A business that I’ve taken some time to research is the laundry pick up and delivery service. The reason I’m so fond of this business is that a person doesn’t need to own and operate a laundromat in order to enter into this business.
Why a Laundry Pick Up and Delivery Service?
One of the reasons I’m fond of the laundry pick up and delivery service is that there is a low cost of entry and not much is needed in order to start. You need very little to start with.
On Demand Is Not Needed to Start a Laundry Pick Up and Delivery Service?
If you’re thinking that you’ll need a mobile up and will need to spend your time taking on demand delivery you couldn’t be further away from what is needed to start a laundry and delivery pick up service.
There are a ton of on demand laundry pick up and delivery services where a person can request a pick up time and a person will drive across town to fulfill the order. In my opinion this makes life more difficult then what it needs to be.
How I Would Start a Laundry Pick Up and Delivery Service
The first thing I would do is identify an area that has a high percentage of apartment buildings. It’s true that many apartment buildings have laundry rooms but it’s also true that many apartment buildings don’t have a laundry room capable of serving all the tenants.
Once the area is chosen the next step is to find a laundromat that offers drop off service but does not offer laundry pick up and delivery service.
You’ll be surprised as to how many laundromats do not offer pick up and delivery services. The fact is that most laundromats are owner operated and the owner cannot simply leave the laundromat unattended to pick up a few a few bags of dirty laundry.
Second, I would visit the laundromats that are within my chosen area and identify those laundromats that don’t offer laundry pick up and delivery services but offer laundry drop off service.
I would check the prices for the drop off service and compare the prices to get an idea of what the average cost for drop off service is in that area. For example, I’ve done the legwork and have arrived at an average cost of $.90 per pound for drop off service.
Third, I would research the average cost of laundry pick up and delivery services in that area. For example, I do my research and discover the average price per pound for laundry pick up and delivery service is $1.35 per pound.
Four, I need to calculate my potential profit margin per pound. Using the above numbers of an average cost of $.90 per pound for drop off service and my average cost per pound for laundry pick up and delivery services of $1.35 per pound my potential profit margin is $.45 per pound.
Five, it would now be time to enter into a partnership with a laundromat that does not provide laundry pick up and delivery services but does not provide drop off service.
Six, it’s now time to negotiate mutually agreeable terms. In my opinion even if I were to have a 10 pound minimum for my service my potential profit on 10 pounds of laundry based on my potential profit margin of $.45 per pound leaves me with a profit of a mere $4.50 per pound.
The Selling Proposition
In my opinion, even if you have zero sales experience the selling proposition to a potential laundromat partner is an easy one. If you don’t know, most laundromats make approximately half of their profit on Sunday.
In fact laundromats make most of their money Friday through Sunday and make a few dollars Monday through Thursday. Laundromats don’t make money if the washing machines and dryers aren’t spinning.
The simple selling proposition is that you’re going to provide that laundromat with revenue they wouldn’t have without you.
For example, “Mr. or Mrs. laundromat owner. I noticed that you don’t offer laundry pick up and delivery service. I operate my own laundry pick up and delivery service and would like to utilize your drop off service for my service.
I know you charge $.90 per pound for drop off service but how much would you charge me to wash, dry and fold my customers laundry?”
Of course, I already know that I need that cost to be $.60 per pound although I’m not going to say so as no matter what the laundromat owner comes back with I’m going to show him or her how much money I can potentially make him or her based on my target of $.60 per pound.Most laundromats have washing machines that range from 20 pounds to as much as 50 pounds. However, most drop off customers laundry will be washed in a 20 pound machine.
For example, the laundromat you’re attempting to partner with charges $2.00 for a cycle in one of their 20 pound washing machines. In order to dry the load the laundromat charges $1.00 for twenty four minutes.
A self serve customer will spend $3.00 to wash a 20 pound or less load of laundry plus the cost of detergent and dryer sheets.
The laundromat’s drop off service at $.90 per pound to wash that same 20 pounds of laundry will charge that customer $18. At my target of $.60 per pound that laundromat will charge me $12.
Why would the laundromat take a hit of $6 per customer?
The answer to the above question is that the laundromat is not taking a hit. In fact they’re generating revenue of $12 per customer for a customer they only have because of you.
“Mrs. laundromat owner. You and I know that you’re not generating revenue unless your machines are spinning and I’m going to help you make those machines spin.”
Crunching the Potential Per Customer Profit of a Laundry Pick Up and Delivery Service.
My service requires a 10 pound minimum and I charge $1.35 per pound. I’ll use a number of an average load of 15 pounds for average gross revenue of $20.25 per customer. Deducting my cost of $.60 per pound my net profit per customer is $8.25 per customer minus my cost of gas to drive to the pick up location and to the laundromat and cost of gas from the laundromat back to the drop off location.
Of course I want my pick up locations to be as close to the laundromat as possible. I personally wouldn’t drive any longer than 10 minutes from the laundromat.
Remember this wouldn’t be on an demand laundry pick up and delivery service it would be a laundry pick up and delivery service route?
A Laundry Pick Up and Delivery Service Route?
Yes, a laundry pick up and delivery service route. My entire laundry pick up and delivery service is based upon serving tenants of apartment buildings.
For example, there is a large apartment building a few blocks away from my laundromat partner. I will market to those tenants by stating that every Monday my company will pick up their laundry by 10AM and deliver it back to the building by 10AM on Tuesday.
Of course the larger the building the greater my potential to obtain a steady stream of customers. If this particular building has 30 tenants I would love to obtain all 30 as customers but even getting five steady customers from that location would be great.
With only 5 customers from that building at an average profit of $8.25 per customer that one stop is generating $41.25 in revenue. Another way to look at this is that for every 10 customers I’m generating revenue $82.50.
How Much Money Do You Want To Make From You’re Laundry Pick Up and Delivery Service Route?
The reason I like the laundry pick up and delivery service route business is that you can make as little or as much as you want. It’s as easy as setting a target and getting to that target.
For example, my laundry pick up and delivery service route would have a daily target of 40 customers per day, four days per week or 160 customers per week.
It may seem like a lot but remember, the target is to service apartment buildings. The larger the apartment building the better opportunity there is to hit the target.
My target of 40 customers per day may be from 2 buildings or 6 buildings. 160 weekly customers at an average profit of $8.25 per customer = $330 per day times 4 days per week = $1,320 per week in revenue or $68,640 per year. Even if I spent $100 per week in gasoline and my insurance costs me $200 per month for car and business insurance my profit before taxes is still $1,020 per week.
It’s a rather simple business model. Laundry picked up on Monday is washed on Monday and delivered on Tuesday. After delivering on Tuesday morning I pick up Tuesday’s laundry.
Monday for Tuesday, Tuesday for Wednesday, Wednesday for Thursday and on Friday all I do is drop off Thursday’s loads and use the rest of the day to obtain another location if needed.
Even if you simply want to supplement your income a person can easily make an additional $300+ per week operating a part time laundry pick up and delivery service route.
Even if you don’t have many apartment buildings in your area you can feel the market out by contacting nursing homes.
What You Need to Operate Your Own Laundry Pick Up and Delivery Service Route
Not much is needed to operate a laundry pick up and delivery service route. A reliable vehicle, a business certificate, a catchy name and marketing flyers. Of course, it’s best to check with your county, city and state for business requirements as they will differ.
Tell me what you think? Do you like this business model or dislike this business model? Do you operate your own laundry pick up and delivery service? If so how is it going for you?