Anyone who has ever contacted a uniform or linen company in search of pricing knows how confusing it can be. Pricing out linens and uniforms is not as easy as looking at prices on a restaurant menu. Things are not that clear cut. It doesn’t hurt that there are multiple billing methods to consider.
A customer might contact Salt Lake City-based Alsco and get an estimate based on unit price plus additional fees. A competitor contacted with the exact same needs might provide pricing based on annual cost. There are different billing methods that result in different overall costs. It is up to the customer to understand how their provider bills.
Unit Price Billing
Alsco says that unit price billing is the most common form of billing in the industry. It is pretty straightforward. The customer is billed a certain amount per piece rented over the term – usually one week for uniforms. Additional fees are added as needed.
In terms of invoicing, the unit price model typically generates an invoice for every delivery. Each invoice would have its own terms. It is up for the customer to pay the invoices as they come due. As for additional fees, these can add up. More on that in a minute.
Annual Cost Billing
The annual cost billing method is generally based on a total cost of uniform and linen rental over the course of a year. This billing method might be preferred among customers that do not have a considerable turnover rate. Why? Because all of the ancillary costs are built into the package. A customer might pay what appears to be more up front. However, the total cost may be less because the customer is not surprised by ancillary fees down the road.
A good way to illustrate the difference is to consider having new carpet installed in your home. Under the unit price model, you might pay just $2,000 for the carpet. But then you also pay extra to have your old carpet ripped up and removed, disposal of the old carpet, and labor for moving furniture around. When all is said and done, your bill is $3,000.
The other model would charge you $2,700 for the same carpet. But included in that price are all of the other ancillary fees. You do not get charged extra for removal and disposal, moving furniture, etc.
Typical Ancillary Fees
So what are these ancillary fees that drive up the price on the per-unit model? They are numerous and varying. Here are just a few examples:
- Customization Fees – Customers might pay to have uniforms customized with embroidery, company logos, and so forth. Likewise, branding floor mats is likely to incur a customization charge.
- Loss & Damage – Uniform and linen providers typically charge customers for loss and damage above what is considered normal wear and tear. Fees for loss and damage can vary.
- Adding/Dropping Employees – Some providers charge a fee every time an employee is added or dropped from the program. This is to cover the costs of adjusting inventory.
- Service Fees – Charging customers service fees to cover the costs of doing business is fairly normal. Energy and wastewater fees are two examples. Fuel surcharges are also pretty common these days.
Ancillary fees are charged one way or the other. The question for customers is this: which billing method better accounts for such charges to keep costs in check? That is something customers have to deal with on a case-by-case basis. This is why it is so important to shop around for linen and uniform rental services before signing a contract.