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Routes to Success (Part 1 of 2)

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dry cleaner route service
Photo: ©iStockphoto.com/Frances Twitty

Bruce Beggs |

Taking Your Service Directly to Your Customers: The Pros and Cons

CHICAGO — The decline of Blockbuster’s DVD rental business that led to bankruptcy and the closure of hundreds of its brick-and-mortar stores across the country last year is a wake-up call for drycleaners, warns “The Route Pro” James Peuster.

Why? Because drycleaning and Blockbuster have something in common: it’s necessary to make two trips for service.

“You rent a movie, you go home, you return it next time,” he says. “You drop off clothes, go home, you pick them back up. Very few retail situations require two trips for service. This is why routes are now essential.”

But the drycleaner who is considering starting route service better be serious about it, Peuster says, because not being fully invested in the effort can create more headaches than they’re worth.

For 10 years, Peuster has been an “on- and off-site coach, specifically for routes.” The goal of his consulting business is “to make sure people do routes right, or not at all.”

GETTING STARTED

For the drycleaner who is just starting a route or is considering one, it’s important to recognize that route building is not the same as opening a store, Peuster says.

“Be willing to build around your store. If you try to be in a completely new area, it might take a little bit longer. Be willing to recognize you’re going to have to invest more in marketing.”

Peuster says the financial goal should be for a route to generate $1,800 in gross sales a week, which he calls the “break-even” from an operational standpoint.

“Each customer that’s on a route, on average, is worth 10 bucks a week in gross sales,” he says. “In order to get to $1,800 a week, you need 180 customers. … If you add 18 customers a week to your route in 10 weeks, then you could have a break-even route.”

Developing a route service requires the acquisition or use of a delivery vehicle such as a van, the hiring or selection of an employee to drive the appointed route, the acquisition or use of some type of computerized route management system, and the hiring or selection of an employee to head up the marketing efforts that should go along with it.

“It’s money. It’s time. It’s patience, recognizing this isn’t going to happen overnight.”

And don’t plan to charge extra for route service, says Peuster, or you’ll be no better off than you were before.

“The bottom line is you’ve got to do it at the same price as the stores. You’ve got to do it for free. You can’t charge more for routes. It’s like opening up a drop store. You wouldn’t charge customers more to go to that drop store because it’s not making a profit yet.”

GETTING THE WORD OUT

Marketing your routes is as important as the nuts and bolts of your delivery service, Peuster says. “We strongly go with the face to face (approach). Drycleaning is such a personal service. If you do direct mail or bag drop, it becomes a lack of a personal touch.

“You can plant seeds with direct mail and door hangers. You definitely have to have a website with a sign-up sheet. You have to look like you’re in the 21st century. But you can’t just rely on one (method).”

He suggests that a first step should be trying to convert your current counter customers.

At a time when hard-working professionals and run-ragged parents might be willing to forgo using a drycleaning service because of the cost or the time involved in dropping off and picking up their clothes, communicating the convenience of a route service might be enough to get to keep their business.

“People are working longer and harder than ever before to keep their jobs,” Peuster says. “They’re dressing up more, so there’s good news in that. … Kids are involved in activities more than ever. With the advent of iPhones and Internet, they’re cluttered with more and more stuff on their mind, so picking up drycleaning becomes a back-burner item.”

Since route customers only have to drop a bag full of clothes on their porch or other predetermined spot at home and retrieve the cleaned garments from the same spot another day eliminates the excuse of not having enough time.

“Drycleaning is such a luxury item for many that they start thinking, ‘We don’t need to do drycleaning anymore, we’ll cut back.’ But if you have the routes, it adds a convenience factor, makes it more luxurious for them to use.”

It’s estimated that consumers spend between 17% and 25% more on a drycleaning route than they would if utilizing a store, Peuster says. They’re less likely to use a competitor’s coupon, or even go to another drycleaner on a whim, he adds.

Tomorrow: Getting better...

