Content about Price

April 8, 2013

Annual Survey: Latest Numbers Reflect Continued Year-to-Year Improvement (Part 2)

CHICAGO — How do you think your self-service laundry business compared to others in the industry last year? Did you have a good year or a bad year in 2012? How does your pricing compare to others?

American Coin-Op’s annual State of the Industry survey offers you the opportunity to compare your operation to others in the industry. It focuses on 2012/2013 business conditions, pricing, equipment, common problems, turns per day, and utilities cost.

In instances where respondents were asked about 2012 business results, they were given the opportunity to state their results were up, down or unchanged. This is a departure from surveys compiled in 2011 and earlier, when they were asked only if their business results were up or down. Keep this in mind as you are making comparisons to previous years’ polls.

The survey is an unscientific electronic poll of American Coin-Op readers who operate stores. Some percentages may not equal 100% due to rounding.

WASHER PRICES

American Coin-Op asked respondents about their current washer prices, and if they increased prices this year or planned on doing so by the end of the year.

More than 85% of respondents offer top loaders. The price range for a top-load wash is $1 to $4. The most expensive top-load wash was 50 cents more that last year’s top price.

Here are the most popular top-load prices, followed by the percentage of respondents using them:

$2 (30.9%)
$1.75 (16.5%)
$2.25 and $2.50 (14.4% - tie)

There really isn’t much change in top-loader prices from a year ago. The $2 price remains the most popular, followed by $1.75. The only difference reported in this equipment type is in third place, where $1.50 and $2.25 were tied in last year’s survey.

An extremely small share of operators continue to charge $3 or more for a top-load wash. This is the third straight year that there have been multiple prices topping $3 reported in the survey.

The most popular prices for some of the small front loaders are:

18 pounds: $2
20 pounds: $2.50
25 pounds: $3

The lowest price reported in the above grouping is $1.25 (18-pound washer) and the highest is $6 (25-pound washer). Overall, the most popular small-front-loader prices reported in this year’s survey are comparable to last year’s.

The price range for a 30-pound wash is $2 to $6.50. Here are the most popular 30-pound prices, along with the percentages of respondents using them:

$3.50 (25%)
$3 (19.1%)
$3.75 (11.8%)

There was a tie between $3.50 and $3.75 for the most popular price for a 35-pound wash. Next in order are $4.50 and $3. The price range for a 35-pound wash is $2 to $5.50.

The most popular price for a 40-pound wash is $4, but $4.50 and $4.25 aren’t far behind. The most popular 50-pound wash price is $5, followed by $5.50 and $6. There was a three-way tie for the most popular price for a 55-pound wash: $5, $5.50 and $7.

The most popular price for a 60-pound wash is $6, unchanged from last year’s survey. The price range for an 80-pound wash is $5.75 to $13.50, with $8 and $8.25 tying as the most popular price.

Other prices reported were $9.75 and $15.25 for a 90-washer, $9.50 for a 100-pound washer and $14.99 for 125 pounds.

The operators to our survey vary year to year, so prices tend to vary. But the survey consistently has shown that operators offer a wide variety of front loaders (prices for 15 different capacities were logged in this year’s survey) with a broad price range.

Roughly 44% of respondents have raised or plan to raise washer prices this year, and 26.9% are undecided. The remaining 29.4% have not raised prices nor intend to do so.

DRYER PRICES

Raising dryer prices is something that operators have tended to shy away from, choosing instead to focus on washer price hikes. But it’s worth noting that some operators indicated that they have shortened cycle times in the past year. While customers in those stores aren’t paying a higher price, they are getting less drying per cycle.

Here are the most popular dryer prices, followed by the percentage of respondents using them:

25 cents/5 minutes (19.1%)
25 cents/7 minutes (18.3%)
25 cents/6 minutes (13.9%)
25 cents/8 minutes and 25 cents/10 minutes (10.4% - tie)

The No. 3 price from last year’s survey has jumped to No. 1 in this year’s. Seven minutes of drying time returned to the No. 2 slot after being bumped to No. 4 last year, while eight minutes of drying time fell from No. 2 last year to No. 4 this year, where it shared the spot with 10 minutes of drying time.

