View Full Version : Free Dry
2 of strores in my area start free dry,no body follow.I am so glad.
I have not been in Chicago for a few months,I was driving in Chicago yesterday,I found a lot stores offer free dry,it is a sad thing in this biz!
Free dry has been in south side Chicago area for more than 10 years,now a lot store in north side are offering free dry.I don't
believe anyone can still make money in that market by offer free dry,what do you think?
Anonymous
10-06-2002, 12:44 PM
When you offer your service for free you are telling customers what the value of that service is. Free dry is about the stupidest thing anyone in this business can do. The only way it can make sense is if you are big enough that you can use it to drive all the competition out of business and then raise your prices. Oh WAIT, that is illegal I think :)
anonymous
10-06-2002, 04:18 PM
I super-agree with Kirby. Especially in a northern market where the air coming into the dryer is moist, and the air is really cold for many months of the year. How do these folks stay in business? Is this one of those situations where someone needs a tax write-off? Sounds Dumb and Dummer to me.
Howard
10-06-2002, 08:25 PM
Free dry makes sense. So does free washing. Providing, of course, that you are in Las Vegas or Reno and offer slot machines.
In a more serious mode:
My experiences with "Free Dry" has been that it starts with a distributor building a store to sell equipment. The distributor offers free dry to build a customer base, which he then projects, at full pricing, to be the potential of the Laundromat. So far, the guys in business around here have not followed suit and the few distributor sold stores have collapsed on themselves. Eventually, they will be good buys.
I don't know how they stay in biz,I don't know any laundry owner
offer free dry but they are more and more store offer free dry in Chicago area.I don't know why.This winter gas may increase 30%......The Gas increased put a few stores out of biz 2 years ago,it may happen again.
I don't agree with free dry but the only way you can make it work is do the math. Charge more for wash. I don't do it because that is not how my market functions. Mcdonalds does not directly charge for coffee cream, they build it into the price of the coffee or other goods sold.
Do these stores have a higher wash price than usual? I would guess not because these people who are doing this don't appear to me to be very clever.
anonymous
10-07-2002, 09:00 PM
A long time ago I did the math on dryer profit v. washer profit. Most of you know the answer to that one. Because the dryer profit is smallish, I raised the price of the washers over an 8 year period by 60%. I have been retro-fitting during this period, and the machines I chose have different poundage ratings from the old ones, so part of the increase went un-noticed. Also, people like to use good-looking, shiny equipment.
Currently my washers' profit margin is about 40.25% more than the dryers' profit margin. But the dryers DO make some profit, and the federal government classifies me as a for-profit organization, so by golly I'm not going to go in the hole on the dryers by giving away free dry.
I do give away about 1,000 free pens per year. The customers live for it, and thank me for being so nice to them.
hmmm..(andy thinking) free pens, i should make a note of that, if i could only find something to write with...
Anonymous
10-07-2002, 09:19 PM
Small profit on Dryers? I make a hell of a profit on the dryers. My monthly dryer revenue is about five times what my gas bill is, and I would guess half the gas is used in heating hot water and heating the store. With my high water and sewer rates I probably make a better profit margin on the dryers - and my washer prices are super high. Check your math.
anonymous
10-07-2002, 09:19 PM
I also give away "Family Circus" calendars around Thanksgiving/Christmas as a thank you to the customers for a year's worth of business. They start asking me NOW when the calendars are coming out. VERY popular. I don't order enough for everyone.... give away about 550, so they are quite in demand.
Another "added value" thing that makes my customers feel warm and fuzzy.
Fred50
10-07-2002, 09:23 PM
Bubbles,
Do you have pre-opening and grand opening advertising and giveaway suggestions?
Kitty
10-07-2002, 09:33 PM
Kirby gave me a great idea several months back that enabled me to gain well over 300 count customer list. For around 300bucks we had the laundry bags screened with the logo. Looks great. I am in the process of sending out the "free gift" letter. Each member of the database will receive a nylon screened bag. The customers are gonna love it.......their so spoiled!
anonymous
10-07-2002, 09:36 PM
Kirby --
When I figure profit margin, I look at both variable AND fixed expenses. The dryers take up an incredible amount of floor space for the revenue they generate compared to the washers. Actually, the dryers (including the runway) in my store take up about the same amount of room as the washers, but the washers make 144% more in revenue. Even with higher variable cost for the washers, the fixed expenses are about the same for both. If you could see the actual numbers, it would be clearer. I suppose every mat is a bit different.
anonymous
10-07-2002, 09:44 PM
Mark --
Does your state allow raffles? You could raffle off a TV or perhaps an inexpensive computer system. I saw a mat owner raffle off an inflatable boat (Zodiac Knock-off with no motor) one time. He had it sitting on its side on top of one of the bulkheads so every one could see it through the windows as they drove by. Collected tichets for about 6 weeks, then had the drawing. Went over big with the guys!
