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National Clothesline
Laundered shirts vs. drycleaned pants:
Why the big price difference?
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By Bill Bohannon
In the summer of 2011 Checkbook Magazine ranked 1,929 drycleaners in seven major markets across the United States.
As part of that process they surveyed pricing for all 1,929 ranked drycleaners and published a summary of those findings which are available online at www.checkbook.org/.
Survey Data from Checkbook Magazine Market	Cleaners 	Average 	A
This survey provides the most comprehensive pricing survey published for the drycleaning industry in generations.
Reviewing the data from that survey shows that the average price charged for a pair of drycleaned pants was $5.66 and the average price for a laundered shirt was $1.91.
Based on these survey results the average cleaner receives $3.75 less in revenue per laundered shirt compared to a pair of drycleaned pants and the average price charged for a laundered shirt was 66 percent less than a pair of drycleaned pants.
How does this pricing disparity relate to what it actually costs to produce a pair of drycleaned pants and a laundered shirt? Do the prices we charge reflect the difference in what it cost us to produce these items?
To explore that further, let’s work through the process and compare the cost to produce an order of three pairs of drycleaned pants versus three laundered shirts.
Comparing costs for three laundered shirts
versus three pairs of drycleaned pants
Customer Service
Breaking down the costs of shirts vs. drycleaned pants Category
Ticket writing: We start the comparison at the front counter with incoming ticket writing. Writing a ticket for an order of three pants takes the same amount of time as writing a ticket for three laundered shirts.
Advantage: none.
Tagging: Tagging and checking pockets for both orders will take essentially the same amount of time, however most shirts have 13 buttons which all have to be checked and many will need to be unbuttoned.
In some cases 12 of the 13 are buttoned and the shirt is turned inside out or the sleeves are rolled up and must be unrolled.
Balanced across hundreds of shirts, this will likely take an average of about 20 seconds extra per shirt. For this reason we will allow one minute extra of paid labor for the order of three shirts to unbutton buttons. At an average of $11 per hour this will cost an extra 18 cents for the three shirts.
Advantage: three pants, 18 cents less.
Pick-up: At pick-up, there is no difference between serving a customer with an order of three shirts or three pair of drycleaned pants.
Advantage: none.
Net advantage customer service: three pants, 18 cents less.
Production for three pants
In production, a cleaner/spotter should be more than comfortable producing 90 quality pieces per hour. With a 45-lb. load in a 55-lb. machine, it typically only takes about 20 minutes to inspect, sort, hang and spot a completed load.
Allow another few minutes to prepare the next load and you can easily process 45 pieces in less than 30 minutes. This allows a cleaner/spotter operating a single machine about 30 minutes per hour to assume other duties in the plant.
With this in mind, use a standard of 90 pieces per hour for cleaning and spotting.
For pants finishing, we will use a standard of 40 pants per hour and 90 pieces per hour for inspection/assembly/bagging.  
Using these standards, 90 pieces per hour for cleaning and spotting, 40 pieces per hour for finishing pants and 90 pieces per hour for inspection, assembly and bagging, the labor cost to produce three pairs of drycleaned pants will cost $2.01, or 66 cents per pair with drycleaning production employees averaging $12 per hour.
Production for three shirts
In shirt production, let’s use a standard of 50 shirts per hour with one finisher and one support person averaging $11 per hour. Using this standard it will cost us $1.32 or 44 cents per shirt for shirt production.
Production labor for the three pairs of drycleaned pants cost $2.01 and production labor for the three shirts cost $1.32. This created a net advantage for the laundered shirt of 69 cents for the order of three shirts.
Production advantage: three shirts, 69 cents less.
On the customer service side, the order of three pants cost us 18 cents less to produce while in production the three laundered shirts cost us 69 cents less for a net advantage for the three laundered shirts of 51 cents in labor costs.
Total labor cost advantage: three shirts, 51 cents.
Other costs
Supplies: For supplies, costs will essentially be the same with two exceptions. Strut hangers for the three pants will cost 12 cents more than three shirt hangers. Solvent for the drycleaned pants will cost another 12 cents. This is based on solvent at $40 per gallon and consumption of 1,000 pieces processed per gallon consumed.
Advantage: three shirts, 24 cents.