The 25-for-10 price, which was once an industry staple, picked up a couple of percentage points on last year’s result but still remains well down the list.

Once again, there was a wide variety of dryer prices reported. The most expensive (and longest) cycle was $1.75 for 35 minutes.

Roughly 18% of respondents have raised or plan to raise dryer prices this year, and 20.2% are undecided. The remaining 62.2% have not raised prices nor intend to do so.

PAYMENT TECHNOLOGY

More than 83% of respondents operate coin-only stores, 7.6% operate card-only stores, and 9.2% have operations that offer both payment types.

ATTENDED OR UNATTENDED?

Nearly 48% of respondents say their stores are fully attended. Roughly 29% say their stores are partially attended, and the remaining 23.1% say their stores are unattended.

DROP-OFF SERVICE PRICING

Drop-off-service pricing ranges from 70 cents to $3 per pound. Here are the most popular drop-off-service prices (per pound), followed by the percentage of respondents using them:

$1 (36%)
$1.25 (16%)
$1.10 (9.3%)

The drop-off-service prices remain similar to 2012 prices, and there is a wide variety of prices charged for the service. There were 20 different prices charged per pound in the responses to our survey.

Two-thirds of the respondents offer drop-off service, which is identical to last year’s survey.

Check back on Wednesday for the conclusion: Equipment Purchasing Trends, Turns Per Day, Common Management Problems, and more

April 9, 2012

Survey: Operators Soldier On Amidst Lagging Economy, Increasing Costs (Part 2 of 3)

CHICAGO — How do you think your self-service business compared to others in the industry last year? Did you have a good year or a bad year in 2011? How does your pricing compare with others?

American Coin-Op’s annual State of the Industry survey offers you the opportunity to compare your operation to others in the industry. It focuses on 2011/2012 business conditions, pricing, equipment, common problems, turns per day, and utilities cost.

The survey is an unscientific electronic poll of American Coin-Op readers who operate stores.

WASHER PRICES

Respondents were asked about their current washer prices, and if they increased prices this year or planned on doing so by the end of the year.

Eighty percent of respondents offer top loaders. The price range for a top-load wash is $1 to $3.50. The most expensive top-load wash was the same price last year.

Here are the most popular top-load prices followed by the percentages of respondents using them:

1. $2 (25.8%)

2. $1.75 (20.6%)

3. $1.50 and $2.25 (14.4% - tie)

5. $2.50 (11.3%)

The biggest change is that $2 jumped from No. 3 last year to No. 1 this year. This moved last year’s No. 1 $1.75 into No. 2. Tying for third were $1.50 and $2.25.

A handful of operators continue to charge $3 or more for a top-load wash. This is the second straight year that there have been multiple prices topping $3 reported in the survey.

The most popular prices for some of the small front loaders are:

18-pound washers: $2.50
20-pound washers: $2.50
25-pound washers: $3

The lowest price in the above grouping is $1.75 (20-pound washer) and the highest price is $5 (also a 20-pound washer). Overall, this year’s most popular small front-loader prices are a bit more expensive than last year’s prices.

The price range for a 30-pound wash is $2 to $5.50. Here are the most popular 30-pound prices, along with the percentages of respondents using them:

1. $3.50 (34.8%)

2. $4 (10.9%)

3. $3, $3.25 and $4.25 (8.7% - tie)

The most popular price for a 35-pound wash is $3.50, followed closely by $4.50. The price range for a 35-pound wash is $3.25 to $5.25.

The most popular price for a 40-pound wash is $4.50, but $4 and $5 aren’t far behind. The most popular 50-pound wash price is $5.50, followed closely by $5.

