CLA Connect Open Forum

Subject: Planning in going DCO to challenge competition

1.  Planning in going DCO to challenge competition

Posted 9 days ago
This october my revenue took a dip after 3 years of consistent year after year of increasing revenue. The dip was so sudden that I even suspected theft for several weeks.

What alarmed me so much was that my coin collections was way down but my cash collection at the chargers was consistent with what my store usually earns.

So after spending several hours reviewing tapes, I eventually concluded there was no theft, my quarters were just being taken out of the store, $200-300 a day!

As it turns out the apartment complex near my store just bought all new toploaders and has priced them out at $1.50 compared to my $3.00.

Now the way I see it, I have two choices.  Lower my prices.  Or make it more difficult to use those machines.

since the apartment complex doesn't have a change machine, I figure I can price all of my machines at dollar increments, continue accepting quarters, only now I will only pay out dollar coins in my changers.

i also have brand new double loader hard mounts priced at $3.00 that I may drop to $2.00 to really put a hurt on the complex.

in my store I had my tops priced at $2.50 but the customers were burning up one or two belts a week so I priced them the same as the double which fixed that problem.  I figure I could just wait till they do the same to the apartment complex next door but at 100-200 bucks a day in loses I figure it's best to just offer a discount on my 20# machines and win back my customers and keep those who just want my quarters away.

Does this sound like a reasonable plan?

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Brian Clune
Potential Investor
San diego CA
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2.  RE: Planning in going DCO to challenge competition

Posted 9 days ago
Sounds like a good plan to me. Best of luck.

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Dave Menz
Queen City Coin Laundry Chain
Cincinnati, OH
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3.  RE: Planning in going DCO to challenge competition

Posted 9 days ago
Brian,

Yes, I would do the same....

First, drop the price to $2.00. Once you have that done, advertise it! For any competitor to charge HALF what you charge is too tempting for customers. Especially if they have the convenience of not having to leave their homes to wash. (Some here may say to not drop your prices, but after going through the same scenario as yours many times over the years, I have found that the best way to meet new competition is to be aggressive and meet them head on).

Put a nice big sign in your window, and whatever else you need to do to get the word out.
This should help a lot to stop the initial bleeding, and probably bring you new customers from other areas.

Next, go to DCO to stop the quarter bandits who are using your mat to get quarters for their apt building.

You are very lucky that they put in top loaders, and not front loaders like we get here in NYC apt houses. The laundry rooms here even have triple loaders!
So imo, even if you did nothing, some of the customers would eventually return because tops really can't compare to good hard mount top loaders.

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Paulie B
Store Owner/ Employee
Mr Machine
New York City NY
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4.  RE: Planning in going DCO to challenge competition

Posted 9 days ago
I'll admit that one of the reasons I switched was out of spite for the non-customers.  I get a chuckle watching the reactions when they walk in off the street, expecting quarters and get a handful of gold.

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Chris M
Norfolk VA
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5.  RE: Planning in going DCO to challenge competition

Posted 9 days ago
Chris,

Ha.  I am looking forward to that day also.

When I see someone come in off the streets I ask them if they would mind if I came into there home and took food from their fridge and left them a few dollars.  I get some very strange looks but most get it.  Probably doesn't help but worth the reactions.

J

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John
Store Owner/ Employee
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6.  RE: Planning in going DCO to challenge competition

Posted 9 days ago
I will qualify my remarks by noting I don't compete with large apartment complexes, and have previously owned / managed apartment complexes.  Smaller sizes 6 to 45 units.

Sounds like the nearby apartment complex added a boat load of TL machines if they are doing $200 to $300 dollars per day at $1.50 per turn on their machines.  Their machine count will tell you an estimated TPD to help make sure you only contribute a corresponding amount of the $200 to $300 per day quarter loss to the apartment's TL's.  Not sure how close your competitors are and if they have a change machine down...you might get an over load of quarter withdrawals short term.

Make sure you are not hurting yourself as you attempt to hurt the apartment laundry.  The apartments make their money on rents and can use washer dryers as a loss leader...hard to compete with if they do it right.  Simply stated, a dollar drop in price on your 20 lb FL machines are not going to win back enough apartment customers to hurt a properly operated mid sized apartment complex.  The apartment complex will add a quarter change machine once the tenants demand increases, or you will get more of their tenants back.