Fred50
10-07-2002, 09:59 PM
Bubbles,
You can do just about anything as long as it is "no purchase necessary" and the prize isn't cash. I may try the TV giveaway for the raffle and printed bags for the first X hundred customers, but I'm not sure of how I'll advertise it. I have heard from owners on this board and elsewhere that most advertising is useless for mats.
I am going to put a coming soon sign up as soon as my side of the pkg lot is open and my logo is ready. I got great news today that a prototype McDonald's will be going into my strip that will be corporate owned, so I'm not too concerned about advertising because of the draws that will probably be open before me.
Anonymous
10-07-2002, 10:11 PM
You are correct that you must look at all costs, but in deciding changes you should only be looking at incremental cost which does not include fixed expenses.
As far as space I'm not sure I buy that. A stack dryer takes up about the same space as one washer - a little more than a small washer a lot less than a big washer. I think a stack (2 pockets) grosses me about the same as an 18# washer over the period of a year.
anonymous
10-07-2002, 10:19 PM
Hey -- You got it made in the shade, fella. As long as your signage can be seen from Micky-Ds, you'll do well. I hope you have a longgggggggggg lease!
Any grocery stores in the area with bulletin boards that would let you post a notice to the benefit of "their" customers? Many of our supermarkets have bulletin boards where they post coupons, recipes, etc. LOTS of foot traffic through grocery stores, and it doesn't cost anything to ask.
Fred50
10-07-2002, 10:29 PM
First, sorry to taking this thread in 2 directions.
Bubbles,
Thanks for the encouragement!
-20 year lease!
-A super grocery (80K sq ft) is the anchor and they have coupons on the back of their receipts. I'm looking into that. The mgr of the grocery will let me hand out flyers, post ads,etc. I guess he's looking for some free WDF. I'll give it to him for sure.
anonymous
10-07-2002, 10:37 PM
Kirby --
Have you ever compared washer v. dryer gross per linear foot? On a linear foot basis, my 18# washers gross about 49% more than my stack dryers and my Megas gross about 72% more than my stack dryers. Just a different way of looking at things -- Knocking everything down to the common denominator, so to speak.
Anonymous
10-07-2002, 11:12 PM
I forgot where we were going with this. Its an interesting analysis, but what do you do with it? You cannot replace your dryers with washers because they make more money - you need the proper mix of both. I think the original point was that all the equipment needs to be profitable.
The linear is important though, that is part of the reason I liked the ADC-236, they are slim and I was able to get one more dryer stack in the place where the old speed queen singles were, that helps of revenue per linear foot. I think I put something like 14 stacks in the space where 13 singles were.
anonymous
10-08-2002, 05:50 PM
I think the topic segued into what has a higher profit margin, dryers or washers. No, you can't replace dryers with washers. But owners of older mats can try to maximize the dryer wall.
I keep forgetting that not everyone is in a retro-fit situation like I am. When I started, I had 22 50 lb. dryers: $3k/ 30 day mo. Now I have 39 pockets consisting of 30 stack drums, and 9 - 75 lb. drums: $6K / 26 day mo. I never could have done it without the stack dryers.
At one point, I was discussing dryer revenue with the original owner of my mat when I had 16 stack drums and 16 50lb. drums. The 16 big drums were grossing more than the 16 small drums. The old owner said that it proved the old dryers were a better "fit" for the laundry. He was comparing drum to drum. When I ran the linear foot figures, though, the small drums were outperforming the big dryers six ways from Sunday. Because he was comparing different size drums that were priced differently, he was comparing apples to oranges, and that was why he had never put stacks in the store. As experienced as he was, he'd never even tried figuring things out by linear foot.
I guess the thing is to cram almost as much into available space as is humanly possible. When I see photos of mats with folding tables built into the dryer wall, I am quite puzzled.
pete f
10-09-2002, 06:09 PM
Interesting way of calculating reveune linerer footage..
I am on Kirby's side, I make very good money off my dryers, and you got to have them to have a laundromat. I did not quite understand you profit percenatges on washers. I am sure it all works out in the "wash" he he
9 - 75# drums? so you charge 25 per 4 min vs 25 per 8 min or something to that effect? Do each 75# make as much as a stack? Are they 75# stacks -Cissel?
For you w/d/f?
You income for the 50# 's vs the stack & 75's is not really valid for a dryer point of view, what changes did you make in your washer line up? and what about pricing, then and now? If I ripped out some of my stacks and put in 75# dryers would my dry revenue double? NO.
what brand are the 75#'s?
Senior Sudsy
10-10-2002, 06:43 PM
Back to the free dry...
I can't belive how this has spread in the Chicago area. Some very large operators with multiple locations are offering free dry. It makes it very difficult for the small guys like myself to compete. What can we do?
anonymous
10-10-2002, 09:10 PM
Have a nice weekend, everybody!
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