$3 washes

[sflikkema]

Lee Iococca said " Lead, follow, or get out of the way. I have a 140 ft wash with prices $5 express $7 Reg $8 Deluxe $10 Finest. My $5 express wash was put into efect 6 months ago after a Goo-Goo came to town. Now we have the $3 wash new to town after a local sold out. My question is the same as Lee's. $2 and lead, follow, or ?
Im not going to respond to your answers but would like to here your opinions
Maybe the guy who wants a goo goo wash wants mine?

 

[smokun]

FLEX Will Make Goo-Goo... Go Ga-Ga!

The sky isn't falling!!!

The answer is simple. Offer customers what they want... when they want it!

The most effective way to protect against an express exterior is to upgrade to Flex-Serve... and provide the choice of quick express wash & go
OR a myriad of hands-on services that Goo Goo doesn't provide.

Price isn't necessarily the issue, so why allow the tail to wag the dog? Value and Convenience will be your saving grace. Become a one-stop solution... and invite Goo-Goo to go Poo Poo!


Happy Holidays!

-STEVE

 

[robert roman]

First of all, Lee sold cars and Chrysler is now on the brink of bankruptcy.

Second, times are a changing. Consider your immediate situation and near future; close proximity to a "low-priced" wash; identical services; no one wins in a price war; franchisee has to pay royalties; and a recession followed by a slow recovery starting in late 2009 (?).

As Okun implies, step up and differentiate your business. Flex-serve is a practical way to increase the relative attractiveness of your site and expand your customer base. This would put your competitor at a dissadvantage.

Otherwise, you may face the prospect of competing on the basis of low price. This can lead businesses into a downward spiral that is difficult to pull out of.

Hope this helps.

Bob Roman
RJR Enterprises

 

[Washmee]

http://www.youtube.com/watch?v=bays1tdQoZY

 

[buda]

$3.00 Wash

What I learned in operating our 100' conveyorized exterior car wash was that a 3 package price offering was the best.

We offered:

Basic Wash & Dry $ 5.00

Wash & POLISH 'n WAX 8.00

The WORKS 12.00

This resulted in a per car revenue of over $7.00 per car.

Washing cars at $3.00 does not cover your costs, if your costs are similiar to ours.

From what I have seen around the country most operators who took on the $3.00 wash have upped their price, unless they are washing in excess of 15,000 cars per month.

EXPRESS DETAILING

This will put you on a different playing field. That said I would offer a simple EXPRESS DETAILING Program offering either 4 or 5 services depending on the space you have to perform the services. You need a minimum of 2 bays and better, 4 bays. But that too is dependent on how many cars you have been washing, on average, per month.

Your express offering could be:

Wash & Wax
Wash & Carpet Shampoo
Wash & Seat Shampoo
Wash & Super Interior Clean

All are at $39.95 with basic exterior wash. A $10 discount for 2 services purchased; $20 for three services and $30 for all your services.

If you think there is a market for simply interior cleaning offer a 5th choice called, Wash & Interior Clean for $19.95 and it is included as one of the purchases qualifying for a $10, $20 or $20 discount.

Selling 5% of your customers with a carwash volume of6,000 cars per month that's 300 cars say $40 per car, an additional $12,000 per month. Cost per car complete with is no more than $10, so that is $3,000 a $9,000 net profit.

Just a few well intentioned thoughts on the subject.

Regards
Bud Abraham

 

[Earl Weiss]

You ask a simple question that does not have a simple answer. Instead it leads to more questions needing answers.

1. Do you draw from the same traffic patterns as the $3.00 competition.

2. Can you put yourself in the customer's shoes and see if there is a perception for greater value for your wash. ? (Maybe you can enlist the aid of some friends, relatives , relatives of friends etc, for feedback on this issue.)

3. If there is no difference in perceived value, can you create one?

4. If there is no difference in percieved value and you don't think you can create one, ask any gasoline retailer what happens to their volume if they are 2% higher than the guy down the street, then see if this is what you want to happen at your location.

5. Can you project the new guys cost of doing business versus yours. Newer operators will tend to have higher debt service than established operators. Can you meet his price point long enough to make him crumble?