Accordingly, not sure of your equipment mix and customer preferences, but if it makes sense to eliminate your TL's and install more 20 lb and or larger FL machines then this may be the time to do it.  (Audit your FL use to see if maybe a few larger machines would make up for the TL's etc....this approach works better if you are short on some 40 - 60 - 80 sizes),.  Let the apartment complexes have the TL's, hope they don't get FL's and focus your customer base on larger machines.

Frame this DCO and any machine size changes as supporting your customers and staying in stride with the industry standards v. going after a competitor that is not a L-Mat...especially since you want those customers back.

Hope all works out for the best.


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Les Monthei
Potential Investor
Redding CA
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7.  RE: Planning in going DCO to challenge competition

Posted 9 days ago
Edited by Brian Clune 9 days ago
Thanks for the responses so far.

More information about my store:

i have 8 tops

(8) 20 pound
(7) 30 pound
(14) 40 pound
(7) 60 pound
and (2) 80 pound.

 I don't think they apartment building is doing $200 a day, but that is the drop off I am seeing.  At $1.50 a day it would be really hard to imagine that they are doing that kind of business.

but if they choose to use two tops instead of one of my triples, we'll the lose in business can add up oretty fast.

This drop could be a mix of seasonal affects October is a slow month for me.  November will tell the true story.

the problem is my store is in a shopping center directly across the street from this apartment complex so many people walk over, do their shopping, and now... grab some quarters on their way home.

So just wondering, does anyone see any potential flaws in the plan that I may be missing?

Additionally the apartment complex does not have a change machine so people must bring their own quarters.

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Brian Clune
Potential Investor
San diego CA
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8.  RE: Planning in going DCO to challenge competition

Posted 9 days ago
Brian,

The neighbors might presently be enamored with the new equipment at their complex however over time you can win some of those folks back. Top loaders are very rough on clothes which the greater fiber material in the drain is evidence of. Consider posting informative comparisons between top and front load washer. Higher extract speed means clothes come out cleaner without the harsh treatment of an agitator. Fronts can also be touted as more environmentally friendly. There are a few other virtues of front loaders that you may extol in an effort to compete.

Good luck.

David

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David Keith
Store Owner/ Employee
san diego CA
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9.  RE: Planning in going DCO to challenge competition

Posted 8 days ago
Mr,Brian
No ,it don't sound like a plan to me . A little story about my new build store two years ago . A mechanical engineer meet me at site to explain to me how to build an efficient laundromat and he asked me why I want to put 5 water hogs (TL) in a new build store and how much its cost to wash ? $1.00 I replied, he shocked and said I will lose money for these TLs , I said yes, but I will make money back if customers they choose warm or hot wash and of course dryers too ,then I walked him to a laundry room in apartment complex right across from us and ask him:if you were a renter in this apartment  will you use this laundry room for $1.25 per wash or will you use my front load for $2.00 per wash ? He just smile and said :I hope you right and make money .
 After two weeks of my new opening store that laundry room replace their old equipment with all brand new equipment to compete with me and using same brand that I have and almost same price strategy,but sorry my dryers works much much better than yours .
 If customers come to get your quarters and go back to their laundry room in apartment, I think that is a good news at least they know where a laundromat is,you just need to figure it out how to capture them and they are the real laundry customers no matter where they choose, instead of going dollar coin or a sign read " change machine for laundry customers only " or stop them using your change machine ,ask them  and introduce them your TL washers cheaper than their laundry room and your dryers works whole lot better.

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Linh Nguyen
Store Owner/ Employee
Mobile AL
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10.  RE: Planning in going DCO to challenge competition

Posted 8 days ago
So Linh, your suggesting keeping it quarters and simply dropping my toploaders price?

i would be going from $3.00 to $1.50.


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Brian Clune
Potential Investor
San diego CA
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11.  RE: Planning in going DCO to challenge competition

Posted 8 days ago
Idk...

 Seems like a whole lot of effort & expense for you falling asleep at the wheel.

 I read your entry and kept asking myself.why did it take you so long to figure out over 200.00 per day or week (whatever the multiplier was)  are walking out of your mat.  "?"

