CHICAGO — Vince Hansen, Vend-Rite Mfg., is a longtime member of the coin laundry industry. While Hansen believes that every coin laundry is different and no single approach to problems works, he shared these thoughts on the laundry business and offered several tips to improve your vending bottom line.
TAKING ADVANTAGE OF VENDING OPPORTUNITIES
Hansen: Storeowners have done a good job of exploring various types of revenue-generating opportunities that go beyond traditional soap and bag sales. Soda and snacks are commonplace, but the introduction of video games, pinball, tanning booths, kiddie rides, plush-toy cranes, pool tables and massage chairs were outside the norm 15 years ago. Today, some owners use these ancillary items to create a theme for the laundry.
While the decisions to add unique revenue-producing items are made with good intentions, sometimes the outcome produces less than desired results. The potential risk or consequences that the item might bring can have a negative effect on your regular customers. Children can have a good time drinking sodas, eating snacks and playing video games, but they may make enough noise to bother your laundry patrons. Kiddie rides are a great way to entertain children, but who’s watching the children while they are on the ride? Who’s liable if they fall off the ride? How much space will the ride require? Should the space be used for another washer or dryer?
Storeowners need to look at the big picture and decide if the risk/reward is worth it, just like any other business decision.
Trying to maximize vending revenues raises several questions. Is the store attended? Does the store offer drop-off laundry or sell products over the counter? The answers to these questions will help a storeowner decide if he/she wants to purchase and maintain additional vending equipment or hire a company to place and maintain the equipment and earn a percentage of the product sales. The soda, water, snack and candy vending industry makes more than $5 billion in annual sales. There is no reason why coin laundry owners can’t get a piece of this market.
We are seeing a trend toward over-the-counter sales of multi-use products to meet customer needs. New laundries feature a mix of larger washers that need more detergent than the current coin-vend-size box can provide.
Coin laundry equipment distributors have recognized this need and have started to place the multifaceted machines in laundries along with the traditional soap venders. This keeps the revenue from the sale of multi-use products in the store. I have seen neighboring businesses — right next to attended and unattended stores — take advantage of selling multi-use boxes of soap. Coin laundry owners are losing an opportunity to satisfy their customers’ needs.
The advancements in vending machine technology have broadened the line of products that can be vended. There are machines that heat and vend pizza, hot dogs and soup. You can even purchase products using a credit card or debit card. There are ice cream machines that are expensive, but in the right location will generate huge revenues. The coffee machines of today not only brew a freshly ground cup of coffee, but also brew a cappuccino, latte or espresso as well.
Owners can increase the bottom line by offering a wide range of consumables to the captive laundry audience.
WHAT WOULD I VEND?
Hansen: I would offer the standard coin-vend products in addition to specialty products that would allow a customer to take care of a particular cleaning problem. I would offer pretreaters, spot removers, color-transfer removers and detergent boosters in sizes that matched the customers’ needs.
Additional services like drop-off laundry would bring more traffic into the store. Offering a pickup and delivery service would help expand the business. Doing a co-op business with a drycleaner would provide one-stop shopping for my customers. Providing drinks, snacks, Internet access and television in a certain area where the customers could relax would make the visit to the store a pleasant experience. I think it would even be fun to offer some sort of surprise, treat or unexpected gift (Kozy cup, change holder, key chain, t-shirt or laundry bag) that featured the laundry name. All of these things would promote my laundry as customers used them.
ADVICE TO INVESTORS
Hansen: If someone asks about getting into the business, I tell them to keep the store simple, clean and working. If you want to keep your customers coming back, you need to provide them with the ability to predict what each visit to your store will be like. You want them to have a good experience.
I believe people still think of coin laundries as dark, dingy, noisy places that they have to spend more time in than they want to. Concerns of finding a group of washers together to use, searching for laundry carts, waiting for dryers and deciding if there is enough space for folding or if the folding has to be done at home, might have been commonplace years ago.
Today’s laundries are different. They are large, open spaces with plenty of light and wide aisles. They feature sharp-looking stainless steel washers that can do larger loads in less time. They extract more water during the spin cycle which in turn reduces drying time. Yes, the dryers are also bigger. Today’s stores make doing laundry as painless as possible.
This is a great industry for someone who wants to run his/her own business. I believe the costs associated with building a profitable coin laundry leave little room for any middle management. The store needs to be built in a promising location, with a mix of equipment that caters to the area demographics. The owner needs to be willing to wear the many hats required to nurture the business.
Like any business, employees encourage or discourage growth. Invest time in training your attendants to be helpful, attentive and professional. In a recent USA Today article on how hotels train employees, it was mentioned that “building organizational cultures will add to the bottom line by keeping customers satisfied and loyal” and that “training pushes employees to understand the customer and anticipate what they might need.” The same is true for coin laundries: a warm, friendly atmosphere to welcome customers is invaluable. Get to know your customers, they can be your best form of free advertising.
Hansen: I don’t believe storeowners do enough to market their businesses. Putting a listing in the Yellow Pages puts you on the map, but does not generate business. At the very least you should have a small ad in the Yellow Pages listing your hours of operation, additional services and weekly specials.
I believe owners should “sell” the services they offer to grow their businesses. Being creative in the way you promote your business also brings in new customers. Sponsor a Little League or adult softball team, maybe wash their uniforms. Where do you think those parents or players will go when they need the services you offer? Try placing advertising with a local newspaper or radio station. As a consumer, all the products we use are sold to us daily through print, radio and TV advertising.
Hansen: We’ve grown as an industry; there are more attended stores now than ever before and this has helped change the look and feel of laundries. Stores with attendants who welcome and assist customers bring a more professional approach to the industry, one that people appreciate. This may bring more customers into your store from a surrounding store, but I don’t think it will change the laundering habits of a homeowner who owns a washer and dryer.
THE NEXT BIG SERVICE
Hansen: I don’t know what the next big service will be, but if the current trend of placing larger-capacity washers and dryers continues, growth of commercial drop-off accounts may occur. Offering a pickup and delivery drop-off service to small- and medium-size businesses such as restaurants, beauty product sales, daycare centers and health clubs could grow the bottom line and utilization of new equipment.
Looking forward, we could see more of a one-stop shop model. As fuel and natural resources become more expensive, we may see more of a co-op of services at locations. Today you see fast-food chains sharing the same building to cut down on overhead.
Hansen: Ten years out, the elimination of top loaders is probably a given, as most new stores only offer a token number of them. Commercial and home pickup and drop-off services may become commonplace. There may be drive-through laundries. Technology may even make tunnel washers small enough to be used in coin laundries 24/7. Lifestyles, equipment technology and clothes fashions will shape our industry in the future. One thing is for certain: clothes will get dirty and will need to be cleaned. Will you be ready?
Vince Hansen has been involved in the coin laundry industry for more than 18 years. Founded in 1948, Vend-Rite has produced machines to dispense a host of products. In 1953, the company produced the first laundry product and plastic bag venders, Hansen says. Later that year, the first private-label “Tide” vender was produced.