Whether you are a rental laundry in the industrial segment, food & beverage, hospitality or healthcare, you service customers who all have restrooms. Almost all of these public/business restrooms are equipped with disposable paper products – including hand towels, toilet tissue, and seat covers. Recent industry discussions indicate that laundries who offer this product line (ancillary to their rental programs), experience 20% additional revenues beyond their traditional account model. Additionally, this product line is typically sold at 30% to 50% gross margin, making it one of the most profitable items in their book of business.
Let’s face it. People use the bathroom, and (rental) customers WILL supply their restrooms with product. Yes, in some cases, they buy it from Costco or Amazon. And in large volume cases, they might even buy product from a paper mill. Some buy product from distributors. But rental laundries/textile suppliers have two unique differentiators to their competitors… delivery and service. The convenience and guaranteed supply of a program has become more and more attractive and comfortable for B2B to buy into a “program”. As they should already know and trust their route person, this product line is just a simple – yet very important – add on to their regular service.
Some rental laundries elect to “rent” a weekly service and supply the needed goods on a flat rate. Other companies choose to sell the “one-way” product, with programmed regular replenishments weekly. Both methods work well and are profitable. Economic trends indicate that this segment of business is growing more rapidly than traditional rental. Double-digit growth is heard over and over, from active market participants.
Another key benefit of disposable paper products for laundries is that of “leverage” in their sales strategy. How many times does a laundry call on a prospect, to discover that they are under contract? IF that particular prospect is served by a laundry who does not participate in paper, bingo… it’s a way into the account without violating a contract. If the new supplier starts with only paper, there are truly in the right place at the right time during the renewal process.
B2B customers want “full-service programs”. Rented core textiles, purchased wearable apparel, disposable paper products – all BUNDLED together make up full service programs. Customers really do want it all. All the products they can get, from single source suppliers, coupled with the service needed to maintain more complex programs. The convenience is part of what they pay for.
Industry standard disposable paper products and dispensers can be sourced through a small network of manufacturers and distributors, and many of the core products used in the market are very similar and interchangeable. Again, the differentiators are delivery and service.
It is commonly agreed that organic growth within present accounts is the most profitable and quickest way to grow our business. This is a perfect example of market opportunity for organic growth. Our industry already serves businesses who need and use these products every day. Make your paper work!
is Director of Market Solutions
at ADI American Dawn,
Los Angeles, CA.