When a supplier becomes the competition

[jfmoran]

Apparently...

Apparently, as long as it is a test site only, in close proximity to the factory (not sure how close it has to be, but 4 hours is too far away) everything is okay. Not sure if they are allowed to make a profit or not. Anything beyond that is considered unethical.

Did Dougben sneak back on here under an assumed name...?

 

[I.B. Washincars]

Did Dougben sneak back on here under an assumed name...?

Possibly, but he actually built his wash next door to another car wash, not across the street.

 

[BayWatch]

Let me first say that a few years ago I ordered a truckload of their catalogs and at the same time, stopped buying toilet paper. With this being said,

This is exactly what this country is about. WalMart and McDonalds are the American dream. Not everyone is going to be "successful". You have something good and someone moves in next door and takes it away from you. I feel for you. Dont want it to happen to me, but it is what happens.

If you feel different, move the Russia, they are quickly returning to the "everyone gets a cow and chicken" idealogy. The "yet to be named" company from FL has the right to use it assets to spread its reach. Ever used your kids to mow the lawn or take out the trash. Ever used something from your car wash for personal use like tools, etc. They can do what the want.

The only hope I have is they run this new location like their current business. I thought the car wash market in FL was headed south?

 

[Greg Pack]

I actually have more respect for manufacturers and distributors who are also operators. They have been there and done that. They are more capable of understanding our concerns. If they run a retail location every day they have to deal with the guy on the street who bitchin about his wheels not coming clean and the car is not dry. And hopefully they will manufacture equipment and improve processes based on their experience. This industry has plenty of salesmen who don't know a damn thing about running a car wash. 80% of them don't know as much about their equipment and what is important to the wash customer as an operator with a single year of experience. I don't deal with them.

I don't think Sonny's and many other tunnel manufacturers who are pushing expresses right now give a flying rip about the self serve businesses. Some express salesman I know are telling their prospects not to worry about a the location of the self serves in the market-its not to be concerned with. They plan on steamrolling over any SS or IBAs in their way. They did a pretty good job of it in Atlanta (admittedly they have cannibalized other expresses badly too)

 

[jfmoran]

Amusing

What's amusing about this whole thing is that Sonny's being an operator is not new. It is how they started out in the industry probably 50 years ago. They have always been operators of car washes. The first car washes bought by Wash Depot back in the 90's were owned by the Fazio's and operated in Massachusetts and Florida. While Paul runs Sonny's, Mike never left the operator side of the industry.

 

[dewey9876]

What's amusing about this whole thing is that Sonny's being an operator is not new. It is how they started out in the industry probably 50 years ago. They have always been operators of car washes. The first car washes bought by Wash Depot back in the 90's were owned by the Fazio's and operated in Massachusetts and Florida. While Paul runs Sonny's, Mike never left the operator side of the industry.

Yes this is true.
The big difference between this situation and McDonalds opening a corp. store near a franchise is that a McDonalds franchise is forced to buy from the corp. In this case we are all free to buy from who we choose. God bless America!

 

[DavidM]

Did the existing wash use the manufacturer's equipment? That seems relevant when drawing these arbitrary lines about what is right and wrong. At least it helps me place my line in this case.

I don't like a manufacturer building washes but they certainly have the right to do so. Let the existing tunnel improve to compete. Would I build near someone else? No, it doesn't seem like wise site selection to me but I don't know it all.

I believe the express tunnel cycle will run its course before too long. We are about due for the next car wash fad. There are viable locations for express tunnels but they are not the universal perfect car wash that the marketers would like to suggest. I also feel it is fairly easy to compete with them in many areas. Offer just a little bit of service at a fair price and most of them don't have the ability to compete. The salesmen sell EE as the new Self Serve, no work, just collect the cash and find someone that can point right and left to get the customer's tire between the rails.

Dave

 

[chadrpalmer]

not sure if im smart enough to figure out the ethics of this one...on a much smaller scale, we compete with a couple of distributors in our area...i never considered either of us crooked for competing and doing business together as well...to go off point, the comment previous to mine is the second in as many days where ive read someone refer to express washing as a "fad." i believe that is either short-sighted, or envy...at least with our business model, not for one second have we thought this would be "easy" and its takes two dedicated, intelligent managers to run our wash 80 plus hours a week, dont know where this idea is coming from, and we sure never listened to any salesperson who said this would be easy. So instead of sitting around waiting for the "fad" to pass, get your head out of your posterior and go compete with em, best of luck. theres enough pie for everyone, the lazy ones will always fall by the side of the road.

 

[Red Baron]

Claiming that a vendor within industry "X" cannot compete in industry "Y" exhibits an entitlement mentality.

Nope. Doesn't mean that at all. We're not talking about legalities here. X has a legal right to compete with his customer, Y, but X has to understand that doing so is grounds for Y to stop doing business with X and do business with Z instead. Shortsighted greed is the worst kind.

