Raising prices

[Jefflange]

At one of my mats I am in a very competitive market. All the mats around me are still charging 10 min per .25 on dryers. I am dropping mine to 8 minutes at the end of the week. Its funny how out of all my competitors I think I have the lowest operating costs but they charge the same or less then me on washers. I have no equipment loans and no mortgage on my propery. I know all my comps. are paying high rent. It seems no one goes out of business, the mats just change owners. This is truly a strange business we are in. I think alot of people like to work for free or loose money.

[mbe_inc]

There are many ways to give back to the community. Although I can think of a few better ways to do so.

-Tom

[Adamski]

Jeff,

I'm just putting the finishing touches on my small/medium washer rehab project. When I reinstalled my 10 Maytag toploaders (down from 19), I increased the price to $2.50 (up 25 cents). I also replaced ten 18 lb Dexters with five 20 lb Huebsch washers ($3.00) and added eight 30 lb Huebsch washers ($4.00).

Larry /ubbthreads/images/graemlins/cool.gif

[Automat]

Have you tried actually going face-to-face with your 'competitors' and having a friendly discussion with them joining you in making more money ?

Each time it has worked remarkably well for me.

If anybody posts a comment about price-fixing, I refuse to address such stupidity - Free-will and individual discussion is just that.

[Harper]

Larry,

I assume the reason your top loaders are priced so aggressivly is to urge customers to jump to the front loaders. I just raised mine to $1.75 with hopes of achieving this. Also, less wear, tear and maintenance on the tops. It looks like I'm about .50 cents less than you on all my front loads. I will probably wait till mid-year to do an increase on the fronts.

[MatNapper]

people that price aggressively are more determined to make good cash flow - my tops are 2.95 - going to 3.05ish or more soon - it's not 1950 anymore - we over analyze the pricing much more than the customers do

[BMWHD3060]

[ QUOTE ]
people that price aggressively are more determined to make good cash flow - my tops are 2.95 - going to 3.05ish or more soon - it's not 1950 anymore - we over analyze the pricing much more than the customers do

[/ QUOTE ]
WELL SAID.

I AGREE, most of the time the owners have more FEAR, than the CUSTOMER.

[MatNapper]

It's the same reason why most of the people in this business charge a quarter for a dry. Because customers demand it? No because most in the business have told them that's the way it's supposed to be - WRONG. Create your own reality and cash flow situation. Price for profit and don't compare yourself to loser competitors no matter how close they are. People want safe, clean and bright - not cheap crapholes.

[supersuds]

agreed - another good post I saw on pricing and "Free"...

http://laundrycapitalist.blogspot.com/2008/04/free-dry-clowns.html

[epic02]

Jeff,* Im in a simular situation,* I don't know how some of them are staying in business or even making a profit* when there prices are less then mine.* Most of the mats around me are always being sold year after year.* Yesterday I walked into a mat that has just been sold* I notice they had all the lock boxes out of the dryers giving customers free dry. I wonder how long that's going to last.* *
Kenny* ..

[Adamski]

Harper and All,

My current thinking about toploaders vs small frontloaders is that there should be no more than 50 cents (20%) difference in vend price between them. While toploaders hold about 2/3rds as much as an 18 - 20 lb frontloader, the baskets are virtually the same size and customers fail to consider that toploaders should only be loaded 3/4 full leaving 1/4 of the basket empty. Also, many customers don't realize that they can load frontloaders all the way to the top of the basket. So often the customer sees no advantage to paying 30 to 40 percent more to use a small frontloader instead of a small toploader.

From an owner's point of view, the small frontloaders are more efficient and my customers only tie up my new Huebsch 20lb frontloaders for 18 minutes whereas they tie up a toploader for around 25 minutes. This means that frontloader becomes available for the next customer 7 minutes (28%) sooner than the toploader does. Therefore, fewer frontloaders must be purchased to meet my customers' needs resulting in a reduction in equipment costs. Also, some customers choose the Extra Wash option on my frontloaders which causes the washer to run for 23 minutes but I'm getting an extra $1.00 added to the base price so this is still a better deal for me than renting toploaders at $2.50.

I'm finding tons of things to like about my new Huebsch washers. It looks like my customers (some of them) will actually pay $1.00 for the Extra Wash or Extra Rinse option which is only available with the optional A Micro controller. I think customers who use just the basic cycle like the speed of a F A S T (18 minute) cycle. I like the programmed Blankets and Rugs cycle which includes a very delicate 3-12-3 tumble action (3 second tumble, 12 second pause, 3 second tumble, etc). This cycle should help prevent rubber backed rugs from disintigrating in the washer.

Larry /ubbthreads/images/graemlins/cool.gif

[MatNapper]

Veterans,

I'm starting to think that customers don't pay much attention to the prices but if any machine - they seem to notice the dryers more??? They don't shop washers to know if a 30 pounder should be $4 or $5.50 - but do they remember the quarter for a spin dry they've always gotten??? I've actually never heard a customer say this I'm just wondering if you guys think dryers are more noticeable to customers because of the lower price tag per spin - or as it seems with most people are there they wash dry and skiddadle. My dryers are 45 cents a spin now 8 minutes heat. No back lash because my customers are used to it.

