how to price your wahsers ?

[Ryano23_98]

how do you price you washers ? i have a small laundry with 27 tops $1.25 and 5 SQ#25 $1.75 thinking of taking the #25's to $2 i have 4 more to put in and 4 SQ35what to price them ? to put in soon new (used) dryers of beening put in right now . i'm in a mid size town with 3 laundries top right $1 at one and $2.50 on #25 and 3.25 on 35's

[Neil]

When it comes to pricing, you need to take into account your competition and how close they are. If the other mats are close by, you have to decide if you have a competitive edge that will allow you to price a little higher (cleaner mat, newer machines, Air Conditioned mat, etc.) If you have no competitive edge, you are best to match the price. If your competition is a good distance away, you may be able to charge slightly more.

[CharlieS]

Exactly!

The first key is to know all of your competition. Go into each store and make notes of machine sizes and pricing. Compare their store to yours.

To some degree, customers don't seem to care as much about condition versus pricing. In other words, a better store won't justify significantly higher prices. It may, however, generate more business.

My goal is to have the best stores in the market, at the highest end of the price range. However, I must admit that my third store is seen as a value store, and was such when I bought it. Although I have made it more attractive, I have left the prices alone, which were not low, just not as high as my other store. It does have Gen4 equipment, but also has another mat literally next door, at exactly the same pricing, with Gen3 equipment. I really can't price this one any higher.

And never, never, decrease prices without an overwhelming compelling reason. It is almost impossible to make up the loss with volume. The last thing you want to do is create a price war with other mats.

Finally, do not, ever, never, discuss pricing with your competitors.

Charlie

[BKB]

"...do not ever discuss pricing with your competitors" BECAUSE????? Please explian your reasons for this statement,
Charlie.

[MichaelCa]

Charlie: I remain in apoplexy regarding your comment.
Did you come to this conclusion through bad experience ? - or is this just a statement of principle.
(FYI, i have not done this - yet; but i've been about to do it - i'm in a neighborhood with Mats every 3 blocks)

P.S. I respect your opinion, so my question is genuine.

[BWJR]

I have the same question. Why not go up in price with your comp? If you have a good relationship with your competitors, going up in price together seems like a good idea. One that I have tried to use for over 20 years. Gas Stations seem to make it work every day.

BWJR

BWJR

[CharlieS]

Its a very simple thing called anti-trust law. It doesn't just apply to Microsoft and AT&T.

Colluding with your competitors, even in a local market, to agree on pricing, IS ILLEGAL. Every heard of the Sherman act?

That doesn't mean that you can't be aware of your competitors price, or to respond to a competitors price increase with an identical increase. You just can't do it by agreement.

If you have gas stations on opposite corners, both will usually find that a gas war is a lose lose deal. The result will inevitably an easing of prices back to norm, and a tacit but unspoken agreement not to eat each other for lunch. When wholesale prices move, both move.

And guess what, it doesn't have to be the government that brings suit against you. Anyone can do it, and they will also receive triple the actual damages. In other words, the judge takes the jury verdict, and multiplies it by three. Great local class action suit stuff.

This is also a criminal act. And doing it with a competitor could be considered a violation of RICO law, in effect, organized crime.

Knowledgeable is OK. Explicit agreement is not.

Unless of course you sell oil as part of OPEC.

Charlie

[JBTcajun]

Would this conservation be illegal?
Mat owner a
Mat owner b
Mat owner c
All acquaintances at a distributors show with facilities in the same area.

A hay this equipment is sure skyrocketing.
B Ya well it ain't keeping up with the price of gas
C Don't talk about gas when the city went up on sewer 12% in the last 6 months.

A I think I will Bump my prices .20 this evening. Sure love the card system.
B You know that doesn't sound like a bad idea.
C Well I think .20 is a bit much my clientèle will gripe I am doing .10 tomorrow and .10 in six months.

A You probably have a good Idea there C. No need to make them figure a way to get their own equipment.
B. You guys got it going on.
C. Ya well I am waiting on this new equipment.

Then in the morning A, B, and C go up a .10 across the board. Was that price fixing. Or was is open discussion of the industry?

[MSKLAUNDRY.]

While in principle it might be illegal, (not you JBT) I would say that the Govt would have to find that they all didn't have "just cause" for all the laundries raising the price together, and that price would have to be unreasonably higher than "normal".

Case in point:

In an area where I service several competing laundries I got sick of hearing that everyone is hurting from the rise in utility cost that I arranged a meeting of all the owners in that area. Kinda like OPEC, LOL. In this meeting they decided that they where not going to absorb the cost of doing business any longer and rather than give away services for very little or in some cases no profit it was now time for the consumer to absorb these costs. Now you have to understand that these are places that are charging...

