Linen Hire OR Linen Ownership? Get The Facts
Commercial Laundries have been washing and distributing TK linen for many years and then hiring it out. On the linen hire model, the laundry calculates its costs on approximately 150 washes representing the life of the linen item before replacement. However, we know the linen item can be washed closer to 250/270 washes before replacement and therefore the laundry saves on the extra 100 + washes which they charge you for!
Also, linen hire invariably means white linen, white linen or white linen! No other shade or colour is offered as the laundries claim that they can only operate on white linen as pool stock so that is can be used by all their customers.
But, what if you don’t want white?
Many customers want to own their own linen because it massively cheaper to do so and it allows for colour or branding choices. If you own your own linen the laundry will still be able to wash it, press it, collect it, store it and distribute it in the same way as linen hire. The only difference is the laundry makes a smaller profit and the end user makes a bigger saving.
The customer should always ask for a quotation on processing their own linen to compare value and prices.
The illustration below explains how linen ownership will save thousands, indeed tens of thousands of pounds
1. EXAMPLE OF DUVET COVER COSTING £8.29
2. AMORTISED PRICE OVER 150 WASHES THE COST IS 5.5 PENCE /ITEM (£8.29/150)
3. AMORTISED PRICE OVER 270 WASHES THE COST IS 3 PENCE /ITEM (£8.29/270)
4. CUSTOMER SAVES 2.5 PENCES PER ITEM PER WASH
5. THE PREMIUM CHARGED TO THE CUSTOMER UNDER LINEN HIRE IS A MASSIVE 43%
Example of residential accommodation with 400 beds buying on a par 5 basis (one on the bed, one in the linen cupboard, one dirty/damaged, one in transit and one at the laundry).
|Example||Pillowcases||Duvet Covers||Flat Sheets|
|Purchasing (e.g. 5 par)||2,000||2,000||2,000|
|Wash frequency 3x per week||6,000||6,000||6,000|
|x 52 weeks||312,000||312,000||312,000|
|Savings per item 2.5p, per year (2.5P X 312,000)||£7,800||£7,800||£7,800|
In addition to the savings above, as the laundry is not buying the linen to hire to you but is only offering the service of a commercial laundry to wash, process, deliver and collect, the price for this is approximately 20% cheaper than linen hire. Translated, this increases the above savings in the illustration by a further 20% giving a new savings figure of £28,080
- BY OWNING YOUR LINEN AND NOT LINEN HIRING YOU CAN SAVE UP TO 43% PA
- LINEN WHICH IS OWNED IS SHOWN AS A TAX EFFICIENT ASSET ON THE BALANCE SHEET AND CAN BE WRITTEN DOWN IN THE BOOKS
- LAUNDRIES PROCESSING LINEN YOU OWN WILL ALWAYS BE MUCH CHEAPER AND BETTER VALUE THAN LINEN HIRE