HOW TO NEGOTIATE FOR NEW EQUIPMENT

Most people who buy new Laundromat equipment are in an unequal position with their distributors because they do not know how much profit the distributor will make on a sales agreement.  In order to negotiate the best price, it is important to have an idea of how much negotiating you can do with your distributor. Where the distributo has put up his own money to build a Laundromat and he is selling you a "turn-key" business there is little room to negotiate on the sales price, but when you are buying equipment for a Laundromat you already own, a little knowledge may save you a lot of money.

The discounts received for the washers and dryers sold by distributors are at the following levels. Dryer discounts are around 40% to 45% from the Manufacturer's List Price.  Washer discounts are usually 43% to 50% from the Manufacturer's List Price.  Auxiliary items, such as tables, benches, bill changers, heaters, laundry carts and so forth, have lower discounts ranging from 30% to 35%. You can request the Manufacturer's List Price from either the manufacturer or the distributor.

Laundromat distributors get some special deals and incentives provided by equipment manufacturers. Let's start with the year-end bonus.  The only manufacturer granting large year-end bonuses to its distributors is Dexter.  They have paid up to 10% of the yearly purchases of a distributor in a year-end payment. 

The fair market purchase price for a particular brand can be estimated by placing telephone calls to a few companies selling the brand outside your state or territory.  Get a few price quotes for the equipment you want and compare it to what your local distributor is charging you. Distributors have specified territories in which they can sell, so do not lie, but you may not want to share you are comparison shopping.  When finished, you will have a comparison point for your own purchase.

Another area providing distributors with potential profit is the practice of charging for freight when the distributor receives free freight from the manufacturer.  When freight is listed on your sales contract, you probably believe you are only repaying the distributor for his freight costs.  This is not always the case.  Dexter, Speed Queen, Ipso, Huebsch, and sometimes Conti G can receive free freight on full truckload orders.  When placing a large washer and dryer order ask to see the actual freight bill of the trucking company.

A limited number of distributors increase their profit by charging for items that are included free to them from the manufacturer.  Fill hoses, drain connectors,coin boxes and slides are sometimes shipped with the equipment, but your distributor may elect to charge you for these items on your contract. Verify what is included from the manufacturer by contacting the appropriate factory representative.

Finally, higher distributor profit can come from steering you to purchase items that are overstocked, discontinued or aging stock sitting in the manufacturer's warehouse.  Distributors may receive a special discount on these items, but they may charge you their full selling price. Specify on your order that "all washers and dryers are current models and have not been been produced more than 360 days prior to this order."  At least you'll get the latest model with all the improvements and changes and not a two-year-old model that has been a slow seller or discontinued.

Now that you know some important information, you can negotiate with insight because you know what the distributor tries to keep to himself. This information is provided so you can be a knowledgable buyer, not to hurt the distributor: be fair and leave at least 10% to 20% profit on the table so the distributor can be in business when you need more equipment, service, help, training or when you build your next successful Laundromat.

Keep in mind that price alone should not be the only consideration in a purchase. The new Super High Spin washers sold by ADC, Conti G and Wascomat/Electrolux must be evaluated before buying. Initial price is only part of the total cost of ownership and the energy savings of these Super High Spin washers make them the clear-cut winner in any true cost comparison. Good Shopping!

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