Natural gas crisis

[Aromaz]

Today I called my natural gas supplier for a quote on a fixed contract. Really bad news! One year - 1.23/therm, two year 1.18/therm and three year 1.13/therm. This does not include taxes or transportation cost. Transportation usually runs .30/therm. It's going to be a long winter. I think i'll roll the dice and see what happens with the gas wells in the next few weeks.

[amartlock]

What is your current price/therm to compare to your fixed contract quotes?

[pete f]

my last bill was around 90 cent a therm. Guess what? gas went up 25-30% when you were sleeping! now what?

I calcualte you need 4.4 cent a min to make what you where making last month, where you were making 3.1 cent a min. I am going for dryers only. It is the least profitable part, so why make it less profitable.

So drop to 6 min from 8 mins.

[Aromaz]

My current price is indexed to NYMEX price witch today is almost 300% higher than last August 31st. I guess my bills in the few months will be incredible.

[tgifbos]

I pay 3 points over the NYMEX so right now my $ per therm is about $1.50 (without delivery charges...) and to think that a year and a half ago I was able to lock in the rate at $0.65 a therm..

about four months ago I raised my vend prices from $0.25/8 minutes to $0.30/8 minutes.. no one really complained because I put a sign up about the increased utility costs..

Now I am thinking of either lower my temps a degree or two and/or lowering my drying time to 6 minutes.. I will most likely lower the temp but 2 degrees and wait and see my my competitor does (there is a laundromax down the street that has $0.25/10 minutes! But their dryers really suck)

[Laundry_king]

How hight do we let it go. Not saying we have any control over it. When do we close up shop? Gas for cars in NJ is now over $3.00.
I saw on the News $5.00,

What is going to happen. What does natural gas have to do with this price hike?

I'm not laughing anymore, they have hit me in the gut.

WHO is making all this MONEY... Will lets guess

How many people must freeze in the winter or burn up in the heat in the summer.
We are the GREATEST country in the world. Who is in charge here.

Who running this SHOW

[Anonymous]

I pay 3 points over the NYMEX so right now my $ per therm is about $1.50 (without delivery charges...) and to think that a year and a half ago I was able to lock in the rate at $0.65 a therm..

about four months ago I raised my vend prices from $0.25/8 minutes to $0.30/8 minutes.. no one really complained because I put a sign up about the increased utility costs..

Now I am thinking of either lower my temps a degree or two and/or lowering my drying time to 6 minutes.. I will most likely lower the temp but 2 degrees and wait and see my my competitor does (there is a laundromax down the street that has $0.25/10 minutes! But their dryers really suck)


DO NOT DROP YOUR TEMPERATURES~~~~~

It will save you very little and customers will bitch big time. Cut the time or raise the price.

[ajay]

this is a double post but is relevant to this conversation.....I'm wondering if anyone has gone to 6 minutes from 8 minutes on drying. I'm headed there but wondering if there's a measureable gain in revenue. If so, what percentage?


ajay

[Aromaz]

Right now you need 6 min dryers just to tread water.

[amartlock]

You say you need 6 min dryers to tready water. But what do you do if your competitors in the market are staying at 10 min?

[Maywood2]

Hint: the answer to most of your questions appears in your cartoon-profile, LaundryKing... :)

Premium gas in PA now at $3.60 per gallon. Was just under $3.00 earlier in the week.

As someone thinking of getting his laundry running in the next few months, what do you think?? I was using 28% utility costs in my projections, but $2.50 --> $3.60 in a couple weeks = 44% increase. 144% of 28% utility average = 40%!!!

Is that the % I should be using now?? eek! Don't think there'd be any $$ left in it anymore...


I'm not laughing anymore, they have hit me in the gut.

WHO is making all this MONEY... Will lets guess

How many people must freeze in the winter or burn up in the heat in the summer.
We are the GREATEST country in the world. Who is in charge here.

Who running this SHOW

[pete f]

You say you need 6 min dryers to tready water. But what do you do if your competitors in the market are staying at 10 min?


