Cost effective wash solutions

[wood]

Saw in the present P.C. mag the discussion of alternative wash products to help cut costs, and help offset other rising expenses.

I still believe in staying branded (ecolab) for my foam waxes, and rain x, but would like some feedback on what alternatives I should look into for the other tunnel applications.

Not only cost effective product advice, but shipping cost hurdles. I am in Illinois so if there is not a local stocking distributor or warehouse, I don't think a supplier from California would make sense.

Thanks,
Wood

 

[smokun]

A Wealth of Choices: Big, Small, Close-By, and Eager To Serve

Wood...

Ecolab is big, but that doesn't make them better; simply bigger. There are dozens of good regional chemical companies in your 3-state area. If you like national companies, a very high profile supplier is Turtle Wax. There are many others in the ajoining states, too.

Bigger companies have the marketing clout to create a national brand with products that are familiar mainly because they advertise to the broad national market. Nevertheless, you can find the same equal-to products locally; sometimes better.

First, determine what the products you currently use are costing you per/vehicle. If they are working, use them as your baseline. Then, invite other suppliers to show you their products in a similar system, so you ensure compatibility. Determine the cost per vehicle with all the test products, and judge if their performance meets your ideal for cleaning, fragrance, packaging, and field support. The test should cost you nothing because most companies will provide all the stuff for free... simply to get an opportunity to gain a new customer. Keep the cost of shipping or delivery in mind, too. You need to evaluate bottom-line cost to your door.

Many smaller companies will actually be able to tailor their poduct to your specific needs, especially when it comes to fragrance. They may work with you side-by-side to tweak their products to suit your needs.

So, don't be overwhelmed by the national brand advertising image. Smart operators have their own performance criteria, and shop, shop, shop until they find a more cost-effective alternative. It's actually a continuous evaluation process, and well worth the effort. If you focus on dollar-per-vehicle performance that meets or exceeds your "ideal", you may find the efficient answer right in your own area... and be able to cut your expenses by 50% or more while achieving a satisfiable product.

Everything is negotiable, so once you find what you want, make sure the company will become a supply partner who understands your needs... and the way you want to do business with your suppliers. Smaller companies may be more flexible.

Hope this helps.

-Steve

 

[chadrpalmer]

we have had great success with a local chemical company, at a fraction of the cost. since we do such a high volume of cars (our two washes are averaging about 27,000 cars a month total) we have helped his business tremendously, which has made him grateful enough to keep prices very competative...as well, when we need something changed, he changes it, try and get a huge national company to reformulate for you.

 

[Earl Weiss]

I am in the Chicago area and have switched to Kleen Rite for Pre Soak, Foam Soap, Triple foam, and sealer wax. Also SS wheel cleaner. Shipping is free with 36 pails and they have had spring specials where if you buy a certain # you get some free. You are welcome to contact me and visit my places to see if you like what you see.

For the items mentioned I now pay about half what I was paying the bigger names. It works as well if not better. I also offer name brands when I think there is a marketability bonus like Rain X. But for the other items IMNSHO there is no marketing advantage.

For some items like my drying agent, and Tunnel wheel cleaner I have stuck with ecolab or gone to other supppliers since I felt their product worked better.

 

[rph9168]

If you are a real "hands on " operator the "pick and choose" method might work well for you. Buying one or several products from several distributors or companies creates no real loyalty for the supplier who will not put as great a value to your business. This works fine if you understand application issues and can "tweak" products to meet your requirements.

If not, I think you would be better off picking one rep you have confidence in and make him work for your business. A good rep can keep your costs in line and will monitor cost and performance on a regular basis. If he has all your business he will do all he can to keep your business.

 

[smokun]

Hard To Disagree With Ron, BUT...

Wood...

It's hard to disagree with Ron's logic, BUT... focus on the last part of his comment.

"If he has all your business he will do all he can to keep your business."

In order for you to really "know" if you are achieving the best value, you must have legitimate comparisons. You will never be able to challenge for the best value unless you periodically scrutinize and test others who also seek your business. For many operators, it's hard to keep focus on cost-analysis if the salesman is allowed to take you off-the-mark. Good sales people know that most (if not all) buying is based on EMOTION, not logic. So, relationships are forged, favors are extended, and constant contact maintains a continuity that makes prudent buying difficult.