Utilities: Utility cost will essentially be the same except for water consumption. Shirt laundering will typically consume between three and four gallons of water per shirt. With water and sewer fees combined approaching or exceeding $10 per 1,000 gallons, an order of three shirts will consume 10 cents in additional utilities for water consumption.
Advantage: three pants, 10 cents.
Equipment/depreciation: New shirt units cost nearly as much if not more than a drycleaning machine. Throw in a touch up press and washing machine and you will spend just about as much money in equipment to process laundered shirts as you will for setting up a drycleaning department.
Advantage: none.
Waste disposal: Most cleaners will incur waste disposal costs associated with waste generated during drycleaning. We allowed 10 cents for waste disposal for the three drycleaned pairs of pants.
Advantage: three shirts, 10 cents.
Total advantage Other Costs, three shirts 23 cents.
Processing three shirts cost us 51 cents less in total labor than three pair of drycleaned pants and saved us another 24 cents in other costs for a net savings of 75 cents over the cost of processing three pairs of drycleaned pants. That’s a net saving of 25 cents per piece.
Simply stated, the total cost difference between producing a laundered shirt and a pair of drycleaned pants is about 25 cents.
The average cleaner charges $5.66 for a pair of drycleaned pants and $1.91 for a laundered shirt. The difference in cost to produce these two items should be about a quarter. The average cleaner is charging $3.75 less for an item that cost them about 25 cents less to produce.
This should give some insight as to why far too many cleaners are struggling to survive. The reality is that most cleaners are selling laundered shirts at prices far below what it cost to produce them. If the average cleaners were breaking even on shirts at $1.91 they would likely be generating net profits approaching or exceeding 45 percent. The cold, hard reality is that most cleaners are fortunate to net 15 percent.
There appears to be a common thread running through all seven surveys that says a laundered shirt should be priced at one-third the price of a pair of drycleaned slacks. I would love to know whose idea it was and the logic behind it. There is none.
Some have suggested that lower shirt prices generate more drycleaning. That is another foolish myth. In realty, as a group, heavy shirt users generate less than one piece of drycleaning per two laundered shirts generated. Many will produce in excess four or five laundered shirts per piece of drycleaning and some will produce next to nothing.
In one documented case a customer generated 755 laundered shirts and seven pieces of drycleaning over three years. In this case the customer generated 108 laundered shirts for each piece of drycleaning.
Some industry leaders have expressed concern that margins in the industry are slipping and suggested that price increases are necessary to offset increased costs.
Here’s our problem
The average drycleaner is getting $5.66 for a drycleaned pair of slacks. Producing a laundered shirt costs about five percent less than producing a pair of pants and the average cleaner is selling that laundered shirt for 66 percent less.
I would suggest that perhaps, just perhaps, this is a huge part of the problem.  Even at full price, most cleaners have priced laundered shirts at a price that represents a 50 percent discount all day, every day. Is there any wonder why so many are struggling?
The reality is that for roughly the last 30 years shirt prices have been suppressed under the false assumption that shirts were far less costly to produce and that those shirt customers would generate large quantities of drycleaning. It’s simply not true.
Unless and until more and more cleaners start moving toward a price structure that better reflects their cost to produce, little will change. Bumping shirts up 20 cents and drycleaning by 50 cents won’t begin to close the price disparity.
I’m sure there will be cleaners out there who nitpick some perceived flaw in the message I am trying to convey here. Some will say wages of $11 to $12 per hour is too low; others will suggest it is too high. Others will say my production targets are too high while others will argue they are too low.
Despite that, the bottom line remains the same. The cost difference between producing a drycleaned pair of pants and a laundered shirt isn’t very much and certainly isn’t reflected in most cleaners’ pricing.
There are cleaners out there today that are prospering. They have moved toward a price structure that better reflects their cost to produce and they are reaping the rewards. Instead of raising shirt prices by 20 cents and drycleaning by 50 cents, they have raised prices on both equally. In addition, some have slipped in an extra 10 cents on shirts only every three to four months to help close the price gap further.
For these cleaners, moving from a price structure in a deliberate and measured way has restored and enhanced profitability.  

Bill Bohannon is the owner of Hollin Hall Cleaners in Alexandria, VA. He has been in the drycleaning industry for 39 years. He can be reached by email at bill.bohannon@comcast.net or by phone at (703) 765 5518.
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