 I've said this before, we all are responsible for knowing, understanding, & managing our business.

 I / we recognize when quarters walk out and do 1 of 2 things a.) address them immediately and / or b.) Work it to our advantage.

 Do we agree that most if not all mat owners end up with extra coins sooner or later?  Some in as few as a week others over a couple of months contingent on how busy our mats are.

 Thus, everytime owners gather 50 lbs of quarters or half of that depending on bank restrictions the mat owners make a deposit.  I know some choose to roll them up & deposit.

 We've done very little to none of that because we understand our business & compliment that with the fluctuations.

 Example, Summertime, holidays & vacations it is common for non-customers to get change to use on the parking meters on the beach.  It's Florida we're not too too far from the beach so it's part of doing business in our area and we simply.prepare for it.

 Matter-of-fact, we have one very nice & polite customer that gets 1.00 in change every night for bus fare on his way home from work.  The bonus is we also turned him into a laundry customer because he sees the place is always clean in order, machines running, and we see him on quasi-regular basis.

 Conversely, if we see someone getting 10, 20, or more we address it be it immediately or in short order.

 Finally, if your paying close attention to your business, your pulls, & your coin hoppers you should be aware of what's happening to your business in short order.

 I / we do and that is in spite of my being a long distance owner.  It says alot about teamwork & how the business is run.

 Your plan has merit but understand you had a fair chance at mitigating it before it got to this point.

 Good luck.

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Juan
Store Owner/ Employee
Cocoa FL
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12.  RE: Planning in going DCO to challenge competition

Posted 8 days ago
Brian,

THE GODFATHER HAS STEAMMMM COMING OUT HIS EARS, NOSE, MOUTH AND ALL OTHER EXITS

DO NOT GO DCO JUST BECAUSE SOMEONE TOOK YOUR CHANGE.

I ASSUME YOU ARE UNATT , I AM PARTIALLY THAT, BUT YOU CAN IMAGINE WHEN I SEE THEM COME IN....what the GF does. I solve that problem right there n then.

NOW its just a fad for people to use new washers. In 2-4 months they will look bad, broken etc. eventually they will come to you.

In the mean time do a special. All 20lb $1 Mon-Fri, if u cant do TOD pricing. Do it all 7 days for 3mos. Call it Xmas special with banner n all.

DO AS GODFATHER SAYS AND YOU WILL NOT REGRET IT........

AND VERY IMPORTANT.....CHECK TAPE AGAIN IF SOMEONE NOT STRINGING YOU OR A BIZ COMING FOR THEIR CHANGE ORDER

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Godfather
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13.  RE: Planning in going DCO to challenge competition

Posted 8 days ago
Just to address why it took me so long to notice.

I noticed after two collection rounds.  At that point I immediately began reviewing the camera's.  My first thought was that I had a silent partner.  My drop off coincided with my house being tented for termites so I had people in my house when I wasn't around and thought maybe they "found" a key.

The problem was that the "drop" was store wide so I didn't know where to "focus" my attention in reviewing the cameras.  Certain machines?  Rows or machines?  Ect...

As for why I don't stop folks from taking quarters out of the store, my store is only partially attended, so while we do try to prevent people from walking out of the store when an attendant is there, that really isn't an option for 50-60% of the time.

Lastly, it is a inconvenience to change... but as Larry and many other owners who have already made the change have pointed out, that it does come with some benefits for both the customer and owner.

So... from what I've gathered so far, other than being costly and inconvenient to make the change, the plan should still work?

Thanks,

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Brian Clune
Potential Investor
San diego CA
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14.  RE: Planning in going DCO to challenge competition

Posted 8 days ago
Dollars are the new quarters.  It just seems archaic to force customers to stand there and feed 12, 16, 20, 24 or more coins into one machine.
Put yourself in the shoes of a customer and start a few machines with quarters.  It's not fun.  Now imagine if you could start those same machine with 75% less coins.
If you have to worry about penny or quarter price increases just to pay the bills, then maybe pricing is not the real issue.
But back to the OP, switching coin mechs will initially be expensive, but it will prevent your coins from ending up at the apartments.  When those machines are dirty, broken and they can't get quarters, those customers will be back.

