CHICAGO — Ralph Wagner, who owns Wash ’n Dry Laundry Services in Morris, Ill., has been working in the coin laundry business for 14 years. His store an hour southwest of Chicago occupies 2,000 square feet and features Maytag equipment totaling 33 washers and 26 dryers.
Up until last June, his business was strictly a self-service laundry. But since then, his sales have risen 25%. Why? Wagner attributes it to an extra service he started last summer, one that many laundries may already offer: wash/dry/fold.
Getting into wash/dry/fold was something he and his wife had always wanted to try. Wash ’n Dry competes with a couple other Laundromats in the market of about 25,000 residents, but the economy and the lack of actual wash/dry/fold service in the vicinity pushed Wagner to pursue it.
“We feel right now, with the economy coming back, that [it was] a good time to start it,” he says. “In our area, we only had one other Laundromat that offered the service.”
Wagner reached out to Kevin Meyer, president of distributor Dolphin Laundry Service, Bensenville, Ill., to help him get started. “It’s a tough thing to get going, but it’s gone pretty well,” Wagner says. “A 25% increase in our revenue is pretty good.”
Chris Brick, regional sales manager for equipment manufacturer American Dryer Corp., explains that up to 80% of attended coin laundries in the United States offer some form of wash/dry/fold service. “Wash/dry/fold brings a different customer base to a lot of laundries.”
“Household washers [or] small equipment within apartment buildings can have trouble handling comforters,” says Meyer, “so it solves a need for prospective customers.”
Considering the convenience such an added service offers to customers, it’s no wonder that many coin laundries have decided to cash in.
Dick Ruel, national sales manager at equipment manufacturer Maytag Commercial Laundry, attests to the profit potential. “If it were not for wash/dry/fold services, some laundries would not turn a profit.”
How much does such a service contribute to a store’s total gross revenue? Gary Gauthier, national sales manager for equipment manufacturer Milnor Laundry Systems, says it varies from store to store, while Meyer cites a range of less than 5% to up to 30%.
Considering how many laundries offer this service, what considerations must one take to truly profit from wash/dry/fold? Brick says the key to mastering the service starts with organization.
With policies in place and any equipment issues resolved, the next consideration is employing an attendant.
Hiring an attendant should ultimately pay for itself, according to Brick.
“To me, the better way to look at it is you would want a minimum of 50% of whatever their labor cost is to attend [their] laundry, they should try to generate in wash/dry/fold,” he says. “If you look at a guy that’s spending $60,000 a year in labor, to me he needs to generate at least 50% in wash/dry/fold revenue [or] $30,000.”
To keep labor costs down, Wagner, his wife, and, on occasions, his son and daughter pitch in to process the store’s wash/dry/fold service. While his store only has one part-time employee that helps with the service, he plans on hiring a full-time attendant.
“We’d like to have one full-time employee hired by the end of the year,” he says. “Hopefully we have enough accounts established [so] that we can maintain [it] and make it profitable.”
What qualities should a store owner look for in a candidate? Brick suggests seeking the right combination of experience and personality. Look for a person who has “a good personality, and someone that is going to communicate positively with your customer base [and] make them feel welcome [but] doesn’t mind washing, drying and folding clothes.”
Protecting your business against damage claims is another important issue to address, and that’s where insurance coverage comes into play. “With residential laundry, the standard insurance policy should suffice,” Meyer explains. But if a store wants to get into commercial accounts, “Owners should consult their broker to ensure the proper amount of liability insurance is in place.”
Besides the possibility of lost or damaged garments, there is another potential liability: “left items,” or items that customers forget they had brought in for laundering. Preventing these occurrences all goes back to an owner’s policies and procedures, and establishing a reliable tagging system, Brick says.
“When [a] customer comes in and they sign that ticket, some [stores] will take that ticket with a magnet and when that load goes into the wash, that magnet is stuck with that ticket on the wash,” Brick says. “When the load moves to the dry … the ticket never leaves the load.”
Charging by the pound is “the way to go now,” says Brick.
In his experience, Ruel has seen pricing range between 65 cents to $1.50 per pound. Brick says that some stores have a $5-10 minimum.
Meyer and Gauthier agree on the per-pound trend, but add that some laundries charge separately for bulky items such as comforters.
“Our recommendation is always determine your costs to process, and what the desired profit and price [is] accordingly,” says Meyer.
For Gauthier, transparency is key when it comes to pricing. “It’s important to make sure that a store’s rates and policies are clearly published and easy to understand.”
As for turnaround time, Brick explains that most fully attended laundries offer same-day service for garments brought in before noon. If a load is received later than that, many stores will have it done the next day.
But as with any business, rewarding loyalty is a top priority. If a regular customer brings something in and requests same-day service, “absolutely you provide that service for the regular customer,” he says.
“You try to go above and beyond to keep that business.”
Check back Wednesday for Part 3!