Factors to consider before starting a dry cleaning delivery business.
Like many businesses, dry cleaning business profit relies on volume.
In an industry that has thin profit margins, increasing the customer base, as well as the average number of garments per ticket, is crucial. One strategy for increasing volume in a dry-cleaning business is to implement a pick-up and drop-off system, making it easier for customers to use your services.
But as we’ll learn, deciding to offer this service, and executing it effectively, is never simple…
Will Your Market Support Dry-Cleaning Pick-Up and Drop-Off?
Delivery in dry-cleaning is driven by market opportunity. Quite frankly, some markets simply don’t need and won’t support a pick-up and drop-off service, so you need to start by conducting thorough market research and understanding your area.
The best customers for dry-cleaning delivery are busy white collar workers. If your area has business and commercial centers with professional offices for accountants, lawyers, doctors, and other dress-suit professionals, you may find success with delivery. In general, middle and upper-class neighborhoods and business districts will offer the best opportunity for dry-cleaning delivery.
Military bases are also good markets for dry-cleaning delivery, as people in uniforms often need dry cleaning for their formal attire. However, you’ll need access from base leadership to access this market.
Is the Competition Offering Pickup and Drop-off?
If, after looking at the market, you think there is a good opportunity for dry-cleaning delivery, take a look at your competition. Are they offering delivery? If you find that many people are already offering this service, if will be more difficult to edge your way into the market. Certainly not impossible, just more complex.
If you find competition, learn what you can about the details. How much are they charging? Is it a big demand? Are they overwhelmed with deliveries or is it simply a side note to the overall operations? Try using their delivery service yourself and see if there is room for improvement. All of this can give you valuable information on the market and potential opportunity.
If your competition is not offering delivery, it can be tempting to see only a gold nugget. But why are they not offering? Have they tried in the past? Have they failed? Find out if there are serious reasons for not offering or if it’s something they just haven’t tried.
What is the Investment for a Pickup and Delivery Service?
Now you need to start calculating. There are many expenses that will be involved in delivery, starting with the costs of dry cleaning business equipment. You’ll need a full-size fan that is equipped for garment delivery, preferably with hangers. You’ll need cellphone service for the driver, insurance for the vehicle, and bags for transporting the clothing. All of this can easily cost tens of thousands of dollars. How does this compare to the potential profits?
What can you charge?
Now you need to think about how much you can charge for the pick-up and drop-off services, if you charge at all. There are dry cleaning pickup and delivery service businesses that offer delivery free of charge for the simple purpose of increasing their customer base. By offering free pick-up and drop-off, they maintain a steady stream of loyal customers.
But free service is certainly not for everyone. When considering a charge for delivery, think about the cost of vehicle maintenance, fuel, insurance, payroll, and other factors. Also, you can charge a flat rate or charge by the mile; is one better for your business?
Tips for Implementing Pickup and Drop-Off
Start Small, Branch Out if Successful
When starting any business or new project, it’s often best to start small, make minimal investments, and see if the program takes off. Essentially, you want to dip your toe in the water before diving in. Don’t buy an expensive new van fully equipped with hangers and decals. Instead, start with a small offering of dry cleaning delivery to a small section and see how it goes. If you find that your customer base responds positively to the service, you likely have the potential for future growth.
Survey Your Customers, Neighborhood
One of the best sources of information is your current customers. Survey them to find out if they would use dry-cleaning delivery. If so, would they be willing to pay? Would they have more garments per order? Would they recommend your services to their colleagues? While current customers are not the only source of information (after all, delivery is essentially about expanding your customer base), they can provide reliable information.
Put Someone in Charge of Delivery
To keep the whole operation running smoothly, it helps to have a single trusted person in charge of the delivery services. Depending on your needs, this person can either work in a manager-style role, directing personnel who actually make the drives, or as the one person who does all the deliveries. Remember that the delivery person is the point of contact between your business and the customers, so they should be friendly, positive, and focused on service.
Have the Right Technology Support Your Delivery Business
To operate a successful delivery business requires a clear process and an organized staff. But how do you deliver a consistent experience free from errors? Imagine if you grow your business to manage 50, 100, or more orders
With these tips, you can make a decision on delivery and implement it the right way!