Some pricing advice please

[Westlake]

I am in a low income part of Los Angeles. There are 3 other mats within 1 block radius of my mat. For the past 5 years I have been the price leader but sometimes paid for it in lost volume. This year I have become the price lager and am paying for it in lost revenues. I know its time to do an increase and would like some advice on alternatives that will maximize returns.

Here is the pricing in my market.

Mat 1
Tops 1.00
25lb 2.5
35lb 3.25
Dry 15 mins (was free dry till 6 months ago)

Mat 2
Tops 1.25
25lb 2.00
35lb 3.00
50lb 4.00
80lb 6.00
Dry 15 mins (was 20 mins till 3 months ago)

Mat 3 (I can’t remember all the prices right now, but the furthers away)
Tops .75
27lb
35lb
50lb 3.00
Dry 20 mins (was 30 mins last year)

My Mat
Tops 1.00
27lb 2.25
35lb 2.75
Dry 13 mins

Obviously my 27’s, 35’s and the dryers are all under priced. I know I can get away with a quarter bump in the frontloaders without any real impact on volume, question is should I mess with the dryer times? The last time I messed with the dryers, I took them from 15 to 13 mins the result was about a 15% decline in overall volume. That was about 2 year ago and since then I have recovered about ½ of that volume back.

When I see the dryer times polls on this site I get sick at the amount of time I give. I have attempted several times to persuade the other owners to price their dryers realistically bur to no avail.

I am considering several options.

Phased in: Leave all washer prices as is and lower the dryer times to 10 mins. Allow a few months to pass then raising the frontload by a .25

OR

Immediate: Raise fronts by .25 and lower dryers by 1 or 2 mins.

OR

Just raise the fronts and leave the dryers alone

OR

Any other ideas you folks might have.

I would appreciate some real input with consideration given to both my market conditions and competition.

Thanks

[Kitty]

How do you CA boys stay in business with those vend prices?

Your dry times/vend prices are so way off you will give your customers a stroke if you come close to what we see here on the east coast... do you have some magic fairy providing you gas over there? What are you paying that your market can even think about giving away dry times at that vend rate? Your washer vend prices do not over compensate for the loss? Hows your lease/rental rates in the west? DO you have so many customers that you can decrease the vend costs? Quantity pricing per se?

[Westlake]

How do you CA boys stay in business with those vend prices?

Your dry times/vend prices are so way off you will give your customers a stroke if you come close to what we see here on the east coast... do you have some magic fairy providing you gas over there? What are you paying that your market can even think about giving away dry times at that vend rate? Your washer vend prices do not over compensate for the loss? Hows your lease/rental rates in the west? DO you have so many customers that you can decrease the vend costs? Quantity pricing per se?

Ok here is a rough idea of what the monthly numbers look like

Gross 17,000 – 20,000
Gas 1400 - 2000
Elec 600 - 700
Water 2100 - 2400
Rent 2000 (my rent is low for the area, typical rents for my store s/b $3000-$4000)
+++
Net 4500 - 8000

Last gas bill $1728.33/ 1443 therms = 1.20. I did 15440 dryer turns for revenue of $3860.

Other considerations, we don’t have heat and we don’t have air conditioning, but we do have a roof :)

[amartlock]

Westlake,

I'm in Oceanside and my market is as follows:

Tops: 1.25
25#: 2.75
35#: 3.50

Dry: .25 for 10 mins


I increased my prices last weekend as follows:

tops: from 1.50 to 1.75
25#: from 2.25 to 2.50
35#: from 3.25 to 3.50
decreased dry time to 9 mins

I took over the mat in May of this year and prices hadn't changed in more than 18 months. I'm hoping to see the competition follow suit on the price increases particularly in the tops increase and dry time decrease. Unfortunately I don't have a read yet on how the price increases will affect my overall business but I do know that the competition has to do something to offset the cost increases now and even more this winter.