Accordingly, I urge you to place relentless focus on VALUE. If $$$ cost is the primary reason for the buying relationship, the sales person should understand your need to test & scrutinize everything from time to time. Value is not limited to cost, however, so balancing the bottom-line price with extras like support help, favors, credit extension, and on-site hands-on involvement also are part of the value equation. The lowest price means very little until you prudently evaluate what that "price" really buys. The fundamental objective is to cost-effectively achieve the best products for your operation. That is basic. After that, consider all of the collateral benefits of dealing with one company over another. It may not be the easiest way, but it's well worth it!

Make sense?


-Steve

 

[Earl Weiss]

Got to agree with Steve on this one. If you are not making cost effectiveness comaparisons then how do you know you are not getting reamed? At one show a gut in a booth stops me and says "I can cut your chem costs in half" This was interesting since he had no idea what my costs were. So, I spoke with him and explained I had a conveyor with plenty of soft touch equip and wanted to know what he projected my cost would be for Soap, pre soak, wheel cleaner, and drying agent, the items every car gets. He told me, "I'll cut your costs from 80 cents a car to 40 cents a car" . Since my costs were less than 20 cents a car, I ran like heck!

 

[wood]

Guys:

Thanks for the feedback. Earl and Steve's replies were educational. I will check out Kleen Rite and any other supplier suggestions. What Kleen-Rite products?

I know you won't believe it, but in the 4 years I have been open at this tunnel location, only 2-3 reps have stopped by, and I pay all my bills! This is my 3rd location over the last 10 years, so I am familiar with the drum price / cost per use price comparison, and so on. It just seems with all the other utilitiy pricing already formatted that this is an area were I can cut something.

I was thinking of getting into the wash solution sales business. My top two guys are very handy, I can sell, and understand the different market segments. I will let you know if I find a diamond in the rough. If you know of a supplier in the midwest who is looking for someone let me know.

Take Care,
Wood

 

[Earl Weiss]

I use their Purple Passion Pre soak, Cherry Blossom Pink foaming soap, thier three colors of Triple foam Polish wax, Peachy Peach Sealant.

Only issues was Soap and Pre soak foamed too much if I diluted 5 gallons with 10 gallons of water and then used a 511 Hydrominder with pink tip. Had to ad about 12 gallons of water per 5 gallon pail so cars would rinse clean. Have since changed to the Hydrominder ultra lean kit available thru Kleen rite. I also add other stuff to orders so it gets the free shipping as well.

 

[rph9168]

In no way would I say that once you settled on a single supplier that you "take yourself off the market". In fact I highly recommend that you "comparison shop" as long as you are aware of the pitfalls. I agree with Earl that before any sales rep can make claims of improved cost or performance they have to know what you are currently doing. In fact, I think would definitely steer clear of a rep that makes that claim without first looking at your operation.

As I said previously you can pick and choose or go with a single supplier. It's more a matter of preference and what you as an operator feel comfortable with. If you choose a single supplier you must make it clear what you consider the price point and perfomance you want and make them hit the mark. To a certain extent, cost is somewhat irrelevant unless that is your only consideration. The issue should be the best performance for the price you are paying. Sometime by using less of an expensive chemicals you can get far better results than using more on an inexpensive one. When you are buying from several suppliers you most likely are not getting their best price or the most from their service but you may be able to achieve the performance level you want if you know what you are doing and can "cherry pick" their product line.

From my experience, a good chemical rep can make almost any product work. The issue is how much (or little) is used to achieve desired results. Without intending to put words into Steve's mouth I think he was saying that if you choose either route be sure to get the most value from your choice. A single source supplier should provide good service and support on a regular basis along with their products. With mutiple suppliers you may not get the service and support but you should get the performance results you want at prices that you can live with.

 

[robert roman]

Although it makes a lot of sense to do your best to minimize operating expenses, what do you do when you have finally squeezed the last few excess cents out of per unit variable cost?

Quite frankly, at most washes, the benefit from a mere 5% increase increase in sales volumes will dwarf the benefit from saving, say, $0.10 per car in chemical. So where do you want to spend your valuable time and effort on; saving pennys per car or figuring out how to pick up another quarter in revenue per car?

