Profit in "cheap" rug cleaning?

[tmdry]

I get a lot and I mean a lot of phone calls for area rugs that people purchased for $500 or less, most of the time it was a home depot, crate-barrel, pottery barn, etc. Every once in a while it'll be a hand made rug, but the client purchased it for a whopping $100 bucks in Afghanistan (or which ever country) they were stationed at (majority military). So even though it is a "hand made overseas rug", that at a rug store may be priced $1000k and up, clients do not see the value or spending $3-5+++ a sqft to get the pee out of it.

So, is there $ in cleaning area rug at a "plant"? Keep in mind that 90% of these callers do not want to pay $100-$150 to clean their 8x10 rug (nevermind one that has urine in it).

How do companies that do clean these rugs turn a profit?

As much as I do not want to increase my overhead, I keep getting a ton of calls per week for area rugs (the ones mentioned above), and when we give them a ball park figure (99% of the time), they freak out.

Why should a small business invent thousands of dollars in equipment to clean rugs for clients that do not see value in spending hundreds on cleaning their home depot rug.

I am just trying to comprehend and see if I should in fact, get a large warehouse, spend a few grand in equipment for starters, another few grand in direct marketing to exisiting clients (a few mailings to entire mailing list), plus the additional expense to see if it's worth getting into this side of the biz.

I'd like to hear from the people actually doing it - (and yes we do clean machine made in home over hard surface/carpet, if it doesn't bleed/no urine).

Thank you

 

[SMRBAP]

Bill,

I have a warehouse already, but am in a similar situation in that at some point I hope to have a full plant in house. I have dedicated dusting, soaking, cleaning, and drying stations in my warehouse, and we do more than enough to justify dedicating that space - I already had that space however.

My market, we upsell a lot of rugs in homes we are cleaning wall to wall in - we bring back, clean, and deliver. We have tried sliding that offering in current advertising, made a barely noticeable difference. We have tried separate advertising directly for them, made a noticeable difference however not enough to justify the added ad costs.

Fact is - the cheap rugs outnumber the expensive ones 50-1 or more here. Sounds like you have the same situation in your market. There isn't a $3-5 market on synthetic fiber rugs, at least not one I have found. The clean to replace cost is too close at that price.

I'd prove your market first, before signing a lease, buying equipment, and getting advertising. Some markets for services we can offer are better as "me too" services on our menu sold when you have the chance and considered extra money - and not a service offering you invest heavily in.

Pick the low hanging fruit, expand where opportunity is greatest with the least cost to implement first.

 

[T Monahan]

This is a good thread. This topic is regularly discussed at our Rug Summits among people already in the business of washing a volume of rugs.

I will offer an observation of part of the thread:

Some offer an alternative process, top cleaning, and call it appearance maintenance for $.75 - $1 a square foot. Naturally, in fairness it is done only after they pre-condition the customer by lowering their expectations for final results.

Others can wash, the washables, for a discounted cost around $1.50. This works for rugs that customers cannot justify paying more to clean than for than their initial purchase price. But usually those that can offer this cost have a somewhat automated rug cleaning operation set up for production.

After all, some of these rugs are simply disposable after use and the customer can be told that nicely.

 

[Mikey P]

I send those types of rug owners this video

http://www.youtube.com/watch?v=jPF0qyVuOlg


Considering the current trend in garbage rugs, Tom should think about manufacturing picket fences in these dream rug fag plants he puts together.

 

[Desk Jockey]

This is a good thread. This topic is regularly discussed at our Rug Summits among people already in the business of washing a volume of rugs.

I will offer an observation of part of the thread:

Some offer an alternative process, top cleaning, and call it appearance maintenance for $.75 - $1 a square foot. Naturally, in fairness it is done only after they pre-condition the customer by lowering their expectations for final results.

Others can wash, the washables, for a discounted cost around $1.50. This works for rugs that customers cannot justify paying more to clean than for than their initial purchase price. But usually those that can offer this cost have a somewhat automated rug cleaning operation set up for production.

After all, some of these rugs are simply disposable after use and the customer can be told that nicely.

We always tell them it's not pit washed just so they don't think they are getting something we are not selling. Although I'm sure they already know that because we are not charging pit wash rates either.

While we know you're doing a much better job of deep soil removal and can rinse urine out far better I don't believe the finished product is that much different appearance wise. I think we deliver a pretty good product value wise, its not the Full Monty but then does the rug need that every time? I guess that's up to the client???

 

[tmdry]

I know of some larger companies that do not have minimums if the rug is dropped off at the plant, but if pick up is needed than they'll charge $35-45 for pick up/delivery.

I think that's a good way to go about it as it forces people to drop off the rugs at the plant.

But I also think in order for a company to charge as low as .75-1.00 a foot they need to be doing automated cleaning or else it is just not worth cleaning someone's 4x5 machine made for $35 bucks.

If they are infact charging .70-$1.25 a foot, I can see a larger volume of rugs being done vs the smaller shops who start @ 2.00 a foot and clean 5 rugs a week. It makes more sense to do it more on the lower side for the machine made ones and stick to $3-5 min for the antiques etc.