About the author

Bruce Beggs

American Trade Magazines LLC

Editorial Director, American Trade Magazines LLC

Bruce Beggs is editorial director of American Trade Magazines LLC, including American Coin-Op, American Drycleaner and American Laundry News. He was the editor of American Laundry News from November 1999 to May 2011. Beggs has worked as a newspaper reporter/editor and magazine editor since graduating from Kansas State University in 1986 with a bachelor’s degree in journalism and mass communications. He and his wife, Sandy, have two children.

Comments

Wow-He is right you know!

I have seen James speak and have heard a lot a solid comments about his viewpoints and route ideas. He is right on and the industry does owe him a debt of gratitude for his continual input and support. The delivery side of our business is growing and keeping us afloat. It is challenging but doable.

Other things to think about

Can someone tell me what the NET SALES are as opposed to the GROSS SALES? I appears to be less than sales through the front door. If these routes are really working, why can't someone tell me the NET PROFIT of a route as opposed to the gross profit for routes?

At $1800 a week, how much of that is "really" PROFIT? Clearly, that is less than say the customer driving to the dry cleaner. And to then switch your best customers to routes would be to make LESS PROFIT from your best customers as now you have loaded your routes with your best customers as opposed to have them come through your front door. So while one may think they are making money off of routes, you have just spent more on your best customers in servicing them via routes when they could have driven by themselve to your front door.

I know that WebVan, now bankrupt, delivered groceries to the customers as well as other similar customers, still failed or now barely broke even. The price point for free delivery was, I think, $50 dollars back around 1999-2001. Now, 12 years later, in 2012, it's probably higher before one can get free delivery. And, by the way, everyone needs groceries as opposed to dry cleaning. By the way, all of Wall Street was behind WebVan and the best experts and so on, not to mention the general consensus was behind WebVan and home grocery delivery.

If routes are so good, why are dry cleaners still struggling to survive? Did route add to the a dry cleaners bottom line? It sure doesn't seem so.

show me a cost break down

Again, it's me. I have seen this time, and time again.

Increased sales growth may not mean increased profit with respect to overall short term costs, and just as important, long term costs.

Increase sales may, or may not, mean increased profit. When someone says, "lots of money", "money to be made", "very successfull", "lucrative", "potential market", ask them to show some hard numbers instead of just point to another cleaners.
In other words, WebVan and a host of other grocery delivery companies could be pointed to at one time. But they all failed.

While I am not really sure that rent maybe cheaper than delivery vehicles, delivery vehicles need to be replaced, repaired and maintained far more often say the things in a pick-up station.
Let's look at the 10 years costs of both delivery vehicles vs the costs on a pickup station... And then show me the difference after 5 and 10 years. And are gasoline costs really cheaper than electricity costs of a pickup station? I think that can certainly be debateable now in 2011 and 2012 at $3.00+ / gallon.
This thing about routes is that it was promoted years ago, say 3, 5 to 10 years ago and gas prices were way different than they are now.

Another thing is that even though Blockbuster is essentially a 2-trip for service, this is not necessarily true for dry cleaning / laundry as BOTH a drop off and pick up can many times happen on a SINGLE trip and this is especially true for repeat and good customers.

Next, drivers are really a lot harder to find, get and train and keep than what it appears at first. This is not Domino's as customers always have a far more varied and complicated set of items and possible stains than say pizzas toppings.
And now, there are saying you have to pay your drivers, "Commission"??? Even more added cost AND not your route is dependent not on a driver
but a salesman who may or may not stay with you. Next, what about vacations? Sickness? These drivers are now salesman and if they go
your sales will most certainly suffer.

Plus, I now read on the internet that the number one thing on routes is to keep them tight, local, and consolidated. Wow, that sounds like
it's trying to serve the same customers as pickup station would.

 

BEST CUSTOMERS are NOW are LESS PROFITABLE
Lastly, if one were to move a dry cleaners best customers to routes, that would be the similar to moving your best customers to your pickup station. Hence, one would be moving their best customers to their pickup station which only is an added expense. Thus, less profit from one's best customers.
 

Routes are gravy

I have a small route of select customers.  Luckily I do not have to have them but I just consider them gravy:)  I couldn't imagine having a route be my main source of profit as there are more customers out there who rather have face time with their dry cleaner:)

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