The Overview of Operating Costs for Laundromats Worldwide

When the global laundromat industry is flourishing, it is important for investors to accurately grasp the operational cost calculation method. Then, we will analyze the components of the operational costs to help investment decisions.

Equipment Procurement

The core asset of a laundromat is laundry equipment, including automatic washing machines and dryers. The costs of purchasing equipment depend on brand, model, and quantity. Generally speaking, the price of a quality automatic washing machine ranges from thousands to tens of thousands of yuan (RMB). The cost of a dryer is similar. The price of a washer and dryer combo is higher than the price of an individual washer plus an individual dryer. Moreover, investors should also consider the costs of maintenance and replacement. Though the price of intelligent equipment is 10%-30% higher, the intelligent equipment helps to enhance competitiveness.

Store Rental

❑ High rent

The location of a store is vital because it directly determines the level of rent. In the world’s first-tier cities, such as the core business districts of New York, Tokyo, Shanghai, and so on, the population is dense, and the consumption potential is huge. Monthly rents often exceed $100 per square meter. In some of the prosperous areas, such as Ginza in Tokyo and Fifth Avenue in New York, rents have soared to $300 per square meter per month.

Places around universities and large communities are also popular because of stable customer resources. The rents are also high, usually between $100 and $300 per square meter per month.

❑ Low rent

In contrast, in second and third-tier cities, such as Jaipur in India, Chengdu non-core area in China, Curitiba in Brazil, and other places, the rents in ordinary areas are relatively affordable. The monthly rent per square meter is roughly 30-100 US dollars.

❑ Example

Taking a common 50 square meters of laundromat as an example, If it is in the top business district of a first-tier city, its monthly rent may reach 15,000 to 45,000 US dollars. If it is in the ordinary area of a second or third-tier city, the monthly rent is only 1500-5000 US dollars.

Decoration Layout

The cost of decoration is closely related to the style of the laundromat. Different styles contribute to different costs. For ordinary laundromats that focus on the mass market and pursue concision and efficiency, the practical-oriented simple decoration can meet their needs. The cost of every square meter is 500-800 RMB. However, delicate decoration is needed if people want to build unique and innovative laundromats with casual and social functions just like laundromats & cafes. The cost per square meter can jump to 1,500-3,000 RMB.

For a 50-square-meter store, ordinary decoration requires 25,000-40,000 RMB (equivalent to 3,500-5,700 US dollars), while exquisite decoration requires 75,000-150,000 RMB (equivalent to 1-21,000 US dollars).

The Cost of Water, Electricity, Steam, and Gas

The laundry equipment consumes a lot of energy which makes the costs of water, electricity, steam, and gas become the non-neglectable running costs. People should consider the daily lighting, air conditioning cooling, and heating, and the electricity costs of equipped ironing machines. Also, the actual costs of water and electricity fluctuate greatly because of different energy price policies, the volume of business, and the energy efficiency grade of the equipment. As a result, people must choose equipment with low energy consumption. For example, the washer must have a high dewatering G-force and the dryer must have a low energy consumption and a high efficiency.

Detergent

The cost of detergents seems little but many a little makes a mickle. Choosing intelligent laundry equipment can control the costs of detergents. For example, Kingstar self-service washing machines have an optional automatic feeding system which is an open signal interface to any brand dispenser. It can achieve accurate chemical material, reduce waste, and save labor, making the laundry quality more stable.

Labor

Small laundromats usually hire 1-2 employees to do the regular maintenance of equipment, cleaning of the stores, and answer the customers’ questions.

However, if it is a large store that is open 24 hours or located in a busy commercial area, the corresponding labor costs will increase.

For example, when hiring four employees in emerging economies, based on an average salary of $1,500, the monthly labor cost is $6,000.

Maintenance and Depreciation

The annual maintenance fee of ordinary equipment is 5%-10% of the equipment purchase amount. The depreciation is calculated in 5-8 years and the annual depreciation cost accounts for 12.5%-20% of the purchase amount.

● Kingstar commercial self-service machine series

The whole structure of Kingstar equipment is designed and manufactured according to the 20-year service life. The whole machine is guaranteed for 2 years, and the main drive is maintenance-free for 10 years, which can greatly reduce the cost of maintenance and depreciation.

Marketing and Promotion

Starting up a business and attracting customers need marketing investment. The production of materials, platform advertising, and promotion costs 5000-20000 US dollars one-time, and the subsequent monthly investment to consolidate popularity is 500-2000 US dollars.

Investors need to consider costs in conjunction with local conditions in order to gain a firm foothold in the industry. For more tips and industry insights, stay tuned!