If a dryer burns 80,000 BTU hr, it costs $1.60 an hour to run it if your landed gas cost is 2.00 a therm. At 25 cent/10 mins that is 6 cycles, so revenue is 6 x .25 or $1.50 an hour. They WILL have to lower time or raise price. You don't see your local gas station holding back to last weeks price

[Anonymous]

A dryer rating of 80,000 BTUs per hour DOES NOT mean that the dryer burns 80,000 BTUs per hour -- it only means that the burner burns gas at that rate when it is on. Dryers constantly cycle on and off during operation. I read somewher that an 80,000 BTU/hr capacity dryer typically burns about 44,000 BTU/HR!

[pete f]

A dryer rating of 80,000 BTUs per hour DOES NOT mean that the dryer burns 80,000 BTUs per hour -- it only means that the burner burns gas at that rate when it is on. Dryers constantly cycle on and off during operation. I read somewher that an 80,000 BTU/hr capacity dryer typically burns about 44,000 BTU/HR!


I know it will not burn the max BTU, but 99.9 % use HIGH, so I like to calculate on the high side. I have several ratios I use for profitability and pricing, using full BTU burn and knowing the cost of that is one of them. A smart owner knows his costs structures and has profit ratios to try and maintain.

[Buddy_Amoroso]

I just heard on the news that "they" are expecting the price of natural gas to raise by 70% this winter.

It is going to be a cold winter!

buddy amoroso
baton rouge, la

[Anonymous]

The high gas prices make sunny warm Las Vegas look very good.

[pete f]

Neal, why wait till Sept? the Clean show was in Vegas 2 years ago the first week of August,. 105+ degrees, "but it is dry heat" like sticking yourself in an oven! I am just kidding, I walk out the door in August and break into a river of sweat. Ok, lets get off that..whatever the costs we will always prevail in profit. This is a GREAT time to bump prices, Sure, you may not be able to "get it all" but if energy prices come down, and generally they do after these spikes, your prices stay the same, so over average eveyone should be OK.

[Von Hef]

Ok...I have created an Excel sheet to quickly calculate my monthly gas cost.... but I need input to see if my logic is correct. Here are my calculations for September, please verify if these coversions are accurate.
Thanks!

Dekatherms = 103.2
Monthly Cost = $990.78
Dryer BTU / hr = 78000
Burner time % = 75%
Dryer Cycle time (minutes) = 7.5

Therms = 1032
Cost / Therm = $0.96
Dryer Revenue / hour = $2.00
Dryer Cost / hour = $0.56
Dryer Cost / Cycle = $0.07
Profit / hour = $1.44
Profit / Cycle = $0.18

[smellysocks]

this is where the card system pays off, i can still do 15 minutes for 45cents or 62cents, forget the quarters its impossible to make a good return with coin the way utilities are going. im thinking of getting out until solar technoligy is better, better start charging premuim for hot wash also.

[Von Hef]

this is where the card system pays off, i can still do 15 minutes for 45cents or 62cents, forget the quarters its impossible to make a good return with coin the way utilities are going. im thinking of getting out until solar technoligy is better, better start charging premuim for hot wash also.

You say "this is where the card system pays off..."
and "...it's impossible to make a good return with coin..."

If my calculations (listed above) are correct, my return per hour is around 1.44 out of 2.00. That isn't a good return?
What is your return on the two prices you listed above (1.80 and 2.48 an hour)?

[pete f]

Ok...I have created an Excel sheet to quickly calculate my monthly gas cost.... but I need input to see if my logic is correct. Here are my calculations for September, please verify if these coversions are accurate.
Thanks!

Dekatherms = 103.2
Monthly Cost = $990.78
Dryer BTU / hr = 78000
Burner time % = 75%
Dryer Cycle time (minutes) = 7.5

Therms = 1032
Cost / Therm = $0.96
Dryer Revenue / hour = $2.00
Dryer Cost / hour = $0.56
Dryer Cost / Cycle = $0.07
Profit / hour = $1.44
Profit / Cycle = $0.18

your calculations look right. I know over time I need a gas bill that is less than 50% of my dryer revenue to make a decent profit. This is part of the pricing ratios I look at and use.

[Anonymous]

I think your calculations are SIGNIFICANTLY OFF! First, where did you come up with 75% ??? I've done detailed analysis and found that number to be less than 50%. Second, what about the energy needed to heat hotwater? I assume you use natural gas for that as well, so that amount has to be subtracted from the therms going to the dryers. In the olden days people threw around numbers like 50% of the gas went to heat hotwater - I don't think that number applies today especially if you have an efficient water heater. The actual percent going to hot water heating is probably in the 20%-40% range but will depend on many factors. Lastly, while it may not be a factor yet, what about gas used for heating the store?