I guess what I'm asking is do you guys think customers notice dryer prices more than washer prices?

Good luck with the rest of the month -

[tknc]

Guys,

So I get raising price for the toploader is a good idea. Here is my dilemma, I am about to close on a store in 3 weeks. The store still has the top loader price at 1.50. Another store 2 miles out had already set the price at 2.00 early this year. Should I ask the seller to raise the price before I takeover? Or should I do it after I takeover the store? If I am going to change it right after I takeover the store, I am worry the customers might think the new owner (me) is trying to get their money asap. How should I approach this situation? My friend is also worry about this will chase away existing customers if we raise the price. But I know going from 1.50 to 2.00 will boost net right away.

thx,

[Steven04]

[ QUOTE ]
I guess what I'm asking is do you guys think customers notice dryer prices more than washer prices?

[/ QUOTE ]

It appears that way, last time I changed dryer prices some customers complained, but a year later when I raised washer prices no one said anything.

[Thedep]

I agree. I have had my mat for a little over 7 months and have raised prices 3x for different machines. One of those were the dryers. Had a lot of complaints over that one. went form 10min to 8min. When you raise the top load prices you affect their users, same with any other washer, but when you raise your dryers everyone gets the opprotunity to complain.

[tknc]

So you all think it really doesn't matter who or when we change the top loader price?

thx,

[BMWHD3060]

[ QUOTE ]
So you all think it really doesn't matter who or when we change the top loader price?

thx,

[/ QUOTE ]
I have raised My Top Loader Prices Twice this yr alone, I'm now 25cents more for a 18lb front loader over my top's price, ($2.25 for my top's, & $2.50 for my 18 lb front) after my second increase, I have noticed more turns per day on my front load machines & less on Top Load machines.

[Automat]

[ QUOTE ]
'm now 25cents more for a 18lb front loader over my top's price, ($2.25 for my top's, & $2.50 for my 18 lb front) after my second increase, I have noticed more turns per day on my front load machines & less on Top Load machines.

[/ QUOTE ]

I have the same situation, only .25 c more for my 18lbs.
18lbs now average slightly more turns.
I'd much rather have that, as they use 40% less water.
I'm actually thinking of raising my tops to the SAME price.

Wonder what effect that would have...
Anybody ever tried that ?

[Jefflange]

I charge the same for my tops and 18's for the past 2 years. The diehard top users will still use them because in their minds the tops are better. The cheapos who before would overstuff the tops to save a quarter now use the 18's. I may raise my toploader a .25 over the 18's.

[Automat]

[ QUOTE ]
I charge the same for my tops and 18's for the past 2 years. The diehard top users will still use them because in their minds the tops are better. The cheapos who before would overstuff the tops to save a quarter now use the 18's. I may raise my toploader a .25 over the 18's.

[/ QUOTE ]

Thats great to know.
What is your ratio of equipment ? (e.g., how many tops, how many 18lbs)
Are your nearby competitors offering the same, if not, is there a unique situation that allows that to be successful for you ?

[gnote]

I raised my top loads to 2.50 (from 2.00)and my front loads to 2.00(from 1.75)
The reason that a top load uses more water .The custmers are using the front loads more now..... saveing me energy costs.

[moe19x]

In the last 6 months i raised my tops from 1.75 to 2.00 and my 18lb fronts from 2.75 to 3.00. All the other laundromat in towns offer the tops at $2.00 im only down to my last 4 tops but i would love to raise them a bit more to have people use the fronts.

[Thedep]

My tops are all 1.75. The other mats in the area are anywhere from 1.00 to 1.50. My closest competitor does not have any, all front loads (smart guy). I would love to go to 2.00 or even 2.25. since I am the only decent mat in the area with tops. but I think there is a mental block going from 1 to 2 dollars.

[Adamski]

Thedep,

Never follow a fool to his demise. If your competitors charge $1.00 - $1.50 for their toploaders; ignore such foolishness and set your own course to profitability. If you feel your toploaders should be $2.00 or $2.25 then change them now. Delaying accomplishes nothing.

Larry /ubbthreads/images/graemlins/cool.gif

[Jefflange]

Its been 1 week since the price hike and all is well. A few complaints from the regular complainers, I was hoping the price increase would get rid of them. Lets see if any of my comp gets on board and raises.

[chris2565]

second month for me after price increase, first month was good but this month has fallen off about $450.00 from this time last month. starting to look like bad ideal.

[Thedep]

[ QUOTE ]
second month for me after price increase, first month was good but this month has fallen off about $450.00 from this time last month. starting to look like bad ideal.

[/ QUOTE ]
No way. Everytime I have raised prices I had a drop off but my bills came in much lower as well, making up the difference and then some. And they will be back.

[chris2565]

well i guess in my case it is because there are so many mats near me that are much cheaper. i dont know but it isnt looking good.