The most popular price for a 60-pound wash is $6. The price range for an 80-pound wash is $6.25 to $13, with $8 being the most popular price.

The most popular prices for the largest front loaders (125 pounds) are $14.99 to $15.50.

Because the group of operators who respond to our survey is different each year, prices tend to vary. But the survey consistently has shown that operators offer a wide variety of front loaders (prices for 20 different capacities were logged this year) with a broad price range.

DRYER PRICES

Operators have historically tended to shy away from raising dryer prices, choosing instead to focus on washer price hikes. The average store owner continues to operate under the belief that customers will be upset by tinkered-with dryer prices but less apt to complain about washer price hikes.

Here are the most popular dryer prices, followed by the percentage of respondents using them:

1. 25 cents/6 minutes (23.1%)

2. 25 cents/8 minutes (18.5%)

3. 25 cents/5 minutes (16.7%)

4. 25 cents/7 minutes (13.9%)

5. 25 cents/10 minutes (8.3%)

The No. 1 price remains the same as last year, but fewer operators are using it. Seven minutes of drying time dropped from second last year to fourth this year, and the 25-for-8 and 25-for-5 prices each moved up a spot from last year. The 25-for-10 price—once an industry staple—remained fifth at practically the same percentage as last year.

As usual, there were a wide variety of dryer prices reported. The most expensive (and longest cycle) was $1.75 for 35 minutes.

A handful of respondents reported they offer free dry in their stores.

DROP-OFF SERVICE PRICING

Drop-off-service pricing ranges from 75 cents to $2 per pound. Here are the most popular drop-off-service prices (per pound), followed by the percentage of respondents using them:

1. $1 (34.9%)

2. $1.20 and $1.25 (10.8% - tie)

4. 90 cents (6%)

5. $1.10 (4.8%)

The drop-off-service prices remain similar to 2011 prices, and there are a greater variety of prices charged. There were 21 different prices charged per pound amid the operators who took our survey.

Slightly more than two-thirds of the respondents offer drop-off service, which is down from last year’s survey.

PRICE HIKES?

We asked operators if they have already raised washer and/or dryer prices in 2012 or intend to do so before year’s end.

Approximately 50% say they have raised washer prices this year or intend to raise prices by the end of the year. Roughly 31% of respondents say they are not planning to raise washer prices this year, and 19% are undecided if they are going to hike prices in 2012.

Regarding dryer prices, 17.8% have raised dryer prices this year or intend to do so later in the year. Roughly 64% don’t plan to hike dryer prices this year, and 17.8% are undecided about raising their prices.

In 2011, only 34% said they raised washer prices or intended to do so by the end of that year, and 13% said they raised dryer prices or intended to do so before that year’s end.

Check back Wednesday for Part 3: Equipment Purchasing Trends, Plus Common Managerial Headaches

February 21, 2012

Coin Laundry Pricing Strategies (Part 2 of 3)

CHICAGO — Phil Arvin and his two partners opened their first Maytag-equipped coin laundry in Memphis, Tenn., last March. The 5,000-square-foot attended store is equipped with new energy-efficient 60- and 80-pound washers that are much larger than those in competing stores and thus could command a higher vend price, Arvin says.

But the group followed the suggestions of distributor Justin Laundry and established prices that are comparable to the laundries nearby, Arvin says. “Even though we’re offering a much higher quality product, we didn’t want to be perceived as the higher priced place.”

This is just one example of how the market can influence a laundry’s pricing strategy. But other factors are at work, too, and there are some basic premises that the self-service laundry operator should keep in mind when establishing or changing vend prices.

Should You Announce a Price Change?

How should a laundry owner approach the topic of pricing with his customers? Should he alert them prior to implementing a price change?

Kevin Hietpas, vice president of sales and marketing for Dexter, says he’s seen many owners have good luck increasing prices when they are up front with their customers. For example, if you’re planning to raise prices due to higher utility rates being charged by your municipality, post a couple of articles from the local newspaper about that topic. “Customers, as much as they may not like it, understand that kind of stuff,” he says.

