CLA Connect Open Forum

discount on buying new washers and dryers

  • 1.  discount on buying new washers and dryers

    Posted 02-10-2019 17:47
    Hello every body.
    Do you ever have any experience in getting discount while buying new washers & dryers? I am about to do that, I have received some discount from the supplier, however I am not still happy with the price.
    Thanks

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    reza
    laundromat owner
    New York City
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  • 2.  RE: discount on buying new washers and dryers

    Posted 02-10-2019 17:54
    Edited by Michael Walsh 02-10-2019 19:06
    Reza,

    I could be wrong but it seems like the "when" you buy is a factor on what it will cost discount or otherwise.

    For example ... if I remember right when I got large amounts of brand new equipment ... I resisted being in too much of a hurry.  So an offer was made & then because the sales boss had some other shipments from the factory that he needed to bring up to quota ... he finally came to be within range of what I could afford or willing to proceed with.

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    Michael Walsh www.kingkoin.com
    King Koin Laundry, Car n Dog Wash
    Bismarck ND
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  • 3.  RE: discount on buying new washers and dryers

    Posted 02-10-2019 18:15
    My distributors are pretty fair with their markups (although I know they get kickbacks like car dealers).  I really hesitate to buy new, though.  The baseline prices of equipment is insulting.  I've been going with the whole, "Buy the low-mileage car off lease" philosophy, I try to buy exactly one generation old machines for between 1/3 and 1/2 of the price of new.

    I haven't been in business long enough to know if this is the right way to go, but the kicker was that when I was remodeling, I could replace my entire store with used for the exact same price as replacing 1/4 of my store with brand-new.  Seemed like a no-brainer.

    I haven't really had any mechanical challenges either, other than coin jams and bad coin drops, which really isn't a function of the machines themselves.

    I understand distributors (and car dealers) have to make a profit just like I do.  My problem really isn't with them, it's with the lack of true price competition in our industry.  It's like Ivy League colleges:  you're going to pay the same tuition no matter where you go.

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    Luigi
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  • 4.  RE: discount on buying new washers and dryers

    Posted 02-10-2019 20:56
    Edited by Larry Larsen 02-10-2019 21:01
    Let me begin with a clarification. Only a few manufacturers provide year end "kickbacks." Some do provide free freight for full truckloads and others share a little promotional advertising.

    I am not aware of any manufacturer who pays distributors for any labor or startup corrections. Your distributor is paying for this out of his own pocket. In fact when you receive a warranty part all the cost of stocking, processing and return costs (try paying for sending in a motor) are paid for by the distributor. No wonder distributors hate five and ten year warranties.

    Since the auto dealers comparison has been introduced, let's continue in that vein. Unlike a car dealer's inventory of used cars, no one buys all new equipment every year to impress their friends and neighbors.

    I'm surprised at how many otherwise knowledgeable people think they can buy used equipment the same way they buy a used car.  There are loads of one year old cars with five thousand miles on the odometer available, not so with Laundromat equipment.

    You buy new washers and dryers because you're paying more to keep them running, in time and money, than a monthly payment would be on new equipment. There are actually few near new pieces of used equipment available on the open market. At best, you're likely to buy equipment that has had 20% to 50% of its useful life expended.

    In the millions of dollars I have bought and sold in used equipment over the years, the highest quality has been the equipment repossessed by lenders. This is usually only two or three years old but the chance to find these deals just doesn't come along very often.  Near new equipment is rare.

    In addition to frequent failures costing you customers and reputation, new equipment is purchased because experienced owners see a feature they believe will make them more money. They also like the benefit of the super long warranties offered by so many manufacturers.

    There is so much competition among the brands, that distributors find the replacement business a small part of their profit. The money is made in building new stores, brokering stores and selling parts.  You only lack competition when you insist on only buying a single brand.  If you shop brands, there is plenty of available choices, deals and competition.

    If you want to make exceptional money in this business it helps to put in hard work, in addition to learning repairs, by learning the skills of lease/purchase negotiation, advertising/promotion and employee/business management so one day you can buy the latest equipment when you find a new feature you want to have in your Laundromat.

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    Larry Larsen
    Laundromat123.com
    Anaheim, CA
    Distributor - Insurance - Consulting
    Cell: (714) 390-9969
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  • 5.  RE: discount on buying new washers and dryers

    Posted 02-11-2019 07:18
    Edited by Larry Adamski 02-11-2019 07:25
    Larry L,

    Bravo, bravo!  Well said.  I  suspect that some who extol the fake economy of buying used have never bought new.

    Just so others know - I am NOT a distributor,  just a laundromat owner who has bought hundreds of new washers and dryers.

    TIP - I  don't pester my distributor with warranty replacement of minor items nor do I call him for technical advice.  He knows that if I call him, it's likely for a quote on equipment.   Who do you think he will quote a lower price - me or a newbie?