Ok...I have created an Excel sheet to quickly calculate my monthly gas cost.... but I need input to see if my logic is correct. Here are my calculations for September, please verify if these coversions are accurate.
Thanks!

Dekatherms = 103.2
Monthly Cost = $990.78
Dryer BTU / hr = 78000
Burner time % = 75%
Dryer Cycle time (minutes) = 7.5

Therms = 1032
Cost / Therm = $0.96
Dryer Revenue / hour = $2.00
Dryer Cost / hour = $0.56
Dryer Cost / Cycle = $0.07
Profit / hour = $1.44
Profit / Cycle = $0.18

[Von Hef]

your calculations look right. I know over time I need a gas bill that is less than 50% of my dryer revenue to make a decent profit. This is part of the pricing ratios I look at and use.


Thanks for the feedback Pete!

[Von Hef]

I think your calculations are SIGNIFICANTLY OFF! First, where did you come up with 75% ??? I've done detailed analysis and found that number to be less than 50%. Second, what about the energy needed to heat hotwater? I assume you use natural gas for that as well, so that amount has to be subtracted from the therms going to the dryers. In the olden days people threw around numbers like 50% of the gas went to heat hotwater - I don't think that number applies today especially if you have an efficient water heater. The actual percent going to hot water heating is probably in the 20%-40% range but will depend on many factors. Lastly, while it may not be a factor yet, what about gas used for heating the store?

You are correct... I don't know how much of my gas bill was used for dryers....but rather how much gas is costing per therm (1 therm = 100,000 BTU) and then estimate how much it cost to operate my dryers per hour based on the cost of gas. Let me explain the numbers I used:

Dekatherms = 103.2
(This is the number given on my gas bill)

Monthly Cost = $990.78
(Final cost of gas bill including delivery)

Dryer BTU / hr = 78000
(BTU burn rate listed on my dryers)

Burner time % = 75%
(This is the assumed amount of time my burners are lit during the hour, to be safe one could calculate the full 100% and this would result in the full 78000 burn rate listed above.)

Dryer Cycle time (minutes) = 7.5
(The amount of time each quarter buys on the dryer)

Therms = 1032
(The amount of therms purchased from the gas supplier converted from dekatherms)

Cost / Therm = $0.96
(The total cost ($990.78) divided by therms used (1032))

Dryer Revenue / hour = $2.00
( 60 minutes divided by cyletime(7.5) = cycles per hour (8) X .25 cents = gross revenue per hour ($2.00))

Dryer Cost / hour = $0.56
( Manufacturer rated BTU burn rate (78000) X burnertime (75%) divided by 100000 to convert to therms X cost per therm (.96))

Dryer Cost / Cycle = $0.07
Profit / hour = $1.44
Profit / Cycle = $0.18

The rest of the calculation are self explained. I may not know how much of my gas bill was used for dryers... but at least I have an idea how much per quarter is profit :^)

[Anonymous]

I don't see why you are calculating something to such accuracy when you have two huge errors. Your math and equations are fine, but your final answer is very wrong as you are probably assuming about double the gas consumption for the dryers than what is really taking place.

For a first pass check on your 75% number why not put a load of clothing in the dryer and sit behind it with a stopwatch as you observe the amount of time the flame is actually on.

For a guess on hotwater why not check what position the water temperature selector is left at each night at closing for a week. Use that as a guess as to the percentage of washes using hot or cold water. Then calculate how much energy is needed to create the amount of hot water your machines use for those cycles and then call the hotwater heater manufacturer to find out the efficiency of your heater. Once you have done that then you will have a much more accurate idea of what you are looking for.

You are correct... I don't know how much of my gas bill was used for dryers....but rather how much gas is costing per therm (1 therm = 100,000 BTU) and then estimate how much it cost to operate my dryers per hour based on the cost of gas. Let me explain the numbers I used:

Dekatherms = 103.2
(This is the number given on my gas bill)

Monthly Cost = $990.78
(Final cost of gas bill including delivery)

Dryer BTU / hr = 78000
(BTU burn rate listed on my dryers)

Burner time % = 75%
(This is the assumed amount of time my burners are lit during the hour, to be safe one could calculate the full 100% and this would result in the full 78000 burn rate listed above.)