“As consumers, we routinely respond to price increases with little or no advance notice from the stores or makers of the products we buy,” says Gary Gauthier, national sales manager, vended laundries, Milnor Laundry Systems. “Consumers in vended laundries are no different. Store owners and their staffs should be ready to carefully respond to customer questions about the higher costs. But the vast majority of the store owners that I’ve spoken to hear very little feedback when a modest price increase is enacted.”

He recommends raising prices on different types of machines at different times, instead of implementing a sweeping, storewide increase all at once. “This puts the owner in the position of continually assessing vend levels while customers aren’t shocked when costs go up.”

“The most important thing to address regarding a change in price is why,” says Kent Walters, national sales manager for Maytag/Whirlpool Commercial Laundry. “Customers need to understand why prices are fluctuating. Typically, price increases can be attributed to the cost of utilities. Store owners have to stay ahead of the cost of doing business, especially in the laundry industry that depends heavily on the use of utilities.”

“The owner ends up explaining it one way or another,” Hietpas says. “That’s why I think it’s better to address it on the front end with as many facts as possible rather than feel like they’re playing catch up by explaining it on the back end.”

Shifting Prices Too Frequently?

Vending technology has enabled owners to change prices on equipment easily—during slow hours or days, for example—but care should be taken to not change prices too often. This can turn off customers, Walters says.

“Yes, altering vend prices often is not a good practice for owners looking to be successful and grow their customer base,” he says. “If customers are unsure what price to expect on a regular basis, they will look for a store that’s more consistent.”

Consistent pricing makes things easier on your customers, Hietpas says.

“A lot of customers are very good at doing the basic math in comparing between (machine) sizes,” he says. “If (one machine is) twice the size of a machine, it should be roughly twice the vend price. A lot of owners like to have rational multiples between machines to make it easier for customers to make decisions about which machine they might want to use.”

Customers are more sensitive to how long it took and how much it cost to dry than they are to small changes in wash prices, Hietpas says. “It’s the last piece they interact with, so it just seems to stick in their memory a little more.”

Tomorrow: Your competitor has undercut you – now what?
Click here for Part 1.

April 20, 2011

Survey: Business Numbers a Bit Brighter (Part 2 of 3)

CHICAGO — Is your laundry still suffering from the lingering effects of the recession, or are you finally seeing some light at the end of the tunnel? It seems to be a mixed bag when it comes to the state of the industry.

March 2, 2011

Is it Time to Increase Prices? (Part 5 of 5)

ARMONK, N.Y. — In my last article, I offered examples of necessary price hikes at a fictitious store

February 28, 2011

Is it Time to Raise Vend Prices? (Part 4)

February 8, 2011

Is it Time to Increase Vend Prices (Part 3)

ARMONK, N.Y. — My previous articles showed that from 1997 to 2010, the average washer vend prices stayed ahead of inflation, but fell behind the cost of natural gas.

Our overhead costs should be used to set our base vend price, but any adjustments to vend price should be made with utility costs in mind.

February 2, 2011

Is it Time to Increase Vend Prices? (Part 2)

ARMONK, N.Y. — In Part 1 of this article, the focus was on the various expenses Laundromat owners encounter. In this part, the emphasis is on pricing and inflation. Have prices really kept up with inflation?

April 9, 2010

Too Concerned With Competition? (Part 1)

March 26, 2010

State of the Industry Survey: Operators Take a Hit in 2009 (Part 2 of 3)

July 15, 2009

Raise Prices, Cut Costs, Market and Make Money

April 10, 2009

State of the Industry Survey: Pricing Stays Steady in 2008

December 5, 2008

How Do You Know if It's Time to Raise Vend Prices?

May 1, 2008

State of the Industry Survey: Pricing