But can a small business really afford to get into the business side of things w/out adding automated rug cleaning equipment right off the bat? Like Richard mentioned, if they're not all getting pit charged, than are they just getting steam cleaned on a concrete subfloor for appearance cleaning?

I'm trying also to see the options of either going w/ a smaller facility that gets more drive by traffic exposure vs a larger facility that no one would know about and take years for the "volume rug" owners to know about other than pounding the direct mailing campaigns to new and existing clientele.



Thanks for your time.

 

[The Great Oz]

It's possible to make money with discount priced rug cleaning. You have to make sure you're actually taking all of your expenses into consideration though. Lots of new guys don't charge enough to pay for the stuff they damage. Lots of old timers that refused to raise prices over the years have gone out of business. They didn't make enough money to repair their equipment and finally couldn't weather a downturn in volume.

One local bargain-priced rug cleaner uses low cleaning prices as a loss leader and finds profitable repairs on every rug. He cleans when he gets enough rugs to make it worthwhile so getting back a rug that just needs cleaning may take a few weeks.

We clean lots of rugs that cost the same or less than the cleaning price.

 

[T Monahan]

We clean lots of rugs that cost the same or less than the cleaning price.

Is it possible for you to provide a percentage of tufted rugs you wash in comparison to hand knotted and woven?

The long established companies that have a Moore flat bed washer/wringer (a.k.a. Roll-A-Jet) know that it can be a fitting machine for making money on these sort of rugs. I have witnessed in-plant operations with a couple of guys on the wash floor doing power washing, running occasionally a scrubber, and thereafter feeding the rugs on the conveyor through the Moore process 200-300 rugs in a shift. Let's say they all average 50 sq. ft. Doing the math at a modest $1.50 for cleaning. 200 rugs translates into $15K. Charge more, and it get's better.

 

[Torrey Express]

Almost any rug, we will give them two options. Onsite or spa. Give both prices and explain the difference.
If its a specialty rug we won't even offer it onsite. And if its got urine we tell them there's little chance of getting odor out without taking it back to the shop.

Like you said, some freak out when you say "350.00 bucks to clean" but actually about half will just say "ok, when can you pick it up?"

At 1.00 sqft onsite, I'd say its about the same profit made on time spent vs 3.00 sqft offsite. I'm fine doing either one if the situation allows it.
I offered a onsite cleaning of one rug free with a deal I had on Angies list. Some up sold to offsite. Others liked the value and it didnt really increase the job cost by much at all.

 

[The Great Oz]

Is it possible for you to provide a percentage of tufted rugs you wash in comparison to hand knotted and woven?

Possible but not easy with our current computer system. I'll guess at 15% hand-tufted, 20% machine woven, 50% hand-knotted and the rest a combination of other stuff.

We charge less for a machine-woven rug than a "commodity" hand-tufted, and less for a hand-tufted than a hand-knotted. Typically both the time and risk involved rises with the value of the rug, with the exception of hand-made rugs sold at places like IKEA or Pier One. Those can be very risky to clean so we're OK with charging more than replacement value to clean them.

 

[T Monahan]

Possible but not easy with our current computer system. I'll guess at 15% hand-tufted, 20% machine woven, 50% hand-knotted and the rest a combination of other stuff.

We charge less for a machine-woven rug than a "commodity" hand-tufted, and less for a hand-tufted than a hand-knotted. Typically both the time and risk involved rises with the value of the rug, with the exception of hand-made rugs sold at places like IKEA or Pier One. Those can be very risky to clean so we're OK with charging more than replacement value to clean them.

Well said!

 

[Mikey P]

And why are they riskier to clean oh Great One?

 

[The Great Oz]

The hand-made rugs are usually very cheaply made so they can be sold cheaply, and they're prone to heavy dye bleeding, poor end finishes and other construction issues. Buying another isn't always an option as the rugs are bought in lots and when they're gone they're gone. Each store also has merchandise that doesn't show up in catalogues.

To their credit, IKEA will take back any rug that has a cleaning issue and offer a replacement. I spoke with the manager of the Seattle location about problems with the Afghani made rugs and he had an employee pull the entire display off of the floor while I was there.

 

[J Scott W]

I have talked with a few cleaners who have 3 options. They can clean on-location which is HWE for most rugs at the customers home. There is still some additional liability and issues about where to clean (not on a hardwood floor, not if the carpet beneath has also been fleshly cleaned, etc.) So it is worth more than regular cleaning price. They get around $1 per sq. ft.

They have a "Basic" in-plant cleaning that does not include separate cleaning of the fringes. This may be HWE or it may be a low moisture method for rugs very sensitive to moisture such as ones with some edge binding or custom border. This is in the $1.50 to $1.75 range.

Then they have the full treatment for full price and upsell services like removing urine contamination, deodorizing and so forth.

Around SLC, I see 40 or 50 Home Depot, Pottery Barn rugs for every 'work of art' type rug. But in some cities, I see the truly valuable rugs everywhere.