[E&R]

I'm in Los Angeles also. My advise to you is to raise the fronts and leave the dryer time alone since you're in a low income area; however, you an reduce your gas cost by incrementally increasing the cool-down period and lower the dryer temperature over a period of time to get customer used to putting more quarters to dry. One mat owner told me that they increased their cool down period to 4 mins.

In my area, there are 5 mats (2 of 5 are attended) within 1/4 miles of where I am at. This area, the charges ranges from:

Tops: $1.00 - $1.25
18#: $1.75
25-30#: $2.00 - 2.50
35#: $2.75 - 3.50
40 - 50#: $4-5
Dryer: .25 for 15 mins (temperature and cool down periods varies).

My store is the smallest and unattended. Last week, I went ahead and reduced my dryer time from 12 mins to 10 mins. For me, it was the best time to make the change since the gasoline prices are at all time high and news report of "Katrina" and "Rita" affecting gas prices should help my customer understand the dryer price hike. Accepting the price hike might be different story... we'll see. I have not yet increase my washer prices. Currently:

Tops: $1.50 for hot, $1.25 for warm/cold
25#: $2.25 for cold, $2.50 for warm, $2.75 for hot
35#: $3.75
75#: $7.00
Dryer: .25 for 10 mins (2 mins cool down, Hot: 180, Medium 160, Cool 125)

Good luck to you.

[PeterH]

Doing the dryers hurts the most, but if they are computerized, you can drop by a minute and slowly move them down. It's tough to do, since customers seem to be so sensitive to dryer times.

Do you have a lot of families? If so, I would start with your big machines, since they are the closest to the .10/lb capacity mark. You should be able to get them up there fairly painlessly. Once there, then work on your tops.

Watch your competition carefully. They will help you decide when you can sneek another increase in.

[Westlake]

Interesting, seems like the advice is leaning towards raising the washer prices and leaving the dryers alone. Although E&R makes a point that if there was ever a time when you could justify lowering dryer times it is now. Also looks like I could consider pricing on the hot/warm/cold wash scenario. I’m not sure if I can do this on my SQ FL as they are manual but the tops and dryers are computerized.

My dryers are set at Hot 190, Warm 165, Cold 130. About 2 weeks ago I went from a 1 minute cool down to 2 minutes.

Well got some things to think about but still welcome more input.

Thanks

[Kitty]

Interesting, seems like the advice is leaning towards raising the washer prices and leaving the dryers alone. Although E&R makes a point that if there was ever a time when you could justify lowering dryer times it is now. Also looks like I could consider pricing on the hot/warm/cold wash scenario. I’m not sure if I can do this on my SQ FL as they are manual but the tops and dryers are computerized.

[b]My dryers are set at Hot 190, Warm 165, Cold 130. About 2 weeks ago I went from a 1 minute cool down to 2 minutes.

Well got some things to think about but still welcome more input.

Thanks


How many other proprietors use this stategy? We did?.....Back when we were faced with the first gas hike in the early nineties and had competitive issues....any other strategic or helpful hints for operators to reduce utility expenses.

Kitty

[Andy]

I raised my washer vend prices yesterday and plan to raise my dryers before the weekend.

My vend prices are as follows:
tops-1.50
25#-2.75
27#-3.25
35#-4.25
50#-4.75
80#-8.25 hot w/prewash
80#-8.00 hot no prewash
80#-7.25 cold no prewash

Dryers will be priced as follows:
30# stacked 6 min/25 cents
50# 5 min/25 cents

75 cents for vend soap and bleach.

[Anonymous]

I like to run 8 mins on the dryer with a 2 min cool down. High temp is 190. The clothes are still warm when finished.

[Walter]

Friends,

Regarding increasing "cool down" time, can someone confirm my understnding that "cool down" impacts the last quarter only. In other words, if a dryer is set at .25/10 minutes with a i minute cool down, and a customer inserts 3 quarters (for a total of 30 minutes) then the cool down kicks in after 29 minutes. So, if your current cool down is 1 minute and you bump it to 2 minutes, you're decrease in gas consumption is small.