[Thedep]

I see you recently purchased two mats. I bought mying Sept. 07. The previous owner was well liked and I lost some business when they realized he left and there was a new sheriff in town that got rid of the 10 min. dry and the "everyone gets a refund no matter what rule" Most are back now. The advice I got here was keep it clean, the machines working, be fair, and never lower your prices once you have raised them.

[Adamski]

Chris,

I've raised my vend prices many, many times over the past 39 years in the business. There were a few times when customer acceptance was weaker than I would have liked. On those occasions, I would take a hard, critical look at my laundromat and find an improvement that I could make that would help my customers accept the price increase. You can't go wrong improving your laundromat.

In all those years, there was only one time when I had to roll-back a price increase. About 10 years ago I raised my pop to $1.00 and sales plummeted so I had to reduce that price.

I hope this helps you. Don't be discouraged. You've shown you have guts; now you need to follow through with a noticable improvement.

Larry /ubbthreads/images/graemlins/cool.gif

[Duane]

Chris,

Don't look at your gross and make a decision on your price increase. When I raise prices my gross has gone down, then eventually it comes back and then some. It is your expenses that you are controlling with the price increase. Your utilities will go down, your store will stay cleaner, you will lose some of those problem customers, less maintenance needed on the equipment and more room for your customers.

Give it time, you will see.

Concentrate on fixing up your mat and keeping it bright and clean.

Check back in six months.....

Duane.

[BCW]

Duane, I too raised prices recently. My gross is about the same. The reason being that I can no longer keep enough quarters in the changer. I have not deposited any change for weeks. This week I do have a nice build in quarters once again. The fall off in gross after a price increase is merely an increase in the amount quarters that you need to keep on hand. It builds back up eventually.

Tom

[Duane]

Quarters? Nah, I just knew my gross went down a little bit when I checked the totals from home on my card system. My graphs had a slight down turn, but in time my net had the up turn.

Duane.

[Thedep]

I agree. Raising prices keeps out the riff-raff. I had a lady in the store a few weeks ago asking me why I dont give free drys like the store a few miles away. I asked her why was she here if that is such a great deal. Her response..."its kinda messy and some of his machines are not working." You get what you pay for. The guy with the free drys..I dont like to walk in there without a gun. Nothing but trash. I will take a mat with nice pace over a packed mat with complainers any day of the week.

[Harper]

I raised my front loads before thanksgiving... dryers about a month and a half ago... and tops about 2 weeks ago.

Do you guys usually do everything all at once or do it in stages?

[Steven04]

I raise dryers one year or washers another year, so my customers have less shock when they find out. I don't know, maybe its better to raise all at one time...

[Adamski]

Harper,

I think a little sensitivity when raising prices is a good thing. Consider the following: If I raise my toploader price, it costs my toploader customers more to do their laundry. My frontloader customers are not affected at all. If I raise my dryer prices, however, both my frontload and topload customers will pay more to get their laundry done. Nobody is unaffected by a dryer price increase. Perhaps this is why we hear more complaints when we raise our dryers. If I raised all of my washers and dryers at one time, all of my customers would have 2 price increases to deal with - one on their washers and another on their dryers.

So, to answer your question (Do you guys usually do everything all at once or do it in stages?) I think few laundromats raise everything all at one time when instituting a price increase.

Larry /ubbthreads/images/graemlins/cool.gif

[Howard]

I have a hard time noticing the impact of price increases on volume as I am constantly raising prices by a few cents at a time on any given size of machine. Might raise dryers one or two cents again next week.

[Jefflange]

Howard,
Post ur prices, they may inspire others to raise.

[BMWHD3060]

[ QUOTE ]
well i guess in my case it is because there are so many mats near me that are much cheaper. i dont know but it isnt looking good.

[/ QUOTE ]

WOW, We are our own worst enemy, (we freak out as owners) if we raise our prices?
When we raise prices most of us do it a Quarter at a time, what other business that you know of Raises prices by as little as a quarter?
I just went into my favorite breakfast place this morning and guess what they raised their prices $1.00 for the daily breakfast special a DOLLAR Not cents, or a Quarter,
ONE DOLLAR, all I asked was, did your food bill increase in price, he said yes, & I was fine with that.
I'm surrounded by SIX other MATS (within 1&1/2 miles) & they ALL have LOWER prices than me, All but one store is Larger than mine, my store is paid for in full & I charge the most for my services.
I do keep it VERY CLEAN, ALL machines work, & paint often. I know my profit margin is more than any store around me, my ROI is almost 48% per month.

[Adamski]

Mike,

Just how "price conscience" are customers anyway? All of my competitors have lower prices than me - some substantially lower. Yet, today, I had more customers than any of them. Some days, I have more customers than several of them COMBINED.

We must charge enough to make a reasonable Return on Investment and then make our facility WORTH WHAT WE CHARGE. To do less is flirting with failure.

Larry /ubbthreads/images/graemlins/cool.gif

[Jefflange]

Its easy to raise prices when your competition is dumps. It is a different story when you are in area where there are brand new megamats all around you charging prices you were charging 10 years ago. In the NY tristate area, the area is saturated with new mats charging low prices. I hope one day to see these mats go out of business, but it amazes me how they hang on.