6. Can you use the price point as the draw and then try to capitalize on the traffic by sellin upgrades and volume packages?

 

[Chiefs]

What does Goo Goo give for $3.00 vs. what you give for $5.00? Are we comparing apples to apples or apples to oranges? For example, if you offer towel drying and Goo Goo does not, then your quality is necessarily better. How close is Goo Goo to your wash? If its on the other side of town, more than 3-5 miles away, then its impact will be less. Also, unless Goo Goo is washing 10-15,000 cars a month, they will find out quickly that the format is lacking. For now I would worry more about what I was doing rather than what they are doing and see where things fall out and reappraise in a few months.

Rememeber, no matter who wins a ****ing contest, you both will end up stinking.

 

[rph9168]

It may not be the best analogy but McDonald's, Wendy's, Burger King and numerous other regional chains do very well yet they all sell essentially the same thing - burgers. People tend to patronize the one they prefer. Some like tomato and lettuce. Some like the fries. Some like the taste of the burger. For a variety of reasons they choose one over the other. As several have mentioned I think you need to differentiate yourself from the competition not go head to head.

From my observations I believe today's customers want convenience, good service and speed as much as quality. If you have the room, flex serve is a viable option. Maybe your location has better access and can handle volume better. Maybe you can provide a useful freebie like an interior wipe. Does your wash get involved with community activities? Have you done charity events? Do you do any off-site sales efforts? Is there anything particularly unique about your operation you might be able to promote? Is there something about your wash that makes it better than the others?

Almost all of the $3 washes in our area have changed hands and many have raised their price to $3.99 or even $5. As someone has already mentioned, unless they are doing very high volume they won't last long. Hang in there and keep the faith.

 

[MEP001]

If you want to extend the burger franchise a bit further, a lot of their success is due to advertising. Once you get them in for the first time, though, you want them to have an experience that allows them no reason to want to try the other guy.

 

[Kenneth]

Lee Iococca said " Lead, follow, or get out of the way.

Lee was also a man that took a large government loan to bailout his company some twenty plus years ago.

As others have mentioned, I would not change my pricing unless I was charging more for the same service. What is your competitive advantage? Why would a customer spend more at your location? How will the customer know your service is better from the street. Before I would make any large scale changes I would try some promotions first and see what the results yield. Maybe some three dollar Wednesdays or something similar. My guess is that you will NOT see a dramatic increase.
I would look at your operation and see if there is any room for improvement. Look at the appearance of the location, curb appeal, employee appearance. If you need to change anything do so now if it is feasible.
I would not wait for Goo Goo's to go broke. We wash plenty of cars with a $3 format and for every person that says you can't make money washing cars at three dollars there is another one proving that you can.

 

[Waxman]

FWIW,

I talked with an efficiency expert Wednesday who works for Tyco. He had great ideas about looking at your p&l to find inefficiencies and then correcting them.

One interesting idea; team up with others to buy soaps in bulk to receive a discount. Your local competitors may not go for it, but others may!

 

[Kenneth]

I like the way this guy thinks.

 

[pitzerwm]

I did this years ago and cut our soap cost 50%

 

[Waxman]

How did you find the person to buy with?

 

[pitzerwm]

I just went to each operator and talked with them showing them the savings and offered to help them set the new stuff up. Some advice, figure out what each guy is going to order, then collect all of the money up front. Order it and have everyone there when it arrives off load it from the semi onto their traitors etc. a lot less headaches. I didn't "take a cut" for my work, but there was some extra work. But 50% savings (the freight mostly), we did negotiate a good price because they didn't have a distr. in the area.

 

[beauman]

In Detroit (home of the 'Original $2 Car Wash) we have been fighting the price war for over 15 years. We have a few $1 washes and some that wash for free on Friday and Saturday night after 8pm or if it rains to "keep them in the washing habit".