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Chris M
Norfolk VA
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15.  RE: Planning in going DCO to challenge competition

Posted 8 days ago
Brien,

As I understand it, 2 issues have suddenly developed over the past few weeks.

1.  A large apartment complex across the street rehabbed their laundry room with new top loaders causing some of your former customers to wash in their QO laundry room which has no bill changer for user convenience.
2.  The tenants continue to stop by your laundromat to use your bill changers to get quarters for use in the apartment complex laundry room.

Your proposed solution is to convert your partially attended laundromat from QO to DCO to end the quarter service for the competing laundry room.  You're also seeking a way to lure back those customers away from the laundry room.

If you convert your laundromat to DCO, I foresee the following advantages and disadvantages:

1.  The apartment dwellers across the street will quickly discover that you have no quarters for them at any time of the day.
2.  Your current customers will quickly discover (through proper signage and Dollar Coin Only overlays by each coin slot) that they need to buy dollar coins from your bill changers.  They will also discover that they now need to use just 1/4th as many coins as they used under the QO system.  This will speed the process of starting your equipment.
3.  In time, new customers will be drawn to your DCO laundromat from competing laundromats simply because DCO is much more user-friendly than QO or laundry card laundromats.  Whether they return a second time depends on how clean and well run your laundromat is.
4.  You will immediately find that your machines can go much longer between collections and your bill changers can go much longer between fills.
5.  Since customers will not be bringing in dollar coins in their purses, you will have to provide all the dollar coins they need.
6.  Coin handling during a collection will be substantially quicker and far less laborious.  Bill handling will be the same as before.
7.  Dryer complaints will decrease because every customer will have to buy a minimum of $1.00 worth of run time.  No more, "I put in 3 quarters and my stuff is still wet."  Consider somewhere between 17 minutes and 24 minutes per dollar coin on a 30 lb. dryer with less time on any larger dryers that you may have.

As far as enticing some of those lost apartment complex customers back - do NOT drop your top loader price to match those at the laundry room.  That makes it too easy for the apartment complex to simply drop their top loader price down to a dollar or even 50 cents.  You never want to compete head to head with any apartment laundry because they have the mindset that they can beat you.  So keep your top loaders at $3 and lower your double loaders to $2.  You're better off with a $2 price on efficient (hopefully hard mount) double loaders than offering a $2 price on water-hog top loaders.  Use clear signage that explains how your double loaders can be filled up to the top and still provide a good wash unlike top loaders which should only be filled 2/3rds up to allow room for the clothes to be pushed through the water by the agitator.  The apartment laundry has no double loaders so they can't duplicate your price.  If possible, you might consider converting these washers to E-cycles (Wash, Rinse, Extract, Done) so you can still make money on this loss-leader washer.



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Larry Adamski
Muskegon Laundromat
Spring Lake MI
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16.  RE: Planning in going DCO to challenge competition

Posted 8 days ago
My suggestion is you must meet or lower the vend price in their apartment laundry room with the same washers (TLs) ,you already have a big advantage over their laundry room is your ultimate dryers and they also realize that ,but they can't eat up your price at $3.00 .
  Your TLs must be able to up charge for warm,hot and extra wash cycles and must be limited amount of number
 if you go with DCO its only fix the quarter bandits problem but can't fix the loosing customers problems .quarters available every where and anytime if they can't get quarters from you they still able to get them elsewhere .
This is I would do :
reduce the number of TLs down to 5-6
TLs vend prices: Tuesday-Friday : $1.25 cold wash ,$1.75 warm wash ,$2.25 hot wash etc ...the others 3 days $1.75 cold wash etc...
 if you have too many TL they will abuse the system and especially the new customers will take advantage of it .
 I don't worry about the belts get burning every two weeks because  new machines under warranty let the Manufacturer handle it you just provide labor to change it .
 I have 3 stores with dollar/quarter coin and I love the dollar coin concept but I'm not ready to go with DCO at this time.

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Linh Nguyen
Store Owner/ Employee
Mobile AL
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17.  RE: Planning in going DCO to challenge competition

Posted 8 days ago
Yes, your plan has merit & should work if you want to take up that expense & trouble.

 Lots of coins are 'archaic' a bit too strong of a word but I can see the point.