50 cents per pound drop off
1.25 18#
2.50 35#
3.00 50#

The consumer has gotten a great deal up till now. Its time they pay properly for the services offered. So now the prices are more what would be in a non competitive enviornment...

1.50 to 1.75 18#
2.75 to 3.00 35#
4.25 to 4.75 50#

Note: No specific prices where agreed upon at the meeting but all agreed upon a range of where prices should be according to other laundries outside there immediate area.

Now if this is against the law then so be it. To these owners it is just a matter of staying in business.

[CharlieS]

This is a light of day question. When the full discussion is exposed for all the world to see, what will it think? Even more relevant, what would the jury think if they saw the entire conversation on videotape?

I prefer to run by the book. I report all of my income and take every legal deduction. I would love to have these types of discussions with my competitors, but won't.

Several years ago, we had a major drought in our area, and all the laundromats were asked to come to a city meeting about water conservation.

I called every mat owner. Most had not even heard about the meeting, only a few were aware that water rates were being doubled. At the meeting, several owners started the rates type of discussion. I will admit that I suggested that they not discuss the subject, in fact, I pretty much insisted that they not, but did openly discuss the fact the water rates were increasing significantly, along with gas rates. Every owner increased their rates that week. However, each chose his own new rate (and they were different from each other). The one thing that was achieved was a general understanding that expenses were going up significantly, and many owners made the statement that they would have to increase their rates.

It was comfortable knowing that most owners intended to increase. However, we did not mutually agree on rates, each choosing our own.

Charlie

[Anonymous]

We have a new competitor coming into my market and I explained to him that since he will have the newest and biggest store with the highest costs that his prices should probably be the highest in the area. Not sure how he plans to make any money after paying over $250K in sewer impact fees and having almost no parking available on a street that is highly congested.

I explained to him that if he wanted to compete on price I would be glad to offer six months of 50 cent washes as my marketing promotion. He assured me he plans to enter the market in an orderly manner.

I really don't think my discussion had much to do with his planning. Another owner talked to him and told him that if he came in lower than anyone else there might be a robbery attempt in which the owner would be killed.

[BWJR]

Raising prices is done by competitive shopping all the time. K-Mart, Wall Mart, etc. Gas stations are the kings of raising prices all the time. Have you heard of anyone ever bringing a law suit against any of these companies, and don't tell me that these owners don't talk about these planned increases ahead of time, because I know for a fact that they do. An informal agreement / suggestion with you comp that it might be time to increase prices is not a violation of the Sherman Anti Trust Act. I believe you may be streatching the letter of the law somewhat. We are not the criminals if anything our pricing as an industry has not kept pace with the increases of our by-products to include rent, nat gas, electric, water, insurance rates, etc., all of which are controled and manipulated by our government. We are not talking here about 50-100 owners getting together to increase prices in an entire market place. When the News says that there is going to be a shortage of corn this summer because of the weather, the next day all the food stores raise there price of corn. Who is breaking the law there? The FCC doesn't seem to think it is a crime or unethical to contribute to the inflated price of corn. Please don't think that this method of price fixing is by accident. By the way I never said it was an explicit agreement with any competitor.

[MSKLAUNDRY.]

FTC not FCC. The FCC are the bozos that control our airwaves, lol.
Has anyone checked there phone bill. Weren't we told that competition would effectively lower our bills, yeah right!!!

[BWJR]

No, Marc I mean the FCC in regards to the TV and Radio embelishing the shortages of things like Milk , Food items or gasoline.

BWJR

[BKB]

In addition to my laundromat, I own rental properties and I constantly shop and out price the competion. I discuss prices and brag about how we outshine the competition. I make no apologies and am smiling all the way to the bank...Hey, this is America and if you don't want to do business with me, go to the dump/ or the slum buildings around the corner where the cockroaches and derelicts meet! Enough said about price controls!

[pete f]

I noticed a mat that has been re-done in my market area offering 50 cent washes! I checked the place out, same old stuff but has been prettied' up. I will call the owner next week if that sign does not come down.

[Neil]

I can't quote the law but I know there is a law forbidding pricing under cost except for very rare exceptions such as grand openings, etc. and it is allowed for a very short time. If you can prove that 50 cents is under cost, you may be able to file a complaint.

I used to run gas stations and I NEVER spoke to my competition about price. I was required to check the three nearest competitors every morning to see what their prices were and if they both went up, I would do the same. We always marketed ourselves 1 cent cheaper than our competition. I never discussed this but they got the picture and they knew that by going up a cent or two that I would be right behind them.

You may perceive that your gas stations are talking to each other but it is a business with tight margins so most of them check competition daily and just try to follow each other.

[CharlieS]

Exactly, and that is totally legal. I routinely shop my laundromat competitors for pricing and also my rentals. This is completely acceptable and expected. The difference comes when it is by explicit agreement. Even between two competitors, it is illegal.