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The Death of a Successful Laundry: FREE DRY

Updated: Nov 28, 2021

Are you digging your laundromat’s financial grave by offering FREE DRY? Did you think you would increase foot traffic, get more people into your place by giving away a service that takes money right out of your wallet? If killing your bottom line is your goal, just stand at the door with cold hard cash, invite them to come into your store. The more who come into the laundromat, the more you will give away.

What other business gives away free stuff daily? When you get your car fixed, the owners don’t give away free tires just for showing up, Grocery stores don’t give away free food because you use their store. They are there to make money on what you need.

Work with the problem at hand. If you need more foot traffic lets deal with that challenge instead of creating another problem in hopes of creating more foot traffic.

Increase of foot traffic does not mean an increase of the bottom line. Only paying customers, them alone, increase your bottom line.

I’ll give you an example:

Golden Starry Laundry is open 24/7, in a diverse city setting. It does $20,000.00 monthly. That would be a combined wash and dry revenue. Wash Revenue is $12,000.00 or 60% of monthly income. The Dry Revenue is $8000.00 or 40% of monthly income.

Total: $20,000.00 or 100% of monthly income.

Golden Starry Laundry’s owner believes offering Free Dry will increase foot traffic. Increased foot traffic of paying customers does increase the bottom line. So, the owner decides its time to offer Free Dry. Do you remember what portion of the monthly income of this laundromat was assigned to drying clothes? It was $8000.00 or 40% of the monthly income. Just how many people will the owner need to make up for the loss of $8000.00 and that is to just break even, to do what he was doing before he started Free Dry. You seriously don't think the income of laundry detergent, dryer sheets, snacks and sodas will make a significant dent into that $8000.00 give away?

Now how would, Golden Starry Laundromat make up for the out of pocket cost ($8000.00) of FREE DRY? Golden Starry Laundomat's owner would increase the vend price of the washers, which is already a tight margin. Now Golden Starry Laundromat has the highest vend prices in the area. The owner could increase the vend prices of detergent, dryer sheets, snacks, and sodas. Just how much would you get for $8000.00 of detergent, dryer sheets, snacks and sodas?

Customers will walk away from your laundromat, wash their clothes elsewhere then return to dry their clothes where it doesn't cost them a cent. Yup, you got it: money right out of your pocket.

Do you know the difference between paying customers and non-paying customers? Paying customers wash their clothes and dry them at your store-using your machines. Non-paying customers wash their clothes at your local competition or from home and then drive over with a load of wet clothes to be subsidized by the owner offering Free Dry. Free Dry is money out of your pocket, not theirs.

What about the paying customers who want to get out of the laundromat sooner, they use a few of your washers, but they decide since dry is free, they will use as many dryers as they can, to get out faster. Smaller loads in the dryer mean faster drying times. So, they use four dryers, instead of one dryer. You know, spend 1/4 of the amount of time by using four dryers to do what one could do. Think of all the "waiting" customers, growing agitated and unhappy while they have to wait longer times because of fewer dryers available. Your customer base will shrink as loyal customers venture out to your competition who does not offer Free Dry and where the ratio of washers to dryers is appropriate. Money out of your pocket and into the hands of your competitor. Not a good business model.

What about the increased costs that comes from Free Dry? Increased wear and tear on the dryers. Down time for broken dryers and customer dissatisfaction increases. These machines will need repairing or need to be replaced sooner. What about the increased electricity costs, using three dryers to do the job of just one. Money right out of your pocket.

Inconveniencing other customers, who did buy detergent, dryer sheets, and who also need to dry their clothes but must wait for those who use those three machines. This creates poor customer satisfaction and to the average "joe" using your store, “I’ll find another laundry to use.” That is money out of your pocket and into the hands of your competitor.

Hire big and strong, intimidating staff to scare away the free loaders and those using multiple dryers to do what one dryer could do. That’s got huge liabilities written all over it. That’s catastrophic money out of your pocket.

My advice: Never give away money. Never give away a service people are willing to pay for. Never ever do something to sink your dream. Just don’t.

Andrew J Cunningham is a 36 year industry veteran located in Southern California. He is an author, broker, consultant and an operational guru. Andrew can be reached at 310-951-4556

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