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    Larry Adamski
    Muskegon Laundromat
    Spring Lake MI
    (616) 566-1987
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  • 6.  RE: discount on buying new washers and dryers

    Posted 02-12-2019 16:22

    so one day you can buy the latest equipment when you find a new feature you want to have in your Laundromat.
    Larry Larsen,  02-10-2019 20:56
    A bit insulting, but whatevs.

    Tell me again how paying 50% less for Dexter A models than brand-new Dexter C models is going to put me somewhere behind the eight ball?

    I have $150,000 in my pocket I wouldn't have had.  Machine repair costs have been negligible.  A couple water valves and three plastic faceplates, maybe $200?

    But your point about the fact that good used equipment is rare.  That is correct.  It's important to jump on an opportunity right away.  I've bought only one machine off Ebay, I don't think good stuff ever makes its way all the way there.

    And I still claim, with evidence, that with the geographic dealer system, there is far less price competition than would benefit the buyer.  Most equipment from most manufacturers is about the same price.  Unless you have a "low price leader" you can suggest.



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    Luigi
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  • 7.  RE: discount on buying new washers and dryers

    Posted 02-12-2019 16:43
    Everyone has a right to spend their money their own way.  If you can get great prices on near new equipment, you are yards ahead of the average owner.

    In my experience I've seen too many newer owners buy overpriced used equipment. The equipment marketed as "rebuilt" is especially concerning , since I don't know of any company that actually rebuilds frontload washers for resale. (I'm sure some route operators still take their toploaders completely apart and replace most parts, but they don't sell them to the public.)

    Sorry you're having pricing problems with your local distributor. Maybe consider a different brand or maybe you should buy a distributor yourself. You'd probably make a really good one. Let me know if you want to move to California and work with me. I'm getting on in years and would consider a partner or a sale.

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    Larry Larsen
    Laundromat123.com
    Anaheim, CA
    Distributor - Insurance - Consulting
    Cell: (714) 390-9969
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  • 8.  RE: discount on buying new washers and dryers

    Posted 02-12-2019 18:04
    Edited by Larry Adamski 02-12-2019 18:18
    Luigi,

    I'm up for the challenge.  Let's see if I  can spend the $150,000 you saved (hypothetically) by buying used Dexter A models instead of new Dexter C models.  Well, first you will have to pay income tax on that $150,000 so let's figure $40,000 for that.  The A models are less efficient so let's figure $1,000/year in higher utility bills.  That's $10,000 over the 10 year expected life of your used Dexter's.  Your used Dexters are also less attractive than new C models so we must assume that the growth of your customer base will not be as strong.  Let's assume a declining scale difference in growth from $30,000 In year 1 down to $10,000 in year 5.  That's another $100,000. when amortized over 5 years.  Then there is the increased risk of new competition due to your dependence on used rather than new washers.  If you're unlucky, this could cost you $100,000 in lost profits or it could cost you nothing if a new competitor never materializes.

    So let's see where we're at here.  All these additional costs associated with buying used Dexters add up to at least $150,000 and possibly as much as $250,000 over the next 10 years of ownership.  This is over the cost of buying, shipping and installing the used washers.  It appears that you're paying at least as much for the used Dexters as you would pay for the new Dexters when all differences in the purchases are considered.  So you're paying for new equipment and getting old equipment.   How is that a good deal?

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    Larry Adamski
    Muskegon Laundromat
    Spring Lake MI
    (616) 566-1987
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  • 9.  RE: discount on buying new washers and dryers

    Posted 02-13-2019 16:54

    Well, first you will have to pay income tax on that $150,000 so let's figure $40,000 for that.
    Larry Adamski,  02-12-2019 18:04
    Um, no?  This isn't correct?
    The A models are less efficient so let's figure $1,000/year in higher utility bills
    Larry Adamski,  02-12-2019 18:04
    Again, no?   I can convert the A model to a C model by changing the computer boards and a water level sensor.  They'll spin faster, but I don't know that drier clothes coming out save me any money, since i don't believe in free dry.  Customers still pay their $.75 to dry.


    Your used Dexters are also less attractive than new C
    Larry Adamski,  02-12-2019 18:04
    I dunno.  I can't tell the difference.  Maybe?


    increased risk of new competition due to your dependence on used rather than new washers.
    Larry Adamski,  02-12-2019 18:04
    Gotta call "nuh uh" on this.  Wha?  It's not like I have 35 year-old Wascomats.  My machines looks brand-new, best part of Dexter is that stainless.
    It appears that you're paying at least as much for the used Dexters as you would pay for the new Dexters when all differences in the purchases are considered.
    Larry Adamski,  02-12-2019 18:04
    Nope.  The only argument that would make sense here is the cost of maintenance...that will be a real difference, if and when it rears its head (it hasn't yet, but presumably will before these things get scrapped).  All of the other arguments you used are unconvincing.  I'm going to lose customers to a new store that has slightly newer machines?   Nah.  I have nicer machines than anyone around me and nobody is building new laundromats.