Dryer Cycle time (minutes) = 7.5
(The amount of time each quarter buys on the dryer)

Therms = 1032
(The amount of therms purchased from the gas supplier converted from dekatherms)

Cost / Therm = $0.96
(The total cost ($990.78) divided by therms used (1032))

Dryer Revenue / hour = $2.00
( 60 minutes divided by cyletime(7.5) = cycles per hour (8) X .25 cents = gross revenue per hour ($2.00))

Dryer Cost / hour = $0.56
( Manufacturer rated BTU burn rate (78000) X burnertime (75%) divided by 100000 to convert to therms X cost per therm (.96))

Dryer Cost / Cycle = $0.07
Profit / hour = $1.44
Profit / Cycle = $0.18

The rest of the calculation are self explained. I may not know how much of my gas bill was used for dryers... but at least I have an idea how much per quarter is profit :^)

[pete f]

Thanks for the feedback Pete!


I know and respect the other posts' thought process.
I do not try to figure exact cost of a dryer, but rather find easy to use ratios. Every business runs on ratios for profit and mark ups.
For years I have just used a full burn BTU from my dryer and tried to price the time to double what it cost to run "full burn". This led to a dryer revenue to gas cost of less than 50%. It is just a pricing ratio to keep dryer prices and wash prices in check, so I knew to raise washers or dryers.. Unfortunatley, that all goes out the window now. There is no way I can price the dryers at the level I want with these gas costs. It simply means there is less net profit in this business now and everyone's mat has just been devalued by about 20%! Kind of like the folks who bought big SUV's, the trade in value is not good. Either are sales for new ones. Not much can be done about this right now. Don't sell, be careful buying.

[carylrich1]

I have been reading alot about the prices per therm that alot of you folks have out there and I locked in last year at $9.31 per decatherm (not too sure if that is the same thing) and just talked to the guy again during the storms and he said the quotes were coming out somewhere around $15. and some change!!! Decided to wait it out as I still have a few months left... this price is for the product only and there are a separate band of theives taking my money to get it in the door!! I know I should be focused on the cost effectiveness of my pricing but I only have 2 sources to go through and the thief that charges me to get it in the door was more than the other guy was charging last year so......I'm just trying to focus on how I can maximize on getting more customers for the pick up and delivery end and since we started using the schwinn to deliver and the sign is now on my back.....hey things are looking good! So I guess what I'm asking is am I way off and reading something the wrong way or has this been the most painful ride of my exsistence and I just found out about it? I want to shop for this wisely this time around, when I signe d the contract I had just purchased the business and had to make a split second decision as I had taken over the prev. owners contract. Not sure what to look for or how to even guage it. Any suggestions would be helpful.
Thanks,
Caryl

[Anonymous]

I'm presuming that a decatherm is 10 therms, so you are locked in at 93.1 cents per therm.

In the midwest, NiCor was something like 75 cents per therm for August, $1 per therm for September, and I think $1.17 or so per therm for October.

I'd be happy if I were locked at your price :)

- John

[pete f]

I have been reading alot about the prices per therm that alot of you folks have out there and I locked in last year at $9.31 per decatherm (not too sure if that is the same thing) and just talked to the guy again during the storms and he said the quotes were coming out somewhere around $15. and some change!!! Decided to wait it out as I still have a few months left... this price is for the product only and there are a separate band of theives taking my money to get it in the door!! I know I should be focused on the cost effectiveness of my pricing but I only have 2 sources to go through and the thief that charges me to get it in the door was more than the other guy was charging last year so......I'm just trying to focus on how I can maximize on getting more customers for the pick up and delivery end and since we started using the schwinn to deliver and the sign is now on my back.....hey things are looking good! So I guess what I'm asking is am I way off and reading something the wrong way or has this been the most painful ride of my exsistence and I just found out about it? I want to shop for this wisely this time around, when I signe d the contract I had just purchased the business and had to make a split second decision as I had taken over the prev. owners contract. Not sure what to look for or how to even guage it. Any suggestions would be helpful.
Thanks,
Caryl


I bet my gas bill is near $2 a therm delived with taxes this month, about double your total price. Enjoy your profits this year!

