Dryer Vend Pricing
It may be time to rethink the price of dryer vending. For decades now coin store owners have vended dryers the same way, one quarter for so many minutes (4-8 minutes). The current formula for dryer vending hasn’t changed in over 40 years yet the cost of utilities has changed considerably. In 1970 for example the price per million BTU’s was $.59, while in 2010 it was $7.41. There are many other expenses that have changed for the laundry owner as well, such as cost per square foot, equipment costs, electrical costs, labor etc. The net sum increase in operational costs have somehow been ignored with regard to dryer vend pricing. While there has been some movement in the number of minutes provided per $.25 it has not kept pace with operational costs. Instead coin store owners have simply allowed the profits made from the dryers to dwindle.
Most coin store owners run their business with the philosophy that they cannot vend at pricing higher than what the competitor offers. The fear is that if they price higher than the competition they will see volume drop, resulting in lost profits. While pricing can be a factor in affecting volume, it is important to remember that you are in business to make profit not simply be a pass through for dollars. Laundromat customers in most markets are looking for a convenient location that is clean, offers the right equipment, good parking, and a comfortable atmosphere. Pricing is not the primary driving force to success. With that being said reduced volume doesn’t have to mean reduced profits (see below).
VEND PRICE # of TURNS GROSS
$1.25 7 $8.75
$2.50 4 $10.00
Less turns at a higher vend price can mean more profits and less wear & tear on the unit. The lower volume reduces long term maintenance costs as well. Overall the best practice has to consider all factors such as the strength of the location, equipment offered, demographic mix of the customer base, competitor’s strengths, etc.