From Winstons to Washing Machines…

By Bob Nieman | Mar 05, 2010

For 10 years, Pauline John has been in the mail-order cigarette business in Salamanca, N.Y.

And, for 10 years, the state of New York has been looking for ways to collect taxes from her – taxes that she claims are unfair and might even put her out of the mail-order business altogether.

Sound familiar, laundry owners?

“It’s kind of a can of worms,” John said. “I’m a member of the Seneca Nation of Indians, and those owners of Native mail-order cigarette businesses have had a running battle with the state of New York.

“Our treaty says we will not be taxed, and this was signed by George Washington,” she continued. “Now, they are trying to say, ‘Well, that’s not what he meant.’ It’s been a gray area, but we’re still operating. They haven’t been able to shut us down legally.

“However, the entire 10 years I’ve been in operation, the state has tried one thing after another to shut us down. At one point, they went after the credit card companies and finally ruled that Native American businesses could not accept credit cards, so now it’s strictly checks unless I wanted to open an offshore credit account, which is a lot of hassle.”

Given the instability of her mail-order business, John, about five years ago, began looking for another business to supplement her income. And she decided upon opening a self-service laundry.

“Not knowing if we were going to be shut down, I wanted to have another business so that I wouldn’t all of a sudden be left high and dry,” she explained. “I’ve always thought that the coin laundry business would be a good way to go, because people always have to do their laundry. It’s somewhat recession-resistant. People have to have clean clothes.

“Plus, there are no major labor costs, as the customers do their own labor.”

In addition, as John delved further into researching the idea of opening a coin laundry in Salamanca, she realized that there was a strong need for such as business, since the area was currently being served by only a few, smaller stores.

Finding a location for John’s new business venture proved easier than one might have expected. In fact, her laundry site was right under her nose.

“The laundromat is located on the same site where my mail-order business was originally based,” John explained. “I had rented this property for the mail-order business; however, I relocated that to another building, and I bought this property and the building that was here. Then, I tore down the old building and started from scratch with a brand new building more conducive to a coin laundry. I own the land and the building, while my mail-order business in now located in another building across town.”

The site is surrounded by a solid mix of residential properties and other small businesses.

“This spot has always been commercial,” John recalled. “I remember when it was a bike shop. And then a lady used to grow flowers here and sell them. It’s had several businesses over the years.”

John’s neighbors include a drug store, a nursing home, a supermarket, an ice cream shop, an auto repair business and a large park – as well as the massive Seneca Allegany Casino & Hotel.

However, as it turned out, building the new self-service laundry wasn’t as simple as choosing its location. Inclement weather and infrastructure issues held up the project by more than six months.

“At first, we were shooting to open by December 31, 2005, so it would be beneficial come tax time,” John admitted. “But we didn’t make it. It snowed too early in the season.”

During that winter, the contractors had to hold off on installing the plumbing and pouring the concrete floor until spring arrived.

The next opening day deadline was April 2006, which also came and went with no new laundromat in Salamanca.

“We were supposed to open in April,” John said. “But, on April 1, April Fool’s Day, coincidentally, we had a major flood in the store. I had a brand new building, brand new everything. And, one morning, there were 18 inches of water throughout the whole building.”

The water main, which John noted had been secured improperly, burst and filled the store, once again setting back John’s grand opening – this time until July.

Finally, on July 19, 2006, the $700,000, 4,248-square-foot construction project was complete – and PJ’s Laundry was open for business.

“We have a strong regular clientele from Salamanca and the surrounding communities,” John said. “Once they start coming here, we’ve got them.”

What’s more, PJ’s Laundry attracts a good deal of year-round tourist business. The Holiday Valley Ski Resort is just 10 minutes from the laundromat in nearby Ellicottville, while Allegany State Park is right at the edge of town. About 20 percent of the store’s business comes courtesy of the local tourist trade, according to John.

“In the winter, we get the skiers, as well as those from the bed-and-breakfasts who come over to do their laundry,” she said. “And, in the summer, we have a park full of campers, and they come in all summer long.”

Also during the summer, Salamanca plays host to the annual Veterans Pow Wow, a cultural extravaganza of traditional Native American themes, featuring drum and dance competitions, traditional Native American cuisine, and handmade arts and crafts.