 Keep in mind that most customers are creatures of habit & generally don't like change.

My prices for the larger machines (all of them really), is consistent.  I rather (and do) focus in well functioning coin mechs.  Make sure they are all in perfect working order then the quantities dropped into the machine, especially when pricing is consistent, then the coin count discussion becomes inconsequential.

 Again good luck with the impending effort.

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Juan
Store Owner/ Employee
Cocoa FL
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18.  RE: Planning in going DCO to challenge competition

Posted 8 days ago
I've never found apartments to be much of a competitor. They usually just don't have enough pockets to supply the demand. I'd get rid of the tops and put in more of whatever gets the most turns. Make yourself different and better. New tops don't work very well and customers will soon figure out that they aren't spending any more money to use your 20's and are getting done faster. Lowering prices is a race to the bottom and the apartment isn't going away.
 Are you sure your quarters are going there? Nearby merchants might be the culprits. Tokens can be a viable option too.

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Brad Seder
Store Owner/ Employee
Santa Rosa CA
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19.  RE: Planning in going DCO to challenge competition

Posted 7 days ago

Hello Bruce,

The best advice I can give is to stop guessing and make us doing so and building castles in the air. First get real / tangible and measurable facts.

Give us a brake-down <washers (you already gave to us). But and dryers?> of you equipment quantity, size, folding tables, carts, aisles size, heating temperatures, drying price per minutes or per full cycle, ratio dryers to washers poundage, store size and  layout, etc.

The very same break-down of the laundry room apartment complex near your store with new top loaders. And the most important thing how many apartments in the complex, how many people living on that apartment complex, stratification <singles, married with kids, millennials, ethnicity / nationality heritage mix, educational level, old or retired, military / civilian, / blue collar, etc. etc.>

Then during different days at different hours, go there and do a couple of washing loads. TALK / MINGLE / BLEND  with the people doing loads, ask them as many and as valuable questions you see fit in order to learn directly from the devil´s mouth what is happening there.

  1. What is the best time people like to do their laundry?
  2. What is the average laundry load size?
  3. How many loads per week?
  4. Equipment mix, Customer preferences.
  5. How long takes them to do laundry?
  6. Do they have to wait for an empty machine?
  7. Are the dryers hot enough?
  8. Is the laundry room kept clean?
  9. Is the equipment well maintained? Or used to full capacity? Waiting in line.
  10. Are the people lazy to walk to your store? Or is there a problem? Offer them WDF or P-u & D
  11. Are you attended or not?
  12. Do the numbers $ 200 to $ 300 a day divided by " priced them out at $1.50 compared to my $3.00 " . . . HOW MANY TPD THEM AND YOU? This is very important.                                                                                                        Quoting Les: " Their machine count will tell you an estimated TPD to help make sure you only contribute a corresponding amount of the $200 to $300 per day quarter loss to the apartment's TL's. "
  13. How difficult /expensive is for you to get quarters? Talk to the apartment complex manager and ask him to install a change machine for their tenants use.
  14. Etc. etc

Then with of the information / assessment list you and us can have an educated idea which can be the best route to follow without compromising your current operation equipment mix, planned equipment acquisition, changing price strategy, coin conversion from QO to DO and profits

As some members suggested here, give it some time for the all-new top loaders apartment complex lose some shine and novelty, <start burning-up belts, breaking down> seasonal sales drop, neighbors might presently be enamored with the new equipment today but not tomorrow, etc.

You are in a shopping center take advantage of that. Work out something with the other tenants like a cross promotion.

Do not reduce your prices because that is going to send the wrong signal to your current and temporary lost customers that you were probably charging too much and taking advantage of them and now that there is a new competitor in the street you have to back down. If you lower your prices you are as smart as your dumbest competitor at $ 1.50. Think of top loaders as water hogs, you do not want to start losing money on those 8 top loaders. Can you want to do so or afford it?

Larry made to you some very good points. Re-read them.

