. All washer, not just top loads. Done right and properly announced, that hike should cover the increases in natural gas, power and water bills and make you a little extra income while not offending clientele.

The key words are “done right.” There should be no sneak increase in prices. Laundry customers, even those who expect an increase, and understand the need for it, like to be told in advance. Give as much notice as you can. If you have employees, give them the basic reasons for the increase, and have them tell every customer who enters the laundry.

Post an explanation of why the increase is needed. Put it up a week or two in advance of the increase and leave it for a week or two after, as a reminder.

Remember, if the laundry industry had kept up with the inflation rate, as most other businesses have, we’d be vending at $2 to $2.50 a wash already. In some areas, it could even be a lot more.

 

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