Pricing Yourself Just Right

Good morning Wash Weekly Family,

One way you can expand your garment care business is by offering commercial laundry services.

You may remember I touched on this back in issue three — and shared a CLA survey that found only 31% of laundromats offered commercial laundry service.

Today, we’ll go over the nuances to consider when pricing your commercial laundry service.

The first step is to know what questions to ask.

This will help you know more about the items your prospective commercial client wants to be serviced and how to price them.

Here are a few questions to ask:

1. What services do you need?

   1. Wash and fold

   2. Dry cleaning

   3. Wash and press

   4. etc.

2. Based on the services they pick, ask some deeper questions, such as:

   1. Do you need it packaged a certain way?

   2. Do you need it folded? If so, how?

3. What type of garments do you need to be serviced?

   1. Towels

   2. Blankets

   3. Rags

   4. Bedding

   5. Aprons

   6. Lab coats

   7. Uniforms

   8. etc.

4. What are their pick-up needs?

   1. One a month

   2. Every other week

   3. Once a week

   4. Several times a week

5. Distance your team will travel for pick up and deliver

6. What turnaround time do they need?

   1. Next day

   2. Same week

   3. At the next scheduled pickup (this is the best for logistics and cost)

Side Note: Make sure to consider all the detergents and other agents you’ll need to clean the garments they choose and factor that into your pricing.

Asking these questions will give you a sense of how much work and supplies are needed to fulfill the order.

Next, factor in the prep and work you and your team will need to complete.

Here are a few examples of what I mean:

1. Folding

   1. Basic fold you can do quickly - $

   2. Special fold unique to their account - $$

2. Fold & Press

   1. Additional time and labor - $$$

3. Pack Separate

   1. The client wants uniforms sorted by person and packed in special packing for each employee - $$$$

Don’t be afraid to charge according to the amount of work you and your team will do.

Pricing Discounts

“But Waleed, what about discounts?”

Some people give discounts when the client provides a large volume of items.

While I agree with this to a point, I typically don’t give discounts on volume

I consider giving discounts for time and amount (pieces and lbs) commitments.

Yup, time!

I would rather have clients who consistently provide us with garments to clean over a longer period of time.

Doing so provides a more steady source of income.

Pricing Add-ons

You may want to consider some add-on pricing, such as:

• Minimum piece or weight amount: consider a piece (for dry cleaning) and lb minimum for every pickup. Just make sure you negotiate the minimum and fee in advance. This will help cover any loss you incur for the pickup.

• Bag replacement cost: this is good if you provide laundry bags and they are not returned during pickups.

• Missed pickup or drop off: a fee if no one is there or the business is closed during the agreed-upon pickup date.

• Expedited service charge: an additional cost if the client needs the times returned faster than the regular timeframes.

• Heavily soiled charge: a set cost when the garment exceeds the original soiled amount and causes your prices to go up

Lastly, focus on your mentality.

Please do not fall into the trap of not charging what you, your team, and your service are truly worth.

Let’s talk about how to avoid this trap:

1. Know your costs to do 1 lb of laundry.

   1. Break down all your costs for wash and fold and calculate what that breaks down to per lb.

   2. Consider labor, electricity, water, soaps, bags, softener, sock straps 😁, rent, mortgage, transportation, advertising, professional fees, reimbursements, refunds, insurance…the list goes on and on.

2. Determine what your profit margin has to be

3. Add your profit margin to your cost per lb

4. This is the real and accurate price to charge that commercial client

Now, even if you do offer a discount, you will know your exact break-even point.

Pricing is important. If you don’t price it right, you will be killing your business slowly.

Death by a thousand paper cuts. 😬

Airing out some not-so-dirty laundry every Sunday!- Waleed 🏴‍☠️

RESOURCES

• Favorite Commercial Clients List

• Wash n Fold Sock Presentation

INTHE NEWS

• SoftBank-backed on-demand laundry startup Laundrygo picks up $37M Series C

• Laundry Tech Company Juliette acquires new Manhattan facility & discovers new traditions

• Room Service Laundry acquired by Rinse

• 'Found Money': NJ Operator Taps Rebates for New Equipment

EVENTS

• Optimize Your Profits in 2023 with Industry Marketing Coach Dave Coyle of Maverick Drycleaners - January 18, 2023 @ 1:00 pm - 2:00 pm EST

• For New Investors: Getting Into the Laundry Business - December 12 @ 11:00 am - 12:00 pm CST

• NCALC 2023 Winter Meeting - January 27, 2023 - January 29, 2023

QUOTE OF THE WEEK

Chase the vision, not the money; the money will end up following you.-Tony Hsieh