 

 

 



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Miguel A Gonzalez
DF
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20.  RE: Planning in going DCO to challenge competition

Posted 7 days ago
Lowering prices on a small group of washer during slow days is not  a race to bottom , it's just a way to attract price sensitive customers to fill up empty hours/days . A potential customer walk in your store to get quarters he/she may check your prices out and when he/she see your $3.00 tag on your TL ,they will say no way Thank you and they have the feeling that your all your prices are high.I better stay with my laundry room for $1.50 ,that's why they don't using yours .
 Look at the  free dry concept, they loves the Free word ,Free price 'tag' is lower than 1 cent tag .
 My point is provide the same product (TL)with lower price and make money back in other ways
If you want discount your small front load I would get rid of all TL that's way they can't see your high price on TL .
 I have a camera pointing to front parking lot and that laundry room (in picture above) and I know what kind of business they have. My TLs works efficiently .

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Linh Nguyen
Store Owner/ Employee
Mobile AL
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21.  RE: Planning in going DCO to challenge competition

Posted 7 days ago
Edited by Deward Stout 7 days ago
Brian;

You stated that when you had your T/L at $2.50 people would over load them and burn up your belts.
So why would you want to lower your price so they can burn up your belts and put your machines out of service? !?!
Don't you think they are overloading the apt laundry room machines especially at $1.50?!?!
Wow the apt place will really have their machines burning belts and out of service at a considerable faster rate than yours. Believe me they will be out of service longer there than at your place because you know about it faster and get it fixed faster.
Just maintain you'll be fine.


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Deward Stout
Store Owner/ Employee
Hurricane Laundromat & Storage
Hurricane UT
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22.  RE: Planning in going DCO to challenge competition

Posted 7 days ago
No I wouldn't lower my top loader price which are priced at $3.00 I would just lower my Dexter 20# hard mounts from  $3.00 to $2.00.

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Brian Clune
Potential Investor
San diego CA
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23.  RE: Planning in going DCO to challenge competition

Posted 7 days ago
Edited by Larry Adamski 7 days ago
Guys,

When it comes to top loaders, the customer's financial condition relative to the vend price plays a roll in over-loading.  Consider the following examples:

A customer arrives with a laundry.  The top loaders cost $3.  She puts her whites in one top loader and her darks in another top loader.  Both washers are now full and she still has 2 pair of jeans to wash.  She hesitates to put the jeans in a third top loader as that will cost her another $3.  What will she do?  What would you do?

The same customer arrives with the same laundry.  The top loaders cost $1.50.  She puts her whites in one top loader and her darks in another top loader.  Both washers are now full and she still has 2 pair of jeans to wash.  She hesitates to put the jeans in a third top loader as that will cost her another $1.50.  What will she do?  What would you do?

I think the choice this customer makes for the 2 pair of jeans depends, to a large extent, on the financial condition of the customer relative to the vend price on the top loader.  A low price leader laundromat is much more likely to have price-conscience customers and such a customer is much more likely to jam those jeans into the dark load top loader rather than pay $1.50 or $3 for a third top loader.  However, in a high price leader laundromat, customers seek quality over price.  Here, a customer is much more likely to redistribute her darks into two $3 top loaders with the intent of getting a better wash.  Of course her other option would be to use a $3 top loader for her whites and a $4 double loader for her darks.

So the higher the vend price on your top loader, the greater the chance that a customer will opt out of using another top loader for the jeans.  However, the more affluent and intelligent the customer, the more likely she is to chose an option that provides a better wash over jamming the jeans into the single dark load top loader.

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Larry Adamski
Muskegon Laundromat
Spring Lake MI
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24.  RE: Planning in going DCO to challenge competition

Posted 6 days ago
I agree with Larry about price-sensitivity and overloading TL washers (except I would say affluent OR intelligent lest anyone mistake that all non-affluent customers lack intelligence or vice-versa😀). Our TLs vend for $6 ($1 less than our 20lb front loaders). I haven't had to change a worn/burned belt in about 5 months.

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Yvette Morton Williams
Store Owner/ Employee
Wash & Spin Coin Laundry
Atlanta GA
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25.  RE: Planning in going DCO to challenge competition

Posted 7 days ago
Post a sign thats says something like "50% of change that dispense as tokens that can only be used in this Laundromat.  Thank You for understanding".

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Paco
NorthsideCoinLaundry.com | SaginawLaundry.com
Ft Worth, TX
"Where the wash begins"
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