[Andy]

If you think the ng shortage is problem in the US only think again:

http://news.tradingcharts.com/futures/8/9/71175298.html

[Glenn]

Check this out.
http://www.marketwatch.com/news/story.asp?guid=%7BD39227AA%2D9A16%2D4837%2DA2D2%2D B4C47E8FE245%7D&dist=rss&siteid=mktw

[Kitty]

I don't understand why there is hesitation on raising pricing. I still have stores in my area that have yet to raise prices on dryers. I still hear the same on the dryer issue as the customers are too sensitive, but yet I have not seen any washer prices increase. Every week is another week of lost income. I dont understand that concept of thinking. RAISE PRICES!!!

[RAM]

When Nat.gas price was $0.39/therm my laundromat was the only one in area,now Nat.gas price $1.50/therm, there are 8 new laundromat.you can not raise prices because Nat.gas prices is up,you have to see what your area store is charging.my new competition charging $0.20/20lb washer and $0.25/10 min dryer,while i am charging $1.65/18lbs washer and $0.30/10min dryer.

[Anonymous]

Today gas bill: $1.52 per therm. The weak players are going to be squeezed out of business.

[PeterH]

$1.21/therm here. How does the math go to figure out cost per minute?

[Von Hef]

$1.21/therm here. How does the math go to figure out cost per minute?

Peter,
Do you mean the cost per minute of gas to dry? If so look at my post earlier in this thread. I also have an excel spread sheet that I would share with you if you will private e-mail me.

Hef

[Anonymous]

$1.21/therm here. How does the math go to figure out cost per minute?


Well if your dryers are rated at 80,000 BTU/Hr they probably actually consume about 1/2 that much gas as they cycle on and off during the cycle. Thus, 40,000 BTU/hr is 0.4 therms or in your case $0.484/hr or about 0.81 cents per minute in gas cost.

[mr_soap]

something is wrong

[DaveLevenson]

If your dryer consumes 80,000 btu/hour (assume 100% duty cycle, even though, as previously explained, this is an overestimate).

That is 0.8 therm/hour. (1 therm = 100,000 btu.)

That is 0.01333 therm/minute. (1 hour = 60 minutes.)

At $1.21/therm, gas is costing you $0.01613333 / minute.

A six-minute "dryer-turn" costs about a dime in gas, for this example (actually less, because the dryer duty-cycle is less than 100%).

[Anonymous]

I belive in simple math,
Income-expenses=net
as long as i make 30% or above on my investment i am happy,if i do not make 30% or above I sale my store and move to other laundromat or go into other business,some laundromat make money by charging $0.25/10min while other will loose money by charging $0.50/10min,it is all about total expenses,$0.25/10 min store has 1/2 rent than $0.50/10min store,I have seen Laundromat charge $2.25/18lbs because they have 500% sewer charge than store offer $1.25/18lbs because he do not have sewer charge,
price of nat.gas has nothing to do with dryers time,you can charge what is profitable to you for washer,dryer,soap,soda and snack etc...

[Anonymous]

You are 100% correct.

Today i saw a laundromat that just switched from free dry to 15 min per quarter.

[Buddy_Amoroso]

It appears that the price of natural gas is coming down today Henry Hub Spot Natural Gas trading on the Nynex is 13.24 ccf compare that to during hurricane Rita it was around 15 ccf.

It is still high but if we don't have a cold winter it should keep coming down - BUT if we have a bad winter the prices will stay high.

buddy amoroso

[pete f]

my last bill for all gas, 1.537, transport, tax, etc came to 2.04 a therm. Compared to my June bill, it was 29% higher overall. A portion of the bill is fixed, IE customer charge. This is for my smallest store, so the bigger stores can spread the fixed costs a little thinner. The gas cost to dryer revenue ratio jumped from 35% to 53%. I had adjusted the dryers to 7 from 7 1/2, and last week went to 6 min.

[William]

Are you sure that the BTU rating is not correct? Why do you assume that the actual duty cycle is less than the rating?

I have to believe that a 100,000 BTU dryer uses 100,000 BTU per hour. Regardless of how many times it cycles on and off.