The Pow Wow has certainly been a boon to John’s business. In fact, when PJ’s opened in July 2006, the store’s very first customer was a Miccosukee Indian from Florida who was in town for the three-day event.

Beyond its touristy location, PJ’s also attracts customers with its array of larger equipment.

“We have bigger machines, so when people have big loads to do or they want to do their bedding, comforters or sleeping bags, they come here,” John said.

The store’s clientele is a mix of whites, Hispanics and Native Americans, who live either in single-family homes or the low-income housing just blocks from the laundry.

“This city is located on the Seneca reservation, but just a fraction of Native people live here,” she said. “The reservation is 40 miles long. Most live outside the city in Jimerson Town.”

To attract as many customers as possible to PJ’s, John advertises in the annual vacation guide for the state park, as well as in publications put out by the ski resort. Also, about once per quarter, she’ll run an ad in her local newspaper.

“Basically, it’s mostly word of mouth that drives my customer traffic,” added John, whose laundry is open from 7 a.m. to 10 p.m. daily. “We’re right on the main drag through town. Sometimes I’m surprised by the number of people that can squeeze in here.”

In fact, to relieve some of the bottlenecks that can occur on the weekend, John has implemented a “Discount Wednesday” promotion, where she rolls back her vend prices by 50 cents on all of her machines on that day.

“We do a good business on Wednesdays now,” she said. “And because all of my machines are networked, I just had to program it into the system, and now at midnight on Tuesdays the vend prices automatically change.”

In addition to a strong walk-in business, PJ’s Laundry also does a good deal of commercial account work – and that segment of the business is growing, thanks to the nearby casino.

“I had put in a bid with the casino to do their towels, bedding, washcloths, hand towels and other linens,” John explained. “I thought I was going to get the account, too. After all it is my tribe’s casino. However, another company came in at the last minute and submitted a quote that was lower than mine, and they got the account.”

But things have worked out for John, because the laundry service that won the casino account is based in Batavia, N.Y., which is located about an hour and a half away. Apparently, the distance can become quite an obstacle, especially during the winter months.

“You know about Buffalo weather,” John said. “Well, we’re 50 miles south of Buffalo, right in the snow belt. So, a lot of times the laundry service has trouble getting back and forth to the casino. When this happens, the casino will call me – and I’ll do whatever they want.

“They know I’m right there in their backyard, so I would never have to skip a day. I can do their laundry every single day, and they’re starting to bring me more and more business.”

PJ’s also does laundry for some of the area’s summer camps, as well as many of the smaller hotels and bed-and-breakfasts nearby.

“The hotel business has picked up quite a bit since the casino opened,” said John, who estimated that her commercial accounts represent about 10 percent of her overall business. “The overflow from the casino’s hotel goes to the smaller hotels in the area.”

Moreover, PJ’s does a healthy residential wash-dry-fold business, along with drop-off drycleaning.

“We charge 89 cents per pound, and we have a couple of customers who will bring us anywhere from 80 to 150 pounds of laundry,” said John, who employs four part-time attendants. “And, with the casino, most of their 500 employees have to wear suits, so that is good for our drop-off drycleaning. We’re always doing suits.”

The 4,200-square-foot facility also features a couple of soda vending machines, a crane game with prizes, and free Internet access for customers.

But John’s biggest ancillary profit center is a 400-square-foot “Corner Store” located in the laundromat, where she sells snacks, drinks, cookies, popcorn and tobacco products.

“There is a school two blocks away, so we get the kids in here all the time,” she said. “They all get their slushies and snacks here after school. Also, many people come to the reservation specifically to buy cigarettes because there is no New York state tax on it – so we get that business, too.”

John noted that the majority of her business skills were gained by working as a bookkeeper for her tribe.

“I’ve been a bean counter my whole working life, so I know how to keep a set of books,” she said. “In fact, I gained a lot of my business experience at the Seneca Nation.

“I’m a hard worker, and I’m here all the time,” she added. “I mingle with the customers. I like to talk to them. A lot of them know me by name now; I’ll be out in the community, and people are always coming up to me and calling me by name. I like it. It makes me feel good.”