A chain with 27 $2 locations will force the next competitor to compete dollar for dollar. Thus if each location has a minimum of 3 competitors, you end up with 108 $2 washes. In many cases, I can often count 5 washes in one square mile. The only way to make money (pay the bills) is to have high traffic volume, visibility, signage and easy ingress/egress and more than one location. By the way, the wash volumes here have been dropping yearly due to poor weather patterns - last years gas prices didn't help nor does losing 30,000 auto workers to unemployment. We're down 30% from 4 years ago.

You will not compete with the $3 location because its about the price. If you want that customer, its about the price. Put the services out there and charge for them. I've been to the GooGoo in Grand Rapids and that guy was sold a bill of goods. He is in between two well run carwashes and on a street that has nearly a dozen more for motorists to choose from. The only thing he did was muck up a fairly saturated street - but at least the existing operators were getting a fair price for the wash.

We have seen the costs of operating washes start to impact the Original $2 chain and thus they have risen in price to $3 in many locations. But understand what they offer: Soap, underbody, single polish wax, drying agent. That is thier best wash. Take away underbody and polish wax, and you have the basic wash.

My 2 cents. Charge for the level of your service and target those customers.

 

[robert roman]

Well said, Beauman.

The situation in Detroit also suggests a lack of due diligence and stewardship. This occurred in the vending industry which is similar to the carwash industry (highly fragmented with most operators grossing less than $1 mil annually). By the end of the boom period in 2002, the number of complaints about undelivered vending equipment, over-priced equipment and inadequate or poor sales due to location went up significantly.

 

[stef]

Stef

I have a self serve in Warren, MI. All Car Washes here in MI. are all failing miserably because of these $2.00 car washes that have invaded us. They've destroyed our business. I am sick of hearing people say offer more, treat the customer better, give them what they need. The majority of us have done that. These people have invaded our industry with only one intent, which is to destroy our business's. They are an organized, legal maffia. These people are paying customers to wash their cars. I mean PAYING customers to wash their cars, and some of these *******s are giving free vacuums too. Again intending to destroy honest people! I know how much it costs to run a car wash. These people were billionaires who came in and had the money to put up a wealth of washes and sit back while screwing over honest people, and while laughing at this comedy show that no one can stop! I have spoken to friends of mine who are forced to abandon and walk away from there beautiful washes because they simply cannot keep taking money from their savings accounts anymore. These people have been fighting this maffia for years and can no longer do it. I have spoken to officials at the city of Warren and was informed that there are currently over 10 car washes in the city that can't pay their property taxes and bills. In a short time there will be abandoned washes everywhere. However the city doesn't want these washes because they aren't worth a **** pot, and it would only cost them money. In MI. you can?t give a car wash away, and don?t try to tell me different. Those ******* bastard?s who started this car wash Maffia should first be sued, then beaten in front of their own customers. Prices at any tunnel should be no less then $7.00 for a basic wash, and that?s across the whole nation!! What the hell is going on, Prices for a basic wash was $5.00 20 years ago!! I can only hope that some of those *******'s are on this board now, they need to know that they are criminals!!

 

[pitzerwm]

I believe that in the Sherman Anti-Trust Act there are provisions that says that a chain can not sell their product for less than it cost to deliver. So if these are chains, you could or the Attorney General could do something about it.

 

[Earl Weiss]

I believe that in the Sherman Anti-Trust Act there are provisions that says that a chain can not sell their product for less than it cost to deliver. So if these are chains, you could or the Attorney General could do something about it.

I believe this applies to products which is easier to monitor. If the product is bought at wholesale for $1.00, you cannot sell it for 99 cents.

With a service, it is harder to establish the cost due to economies of scale. I measure my production costs on an annual basis. These include all incremental costs such as Utilities (water, elec, natural gas), Cleaning Solutions, and maintenance. Obvioulsly it is not a perfect measure because some utilities are used even if I wash -0- cars (for my purposes, I do not back out a fixed cost, I just use the whole amount). I still need heat and light. Labor is a constant, so it is not a "production Cost".

All told, these variable costs may be less than my fixed costs including rent/mortgage, taxes, labor, insurance,scavenger, professional fees etc.

Point being, I think you would have a loser trying to establish the variable cost of Delivery of an EE wash at over $2.00.