We don't say that a washer that is rated for 50 gallons per cycle only uses 25 gallons because much of the cycle is used to agitate...

Has anyone actually confirmed this assumption with a manufacturer?

Just curious...

[MichaelCa]

You pose an excellent question! You may have something there.

Considering the issue carefully, it might be more reasonable to assume that the (sample) 100,000 BTU/hour figure may refer to a combination of :

A.) the maximum Highest Temp. rating possible (many owners do not use this) (for example 190 deg w/ Alliance dryers)

*AND*

B.) a theoretical continuous 1-hour cycle (example: 6x10min quarters) - which would *NOT* mean "burners on all the time", but rather the amount required to maintain the normal cycle, i.e. 'on & off' using the maximum temp setting.


This means that, if one leaves the Mfr. setting as-is, and then counts & divides cycles used per day & per/hour, the figure of 100,000 (in the example) would actually be the REAL Amount of BTU used for those periods - & all the discounting & ratios mentioned in earlier posts wouldn't apply.

I MUST get to the bottom of this - i'll report back.

[Anonymous]

You pose an excellent question! You may have something there.

Considering the issue carefully, it might be more reasonable to assume that the (sample) 100,000 BTU/hour figure may refer to a combination of :

A.) the maximum Highest Temp. rating possible (many owners do not use this) (for example 190 deg w/ Alliance dryers)

*AND*

B.) a theoretical continuous 1-hour cycle (example: 6x10min quarters) - which would *NOT* mean "burners on all the time", but rather the amount required to maintain the normal cycle, i.e. 'on & off' using the maximum temp setting.


This means that, if one leaves the Mfr. setting as-is, and then counts & divides cycles used per day & per/hour, the figure of 100,000 (in the example) would actually be the REAL Amount of BTU used for those periods - & all the discounting & ratios mentioned in earlier posts wouldn't apply.

I MUST get to the bottom of this - i'll report back.

Gas appliance ratings are rated based on the amount of energy consumed if the burner operated continously for an hour at the maximum safe firing rate. Thus, if the dryer is rated at 100,000 BTU/HR input that would be the maximum it could possibly burn. In practice it will never come close to that amount and the actual consumption in a laundry is typically half that amount or less.

As a test you could easily throw a load of clothing in and then watch the burner with a stop watch and see what percentage of time it was actually consuming gas.

[Anonymous]

Why not installed seperate gas meter for dryers only?
do you think it can be done?

[Anonymous]

Why not installed seperate gas meter for dryers only?
do you think it can be done?


Anything can be done for a price - but a meter that size is quite expensive. Just look at your gas bill and see what the utility charges you each month for your main gas meter.

While in a perfect world your idea is a good one, it is much cheaper to just install the hour meters as Dave has suggested and multiply that by the know BTU/Hr burn rate for the water heater -- gives you the same information at a much lower cost.

[Aromaz]

Current bill 2.02 per therm. Should reach 3.00 by Dec or Jan. Good grief!

[dzender]

$1.53 in Columbus, Ohio - Columbia Gas.

[pete f]

my last bill came in around $2.05 / threm. Lock up the guns.

[carylrich1]

Trying to breakdown formula for dryer profit/loss. Price quote per decatherm is 1.53 . We use a minimum of 1000 therms a month but i don't have a current gas bill at the new price yet.My dryer btu's are 75,000 and my dryer time is 8 minutes per quarter .We are thinking about going to 6 mins per quarter and i read the formula being used but i think i'm missing something ? Would this be most accurate guidelines for increases and would you do the formula at 100% or at 75% which is a better example . Thanks for everyones help !!

[amartlock]

$1.43/therm in SoCal. Up 40% in just 2 months! Ouch. As a new owner (purchased a few months before the NG crisis began) this is really pinching my cash flow.

[n175h]

The clock showed the gas valve on the burner was open 81.4 hours on October.

Heater input 700k/btu/hour per mfg model plate
gas cost $1.37/100ccf (last bill and rising)
100ccf =102000 btu's

700/102 X 81.4 hours X $1.37 = $765.32 just to heat my water.

Ichhh, this is more than doubled since 2004.

My water heater is a 1984 Jarco and probably not as efficient as the new Natcos, Hamiltons. It may be time for a look at something newer.

