Laundry Chemicals – Are You Getting What You Pay For?

Laundry Chemicals – Are You Getting What You Pay For?

 

Laundry cost factors should always be considered when selecting your chemical supplier. Based on national averages this is where you spend your laundry dollar – Labor 40%, Linen Replacement 20%, Utilities 15%, Indirect 15%, Chemicals 10%. Since the chemical cost is the smallest factor why do many laundry managers base their chemical vendor choice solely on price? You can’t be too careful when choosing a chemical program since you need to know for sure how the other laundry costs are affected.

FLAT FEE/PER ROOM PROGRAMS
This method of selling products has become hugely popular as it is easy to understand. It is based upon the chemical supplier bidding a ‘Flat’ rate per month per occupied room.

  • Pros – This program allows the buyer to easily budget what they will be spending. The buyer doesn’t pay for chemicals until after they have been used, and in addition, they usually are allowed 30 days to pay that bill. This is step budgeting with an extended payment plan. The customer doesn’t have to watch their costs or monitor the amount of chemical being used.
  • Cons – It’s easy to simply choose a chemical company with the lowest per room rate, but if it sounds too good to be true then it probably is! Where are the checks and balances? The supplier is given control and often the result is higher costs for Labor, Linen, and Utilities because they must use more hot water, longer wash times, and excessive Bleach to cover for lower usage of expensive Detergents and Softeners to stay profitable. Also, higher cost items such as ready to use products, spotting treatments, and reclaim powders are not included in the rate yet the need for these items is increased.

BUYING PRODUCT DIRECT
With this program the buyer purchases the products out-right, no guarantees, and no limitations. In this program the customer has full control of the laundry operation and costs.

  • Pros – The buyer selects the supplies based on total laundry cost including hot water use, total water consumption, utilities, and washer cycle times. They can require information on the types and amounts of chemicals to be used. The customer can monitor all purchases and control both usage and cost because they recognize that chemicals are the laundries smallest cost factor.
  • Cons – Selecting a chemical vendor based upon all aspects of the laundry can take more time than just asking for a price quote. The buyer must understand the differences in quality of service and levels of expertise from one company to the next. One must consider references, local reputation, and the availability of additional services (such as service and repair of the laundry equipment or energy savings programs such as Ozone) before choosing the best overall program. The customer must have a level of understanding with the supplier that chemical costs are important but that the larger cost factors are being addressed as well.