 

[Ben's Car Wash]

Although it makes a lot of sense to do your best to minimize operating expenses, what do you do when you have finally squeezed the last few excess cents out of per unit variable cost?

Quite frankly, at most washes, the benefit from a mere 5% increase increase in sales volumes will dwarf the benefit from saving, say, $0.10 per car in chemical. So where do you want to spend your valuable time and effort on; saving pennys per car or figuring out how to pick up another quarter in revenue per car?

This is where the entirity of the article came into play. It was not only about chemical cost. Kate took our suggestions and listed them... some were edited. One suggestion of mine was on inventory that got cut out or not used properly. That is to have the chemical supplier front the inital chemical line as inventory consignment and you only pay as that is used. This can save upfront $3000 - $5000. Delayed billing or eairly payments with discounts can also save $.

The cost savings can only go so far. As Earl said... he's down to 20 cents a car (I'm at about 28 cents), So how much futher can you go there? delayed billing... eairly payment discounts, inventory control consignment can futher reduce (even put off payments into next tax year and roll them off the books).

I think we need to look at how to raise that 5% in revenue on top of cutting expenditures.

 

[rph9168]

Th most recent conveyor survey in PCD indicated that chemicals are less than 6% of the operating cost in ful/flex serve formats and around 7% in exterior only washes and around 9 in an express exterior. I would think better product performance would be a priority over saving a nickel or dime a car. Some chemical companies also offer free signage and marketing with their products which could also be a bonus.

I agree with several of the posts here. I think more effort in raising revenues or increasing volume would benefit the operator more than saving on chemical.

 

[smokun]

Wasn't the original question focused on chemical cost reduction?

Okay, who shifted gears... and changed direction? I thought the question was related to chemicals.

Then, apparently somebody had an epiphany! But, there's nothing new here.

Basic Business 101:
There are 2 ways to increase profit. INCREASE SALES and DECREASE COSTS.

In business, BOTH activities should be part of an everyday activity. The Japanese refer to it as KAIZEN... or "continuous improvement". Akin to "uninterrupted small bites out of the apple".

In cost reduction, it may be "better buying"... or prudent efficiency practices. In sales growth, it usually means innovation... and good old fashioned tenacity. Some call it "working smarter".

D?j? vu... all over again.

-Steve

 

[Earl Weiss]

Although it makes a lot of sense to do your best to minimize operating expenses, what do you do when you have finally squeezed the last few excess cents out of per unit variable cost?

Quite frankly, at most washes, the benefit from a mere 5% increase increase in sales volumes will dwarf the benefit from saving, say, $0.10 per car in chemical. So where do you want to spend your valuable time and effort on; saving pennys per car or figuring out how to pick up another quarter in revenue per car?

,,,

First of all the two factors are NOT mutualy exclusive. Save 10 cents a car on 100,000 cars and you just put another $10,000.00 in your pocket (before taxes).

When you squeeze out the last few cents, never rest. Improve efficiencies. Read message boards, look for other ways to save... VFD's, Blower air gates, etc.

If you are an EE priced at $3.50 with a per unit gross of $2.50, and washing 100k , your hypothetical 5% bump is an extra $12,500.00 to the botttom line. A little better than the solution cost, but speculative.

Picking up another quarter in revenue is good, but aside from a straight out price increase if you are adding an extra service their is likely some cost involved as well, and again added revenue projections are speculative.

So in answer to your question, efficiency savings are a sure profit booster, and require little effort, while boosting volume and sales require more effort and are speculative.

But, again, DO BOTH.

 

[smokun]

GROSS versus NET

Couldn't agree more, Earl.

Wide awake owners quickly realize the difference between GROSS revenue and NET profit. Gross is what you make... and NET is what you keep! (or at least share with your Uncle in DC)

By relentlessly focusing on both sales revenues... and cost of sales, you continually aim to improve on performance.

So... given the choice, do both!

-Steve

 

[robert roman]

Speculating is part of the fun of being self-employed.

Last year, I helped an express exterior operator increase sales volume by over 35% and increase average revenue by over $1.50. I also showed him to save over $0.10 per car on COG. I believe he was a lot more happy with the first result though.

Which one would make you more happy?