Price Wise - Is your Laundromat Keeping Up with the Times?

There are certain things we buy as consumers that we don't think twice about. Especially basic things we need like food, regular clothing (nothing fancy), staple groceries and stamps. Gas used to be in this category too - a long, long time ago.

I've gone to Quiznos a few times to get a little combo lunch. Good food, good bread, fresh meats but let's face it - it's still fast food. I guess it's what you would consider high end fast food - but fast food nonetheless. I've unconsciously ordered and eaten at many fast food joints in the past, but being in Retail now myself (because whether you know it or not, owning a commercial laundry company is being in retail) I'm always looking at pricing and how big chains run their money machines. I keep an eye out everywhere from Dunkin Donuts to McDonalds to you name it.

My last order at Quiznos was a medium sub with the superdy duper combo special of a small drink and bag of chips. The bag had 3 chips and no extra cost for the air. The total cost for my smallish lunch was just shy of $11.00.

I'm no cheapskate but this $11.00 smallish sub combo really got me thinking about it. Wow $11.00 for a combo meal at Quiznos. I paid and ate my sub anyhow. What the hell was I gonna do? Lay down in the middle of the store in non-violent protest? I made my usual smart ass comment to the manager while paying "Do you have a Credit App I can fill out?"
She just laughed and put her hand out to receive my $20.

As I ate my lunch it occurred to me that the constructed price point I had just paid for was genius. I have money (I'm successful in the laundromat game! - No laughing) so an expensive sub isn't going to make me walk out of the store - most everyone else in and around my town is in the same boat. Quiznos and many stores like it push the price point to the bleeding edge, just enough to even make someone well-off say "shit this is just about a rip-off". If it was priced probably even a dollar more who knows how many customers would come back. At the current prices, there's still a line out the door. They may be losing a few customers but the demand still rages at these premium prices.

That road of unapologetic pricing leads to riches - when your product can back it up. I also heard at a recent seminar that if you're not getting any complaints about your pricing, your prices aren't high enough. That goes hand in hand with that profitable mindset.

I'm one of the highest priced laundromats I've ever seen but we can back it up and still there's not enough room. Strangely enough the only other crazy pricer on the planet I've seen is ironically enough about a mile away. They charge $12 for a 70 pound wash and all other prices fall in line accordingly with this premium price tag. Most of my machine prices are higher than any other store I have ever seen - except this guy and a few others that have maybe a machine type or two that are higher (like a guy - we'll refer to as MY HERO - who has his dryers at 49 cents for 8 minutes of heat I met recently).

It's so strange that the Crazy Pricer (or Rich Genius) is in the same general region. It has nothing to do with high end demographics or anything like that believe me. It has to do with pricing your store for maximum cash flow. Do you want to be in this business to make good money - or do you just want to tell everyone you own a laundromat?

So many of the very old timers I've seen in this business are still stuck in the 70s - maybe even the 50s. Over last holiday, I toured many unattended laundromats in another state. A couple were in what I would call decent shape - not stunning condition - but well lit and for the most part clean, and most were absolute dumps. Like most older Mats - whether they're attended or not, there were handfuls of machines out of order in all these little stores I toured. The amazing similarity between every one of these Mats (besides the fact that they STILL had customers) was that they were all priced ridiculously low. I would even venture a guess that many of them haven't updated their coin slot pricing since they opened! For some of these stores we're talking probably a decade or two!

All the soap vending machines were half broken down and rotto. Every single store I went to had 50 cent price tags for the soap - just like the old days. The old 25 cents for varying 6-8 minute time frames on the crappy old puke slash mustard yellow dryers. All these stores had mostly toploaders for machinery - all were $2 or less! All washers were under priced. Even with the decrepitness of most of these stores - the underlying thought I had was: Look at all the money being left on the table here.

Once again, most people understand you can charge really high prices for a premium store and premium service. Most of these operators probably do not have the confidence to raise their prices even to 1980 standards because of the lowly condition of their stores. The thing is though even the decent stores were pretty much at the same prices! Some of these owners must know that they could raise prices but are just too lazy to do it - especially if they have to mess with coin slots. It's still unbelievable to see though. $$$ Left on the table.

I've watched many of my customers as they come in and use the store. Most of them, like me at Quiznos, are unconscious buyers. I have swipe card technology which really aides this process. In any business you will have the price shoppers looking around asking how much things are but there are fewer of these than most people think. I think many operators overestimate this factor. If some question your pricing - answer them and give them your rationale. Most will agree with you, the ones that are looking for price alone - send down the street to one of your decrepit hell hole competitors (soon to be out of business).

It's not just laundry-entrepreneurs making pricing mistakes. As Reed Holden, co-author of The Strategy and Tactics of Pricing said, "Entrepreneurs tend to keep prices too low". Laundry entrepreneurs for the most part keep their pricing to the point of the store being on life support!

It's 2007! Most of us are paying $50 a week to fill up on gas. How have your natural gas bills been at your laundromat? Not cheap. Quiznos subs are $11 and you're only charging $2.25 for a topload wash? Even postage stamps are going up AGAIN in a couple of weeks. Interestingly enough, stamps are going up to 41 cents. Think about that for a moment and compare it to 25 cent interval dryer spins. There are many reasons that dryer spins should be priced at about 3 times what the national averages are today; not the least of which is
10 minutes of combined gas and electricity are worth MORE THAN A POSTAGE STAMP!!