On the other hand, when customers start inserting individual quarters when their clothing is not quite dry, then the full impact of 2 minute cool down is felt on a per quarter basis.

Is this correct?

Thanks,
Walter

[E&R]

Yep! That how it works. This fire safety feature lower the temperature inside the dryer by shutting down the gas/electric heating element and exhausting out the hot air prior to shutting down. To determine the best cool-time period, one has to balance the benefits of a longer cool-down period vs the customer's tacile benefit of "the clothes are still warm when finished", as Neal puts it.

The longer cool-time is a potential gas saver, especially on un-educated customer who let their dryer stops when their clothing is not quite dry, then the full impact of cool down minutes is felt on a per quarter basis.

[E&R]

Additionally...

In older computerized dryers, you can only set one cool down period; newer computerized model such as Dexter allows different cool-down period depending on temperature selection.

i.e.
Hot --- 5 minutes cool down.
Warm-- 3 minutes cool down
Low --- 2 minutes cool down

[Westlake]

Well appears like all that paranoia about raising prices and changing dryers times was for nothing. As I mentioned in my previous post on Friday I raised the prices on my frontloaders by .25 and lowering the dryers by 1 minute & increase cool down by 1 minute. On the dryers I went from 13 minutes/1 minute cool to 12 minutes/2 minute cool. Hung out at the mat this weekend and did not hear even 1 complaint. Not even a comment about the changes. Also I watched the dryers closely to see how the customers would react to getting 3 minutes less heat on 2 quarters (most of my customers use 2 quarters) and absolutely no change. In fact, the customers I observered still only used 2 quarters then removed their clothing. I guess this means that for the average customer 22 minutes of heat is still adequate to dry their clothes. Guess this is why no one really complained. I was sort of hoping that the reduction in heat would have generated an extra turn on the dryers, oh well.

[mr_soap]

This will reduce your cost

[Outlaw]

Westlake, in your second post I don't see insurance or labor as expenses. What's with that?

[MrsNewMat]

Yep! That how it works. This fire safety feature lower the temperature inside the dryer by shutting down the gas/electric heating element and exhausting out the hot air prior to shutting down. To determine the best cool-time period, one has to balance the benefits of a longer cool-down period vs the customer's tacile benefit of "the clothes are still warm when finished", as Neal puts it.

The longer cool-time is a potential gas saver, especially on un-educated customer who let their dryer stops when their clothing is not quite dry, then the full impact of cool down minutes is felt on a per quarter basis.

I am still puzzled.....how does this cool-down time work and can be used profitably? I have ADC 285 singles and I went down on cool-down time to 1 minutes for all (hi, low, pp) temp. My customer base is: they put the clothes in dryer, leave and come back when they are long done......on weekends, I have to actively manage so other customers don't have to wait......What should my cool-down time be?

[pete f]

I am still puzzled.....how does this cool-down time work and can be used profitably? I have ADC 285 singles and I went down on cool-down time to 1 minutes for all (hi, low, pp) temp. My customer base is: they put the clothes in dryer, leave and come back when they are long done......on weekends, I have to actively manage so other customers don't have to wait......What should my cool-down time be?

Most factory set time is 2 or 3 min for cool down. 1 min keeps dryer complaints down becuase the clothes still feel hot even if they are not dry. I use more cool down on high and less for the low setting.

[Westlake]

Westlake, in your second post I don't see insurance or labor as expenses. What's with that?

I wasn't trying to give a P&L just a rough idea of the numbers.

[Buddy_Amoroso]

I increase my pocket dryers from .25 = 8 minutes to .50 to start (12 minutes) additional time .25 = 6 minutes.

My 75 lbser's (Old pricing) $2.50 to start (35 minutes) additional time .25 4 minutes.

New Pricing: 2.50 to start (30 minutes) additional time .25 = 3 minutes.

I put notices in my store stating "Because of Historical High Natural Gas Pricing - We are forced to readjust our prices". I also put copies from the local paper article that the head line was "Historical High Prices for Natural Gas".

No one has complained...yet.

Buddy Amoroso