Textiles: Lenore Law, Alliance Textile Solutions, Corona, Calif.
When a customer has seasonal usage of linen, they must ensure they have enough linen for their high season, as well as any non-seasonal business and new business, both seasonal and non-seasonal.
Adding new markets that utilize similar linen items during the other customers’ “offseason” is a perfect strategy so that a laundry can amortize their purchases on a bi-yearly or yearly basis, predicted on all their usage, not just that of their seasonal customers.
From a financial standpoint, make your purchases during the low season to arrive during the high season and get net-60-day terms from the day first shipped from your vendors. If the customer needs more time to pay due to seasonal usage, then offer a merchant account for another 30 days. This gives the customer 90 days to pay, and they will have plenty of money after 90 days of service to their customers, especially if their customers are cash-and-carry businesses (e.g., restaurants) that are seasonal.
If their customer is a cash-and-carry kind of business, then make sure all bills are collected weekly on a COD basis to keep cash flowing during peak season, as well as customers who are on a cash basis or a credit basis.
Make sure all payables are on time. Make sure your route sales and delivery people are accountable for collecting or putting a customer on hold if behind at all. Do not deliver if they are way behind on credit terms, even if they need goods for surgery the next day. You are not a bank. Suggest they get a credit line, or they can utilize yours at a cost. And let them know you will gladly offer them credit at a cost.
Also, make sure your billing and cost accounting is up to date and accurate at all times. Put your terms in your contracts with customers (i.e., net how many days and consequences when not on time). Everything needs a consequence for inappropriate behavior. Look at our country’s president. He offers huge consequences to other countries if they are not our allies and do not cooperate on his terms. I’m amazed at how much he has got done in such a little time. He leads with a negative and negotiates to become a positive outcome. A reverse psychology strategy that works.
If a laundry has more seasonal customers, like ski slope towns, then good financial budgeting is best and allows for money to pay bills during the slower seasons. As my parents taught me (they were Depression-era people), always put money in the bank for a rainy day or when you need it.
Vendors cannot always carry you through the slow season. Again, multiple markets are best — diversify. Having multiple businesses works as well. Get creative, but always save for the slower season. Two of my vendors have multiple companies, and that, in turn, helps me negotiate better payment terms. I have done business with both companies for over 20 years, so we have an established trust, and they know I will pay even when my customers lag a bit behind.
As a vendor, doing business with multiple markets works best. We personally service four markets, one that is very seasonal and another that is partially seasonal. If your customers are seasonal, make sure all your customers pay on time and as agreed. Do not ship more goods if the last order is not paid in full. Strict credit terms, strict accounting and a padded bank account work best.
As for my company personally, I think customer service is best, and AI (artificial intelligence) does not provide good customer service. Many of my customers agree with me, but many large customers are going all AI with no interpersonal communication. Imagine our president arbitrating with other countries on an AI basis. It will not work.
I grew up when a handshake meant everything to a good business deal going forward. I still insist on this and believe through all of the AI and robotics going forward that good communication will be more important than ever.
Relationships with your customers are important as well. It’s much easier to negotiate or get a positive outcome on a collection issue if you have a long-term relationship of good service and a happy customer.
In a market of digital and AI, relationships matter even more.
Commercial Laundry: Edward Arzouian, Bates Troy Inc., Binghamton, N.Y.
The question this month can be approached from two different points of view.
In our healthcare linen sector, on the one hand, there is the “seasonal demand” forecast for linen that will be requested or expected from our healthcare clients. In reality, there is not that much fluctuation seasonally in linen demand from healthcare facilities. There are some short-term fluctuations and fulfillment issues on the very short-term basis around holidays. There is often expected or anticipated growth or increased demand over time, and that needs to be considered.
On the other hand, there are “seasonal demands” required by laundries made by us to our linen suppliers.
The obvious answer to both these questions is that after a few years in business, if you are tracking and recording your data properly, you should be able to anticipate your requirements, including factoring in expected growth. After 80 years in the business, Bates Troy Inc. has a wealth of data and experience upon which to base these decisions.
One thing that can be a challenge on linen demand is having to do a complete install on a new, large healthcare facility client. However, in most cases, you have at least a couple of months to plan that.
We have discussed linen management software before and its importance, in fact, its necessity. Looking ahead, we should expect to see artificial intelligence (AI) incorporated into this software. AI should facilitate and add precision to linen purchasing, but we are not there yet.
To get a better handle on this question, since our linen purchases are not in my regular job purview, I turned to General Manager Joe Liparulo. He has over 40 years’ experience in the laundry business. He has seen it all and weathered all the changes our industry has had in that period. He had a somewhat different take on purchasing.
“I think both suppliers and laundries have to move past any seasonal fluctuations,” suggests Liparulo. “We buy out a year and a half in advance to commit to the supplier that we are going to purchase what we ordered. We do this to gain lower pricing on a longer-term commitment.
“On the supplier end, they need to be always thinking about any potential surprises, such as cotton shortages that have occurred in the past and that recent nasty word, ‘tariffs,’ which nobody in the USA should be surprised about.”
He adds, “Tariffs change the pricing guarantees on the year-and-a-half commitment from not only the supplier but the laundries as well. There are many suppliers who have more pre-tariff inventory in their warehouses that we are taking advantage of. Those items are not on the tariff cost list.”
Liparulo concludes, “The bottom line is seasonal fluctuations have far less importance than managing your purchasing on a more long-term basis.”
Good advice to go on.
Check back tomorrow for insights from linen supply, uniform/workwear manufacturing and chemicals supply experts.
Have a question or comment? E-mail our editor Matt Poe at [email protected].