    Look, I get it.  There are a lot of strong arguments for buying new.  The best one is the efficiency, which in my case is specious, since C models don't save 20% or 30% over A models.  The next best one is maintenance cost, the third is customer appeal.

    But new machines are crazy expensive.   We've had this discussion before:  the market is not competitive, which is proven by the fact that manufacturers are actually able to price their machines by the amount of profit you're going to make off of them, instead of by earning a reasonable profit after their costs.  This is the area of an oligopoly, a T1200 should not cost $12,000, nearly triple the cost of a T300.  It has two more water valves, a couple hundred bucks worth of extra steel and maybe a bigger motor.  If you ever took an economics class, this would be familiar.  They're able to capture future profits, which is the opposite of a competitive industry.

    Anyway, I jumped on an opportunity and bought a whole bunch of creampuff machines and have been glad ever since.  I also have not found any sort situation like that ever again, I've had to pick and peck to find the few to complete my store.

    For our Panama friend, I don't think he'll be well served by paying full-boat retail on brand-new top-of-the-line equipment.  If I were him, I'd buy a couple pallets of Speed Queen top loaders and several used Dexter stacks and see if my guess was right.  Once he knows the market, then it would make sense to model out some great stuff.

    Lastly, I'm a huge proponent of buying new, especially if one is stuck with horrifyingly inefficient worn-out junk.

    I'll leave the question out there, it's a real question:  who is the low-cost/low price leader in manufacturers?  Pricing is so opaque, I don't know the answer.



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    Luigi
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  • 10.  RE: discount on buying new washers and dryers

    Posted 02-13-2019 17:35
    Luigi,

    Well, if $40,000 in income tax reduction is not a relevant consideration then I  feel sorry for you.

    Your other arguments ring hollow as well.

    Good luck with your Dexter washers.

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    Larry Adamski
    Muskegon Laundromat
    Spring Lake MI
    (616) 566-1987
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  • 11.  RE: discount on buying new washers and dryers

    Posted 02-12-2019 00:21
    Send me a PRIVATE MESSAGE
    AND THE GODFATHER
    WILL TELL YOU THE REAL PRICES
    YOU SHOULD PAY....

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    GODFATHER
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  • 12.  RE: discount on buying new washers and dryers

    Posted 02-12-2019 18:18
    Well, Larry A sure made that look easy. 😂😂 I'm always amazed when people try to cheap out on a fundamental part of their business, regardless of the industry. Usually it ends up costing them A LOT in the long run. Usually they're not even aware, this is a good example of that. I learned a long time ago, it's very expensive to be cheap. Cutting corners is seldom a good idea, especially if you're in it for the long haul.

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    Dave Menz
    Queen City Laundry Chain
    Cincinnati, OH
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  • 13.  RE: discount on buying new washers and dryers

    Posted 02-12-2019 19:05
    hi godfather
    I could not figure out how to send a private message.

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    reza
    laundromat owner
    New York City
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  • 14.  RE: discount on buying new washers and dryers

    Posted 02-12-2019 21:19
    Reza

    The godfather sent you a private message

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    GODFATHER
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  • 15.  RE: discount on buying new washers and dryers

    Posted 02-13-2019 00:17
    Something I would like to see, and I think that it would require the manufactures to be involved is a used turn over program.

    In my local area the farm equipment dealers sell their used equipment multiple times. For example, Farmer A always wants a new combine every year. So the first year he pays for the entire machine and then every year there after he pays a lease payment and gets a new machine. At any time he can discontinue and keep the current machine and not continue trading every year. The dealer then finds farmer B who doesn't want to pay for the full cost of new so buys a 2nd year old machine. Every year he makes a lease payment and gets a 2nd year old machine. Farmer C buys a 3 year old machine and on it goes. They sell the machines out about 6 years before the dealer then sells them to someone who wants to keep it for good.

    Obviously farm equipment is different then laundry equipment, and I realize nobody is going to turn over their equipment every year. But if there was a good market for turning over newer equipment I would certainly be interested. There are stores that can definitely afford buying new and then there are others that don't generate the volume to be profitable buying new. I think that it would require some manufacture involvement because the distributors don't have enough of an area to make the whole thing liquid enough for it to work. Or at least in the less populated parts of the country where I live.

    Bottom line it comes down to the depreciated cost of the equipment. Whether buying new and running it 20+ years and then replacing everything, or selling newer equipment and putting that toward the cost of new, and the difference being the depreciated cost. Personally I would rather run newer, but still need to be able to sell the used for a reasonable price.

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    Jared Friesen
    Wash & Dry
    American Fls ID
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  • 16.  RE: discount on buying new washers and dryers

    Posted 02-14-2019 00:51
    The GODFATHER WILL LIKE TO TELL everyone how the pricing works and I mean real pricing...

    But the TRUTH will Be a violation of the COC

    basic math on FL $1,000-$1,500 per 10lb of washer size.  Thats TTL DELIVERY N INSTALL.


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    GODFATHER
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