What Profit Margin Does a Laundromat Have?
A laundromat earns a gross margin near 94% because cost of goods is only vended soap and detergent at about 6% of revenue. But gross margin is misleading in this business: utilities, water, sewer, gas and electricity, claim 15% to 20% of revenue on top of COGS, and after rent, staff, and the equipment loan, net profit typically runs 15% to 28% at mature utilization.
Laundromat economics look strange on paper. Gross margin is among the highest of any physical business because the only true cost of goods is soap and detergent at 6% of revenue. But that number is misleading because the cost that replaces COGS in a laundromat is utilities. Revenue Map's presets model $3,300 to $3,600 per month in water, sewer, gas and electricity, which runs 15% to 20% of revenue depending on utilization. No other retail format carries a utility line that large.
After utilities, the remaining fixed costs are small: one attendant at $2,400 per month for a self-service store, $4,000 rent, and about $3,420 in monthly debt service on the equipment loan. The result is a business whose margin swings dramatically with utilization. At 48% utilization in Revenue Map's phase one, the store barely breaks even. At 70% utilization at maturity, net margin approaches 28%. The machines and the lease cost the same either way. Only the cycle count changes.
Revenue Breakdown
Laundromat margin breakdown by cost layer
| Item | Typical range | Notes | Source |
|---|---|---|---|
| Cost of goods (soap and detergent) | 6% of revenue | Vended soap and retail detergent only; gross margin near 94% | Revenue Map model presets |
| Utilities (water, gas, electric) | 15% to 20% of revenue | Presets model $3,300 per month at phase one rising to $3,600 at maturity | Revenue Map model presets |
| Contribution after COGS and utilities | 74% to 78% of revenue | The effective margin once the two variable-like costs are removed | Revenue Map model presets |
| Monthly fixed costs (self-service) | About $8,480 | One attendant at $2,880 with payroll tax, $4,000 rent, $350 insurance, $350 admin, $600 marketing, $300 misc | Revenue Map model presets |
| Monthly debt service | About $3,420 | Principal and interest on $270,000 at 9% over 120 months | Revenue Map model presets |
| Net profit margin (settled store) | 15% to 28% | Phase one at 48% utilization near break-even; phase three at 70% utilization near 28% | Revenue Map model presets |
Sources: Revenue Map model presets (default investment, pricing and funnel assumptions in our industry templates), Revenue Map model templates (vertical research in each financial model), Revenue Map benchmark tables (the thresholds behind our free calculators), and honest industry ranges where our own data is thin. Ranges are planning bands, not guarantees.
What Moves the Number
Utilization is the only lever that matters
Every cost except COGS and utilities is fixed. The machines, the lease, the attendant, the loan, they cost the same whether the store runs at 48% or 70% utilization. Revenue Map's presets move utilization from 48% in phase one (2,880 cycles per month) to 70% at maturity (4,200 cycles), and that swing is the entire difference between a 2% and a 28% net margin.
Utilities behave like a second COGS line
In most retail businesses, utilities are a rounding error. In a laundromat, water, sewer, gas for dryers, and electricity for 40 machines run $3,300 to $3,600 per month. That is 15% to 20% of revenue, far above any other format. Newer, high-efficiency machines can compress this line by several points, which flows directly to the bottom line.
Format shifts the cost shape, not just the ticket
A wash-and-fold format presets at 2.5 staff versus 1.0 for self-service, and its COGS rises to 9% because of labor touching the laundry. But the average ticket jumps from $5.75 to $8.50, so each cycle produces more gross-profit dollars. The pickup-and-delivery model pushes this further with an $11.00 ticket and 3.5 staff. Each format trades margin percentage for margin dollars.
The loan payment sets the floor
Monthly debt service of roughly $3,420 on the default $270,000 loan is the largest single fixed cost. Until revenue covers that payment plus the operating base, the business loses money. At the preset $5.75 ticket with 94% gross margin, each machine cycle contributes about $5.40, so the store needs roughly 630 cycles per month just to cover the loan, before any other cost.
Frequently Asked Questions
What is a good profit margin for a laundromat?
Why is laundromat gross margin so high if the business is not that profitable early on?
How do utility costs affect laundromat margins?
Does a wash-and-fold laundromat have better margins?
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