Anyone have any positive results on changing out to newer equipment?

Thanks,
David

[fasron54]

I just received my gas bill for November and was blown away. I will be raising prices tomorrow. I have a small mat in Texas and my gas bill usually ran around $400-500/month. This months bill is over $1,200!!!
My dryers currently are set at 10 mins/.25 cents but tomorrow they will be 10 mins/.50 cents. I'm putting up signs explaining the reasons for the increase.The customers will bitch but I feel I don't have a choice. There's no reason being in business if you can't show some profit.
I been in the business for almost 20 years and have never seen rates rise this much this fast.

[MichaelCa]

Sept. 1 : 0.99 cents

Nov. 1 : 1.62

Up 64 % in 2 months.

(Calif.)

[Anonymous]

I just received my gas bill for November and was blown away. I will be raising prices tomorrow. I have a small mat in Texas and my gas bill usually ran around $400-500/month. This months bill is over $1,200!!!
My dryers currently are set at 10 mins/.25 cents but tomorrow they will be 10 mins/.50 cents. I'm putting up signs explaining the reasons for the increase.The customers will bitch but I feel I don't have a choice. There's no reason being in business if you can't show some profit.
I been in the business for almost 20 years and have never seen rates rise this much this fast.


Good for you if you can get it. BUT be prepared to loose A LOT of customers. While price increases are great, a 100% increase will most definitely piss people off. Suggest you increase washers some and dryers less than 100%. Let us know how you make out.

[William]

SCE&G is rasing rates to $1.62 per them immediately. I am going to raise prices ASAP. Here is the old vs. new:

Top $1.75 $2.00
Double $2.25 $2.50
Triple $3.75 $4.25
50# $5.50 $6.00
75# $8.75 $9.50
Dryer 6/.25 5/.25

[amartlock]

Obviously, the hurricanes have contributed greatly to the drastic increase in NG this winter. What are the experienced owner's opinions on what will happen this spring? Will we be looking at a drastic NG price decreases back to reasonable/normal levels?

[Kitty]

SCE&G is rasing rates to $1.62 per them immediately. I am going to raise prices ASAP. Here is the old vs. new:

Top $1.75 $2.00
Double $2.25 $2.50
Triple $3.75 $4.25
50# $5.50 $6.00
75# $8.75 $9.50
Dryer 6/.25 5/.25

For you out there that raise washer prices versus messing with decreasing dry times in order to compensate the cost of the gas bills so as not to freak your customers out do you pre figure the actual revenue you will earn by doing this?

The previous poster to this post, has said his gas bill doubled by approximately 500-600 per month. Therefore he will need an average of approx 140$ week to cover the increase of the gas bill alone. Shouldn't he concern himself in wanting to earn an additional 30% on top of this to equal approximatly 500$ per week to cover the increase in the utility spike?

Would it not matter the type of machine and vend price and usage to determine if you will net the amount you need to cover the extra expense + profit ?

[laundryboy]

One thing to remember about raising prices because of the your GAS costs. Customers understand because it is in the news, spread your increases across all equipment such that you can maintain your increases when NG prices decrease.

Don't adjust dryers only - customers will expect you to give back a minute or two when the MEDIA reports how NG is "returning" to a normal price. IF you move dryer pricing to favor the customer in the future, keep your wash prices up.

Take this time to stratigies for the long term. Laundries have not kept up with inflation over the last 10 - 15 years. Try to justify price increases and keep them up.

[pete f]

Obviously, the hurricanes have contributed greatly to the drastic increase in NG this winter. What are the experienced owner's opinions on what will happen this spring? Will we be looking at a drastic NG price decreases back to reasonable/normal levels?

Go to the NY merc exchange websit and you can see NG futures price for years out. For delivery in '08 prices are in the 7.00-8.00 area. Dec is trading at 11.65 while spot Nov, set for delivery is around 13.32. This means theorectly next months gas price will be 15% less. As time goes on it will be less. Jumping wash or dry vends by huge amounts is great if it sticks, but risky. All the past spikes I have seen have leveled out, I am guessing this one will to, based on what the pro traders are pricing gas in 2-3 years. Not every year is going to be a great year in every business, they have thier cycles.