 

[Red Baron]

This is exactly what this country is about. WalMart and McDonalds are the American dream. Not everyone is going to be "successful". You have something good and someone moves in next door and takes it away from you. I feel for you. Dont want it to happen to me, but it is what happens.

Sam Walton would be rolling over in his grave if he knew how is company was being managed. But to stay on my point, Sam and Drayton McLane were friends and each other's customers - Sam wouldn't have dreamed of pushing into McLane's market even though he easily could have.

Way too many people are willing to screw anyone to make a buck and defend themselves by claiming that's how capitalism works. Capitalism also works without placing the highest possible profit as life's absolute highest priority.

 

[DavidM]

Chad, by "fad" I did not mean to suggest that EE washing will go away or that it is not a good business. Our industry is benefiting from changes due to EE. My point is simply that recently there has been a significant industry focus on this one segment. A few years ago there was significantly more focus on inbay automatics. Something else will will be the hot topic in a few years. (maybe "current hot topic" is a phrase than fad)
I don't think it is necessary to suggest I am "short-sighted", "envious" or that my "head is in my posterior". As I wrote previously, there are good EE locations. I believe EE will be with us for a long time. My point is that the marketing of EE has been overzealous.
BTW, I am competing, and quite well with a local EE.

Dave

 

[jfmoran]

Just So I understand...

Just so I am clear on this argument: A manufacturer who operates car washes is unethical.

Since I am a logical person I like to follow out the line of logic. Does that mean then that operators of car washes who also distribute chemicals or car wash equipment for a manufacturer or may even manufacture equipment themselves that they sell or just use for their own washes, they in turn would be considered unethical, assuming we apply we apply the same standard? Yes?

 

[BayWatch]

Way too many people are willing to screw anyone to make a buck and defend themselves by claiming that's how capitalism works. Capitalism also works without placing the highest possible profit as life's absolute highest priority.

If I paid off a city councilman to vote in favor of changing the zoning on a portion of land next to yours, that is unethical.

If someone has the investment to construct and operate a business that abides by the law, they have the right to do so, now matter what. As long as the P&Z/Council approve it, then do it. I am not out to "screw" anyone, but if I thought I could build a wash right next to anyone that would turn a profit, I would. That is capitalism as defined by

Webster's: an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market

Sending someone a $325 invoice for cleanup is screwing them.

 

[BayWatch]

Sorry, $375.

 

[Greg Pack]

Some quick guesstimates on savings:

New Construction- Probably ~40% discount on equipment, which probably translates to a 15% discount on total project costs.

As far as operations- 40% discount on parts & repair labor, 30-40% discount on chemicals

They pay the same thing I do for labor, utilities, bank charges, insurance, property taxes,etc. So in the end their margins are better by maybe 5-7%. Not bad. I don't want them in my back yard but as long at they are tormenting some other poor sap in another market I could see where it will help them become a better manufacturer.

 

[Red Baron]

BW, don't be a crybaby. How in the world could you know if my $375 was too high, just right, or too low? You couldn't; you just had your toes stepped on and you're mouthing off.

As for business ethics, you better hope that your deep pockets boss has a better understanding of the concept than you have, lest he mow over you wash like yesterday's weeds. Lucky for you, from what I hear about KM, he wouldn't build a car wash across the street from you just because there might be a few bucks profit in it.

Our manufacturing business deals with this kind of thing all the time, from former employees/distributors who don't have enough creativity to generate their own ideas. They find it easier to spy on what the other guy is doing, then copy it if they think it's working for the guy. For crying out loud, there are 10 jillion places to build a car wash - why be a nuisance rather than making your own way in this world!

 

[chadrpalmer]

david, sorry for making it too personal....fad as defined by webster "a temporary fashion, notion, manner of conduct etc...." thought thats what you meant, simply trying to argue there is nothing temporary about express washing, sorry for my failure to communicate that correctly.

 

[Red Baron]

Why am I arguing with you? Why am I asking myself questions?

 

[mac]

Some good thoughts here. Even though I now sell equipment ( a little plug for Magic Wand there) I have also owned and operated self serve and automatic washes. On the whole it gave me a perpestive that has greatly enhanced my business. It indeed seperates me from 90% of my competitors. But, and there's always a but, the washes I have owned were usually ones from a bankruptcy or desperation sale. In these cases I turned the washes around and made a tidy profit. I don't go into markets to do a wash as a competitor. If I see a market that is just begging for a wash, I would certainly reconsider that. However in Florida, no such place exists anymore. My main point in this was to let operators know that when they buy certain supplies to run their business, they may be enriching their present or future competitor. Again all perfectly legal. Ethics is something that most can't agree on anymore. Most people nowadays think that the ten commands are actually the ten suggestions for a happy life. Oprah is rumored to be having that book soon on her show.

 

[Red Baron]

The Golden Rule applies to business, imo. And I don't think it's just some antiquated do-gooder attitude that means giving up some profit. I think operating your business in an ethical way makes good business sense as well. Our mfg co (koldking.com) is unique in that we refuse to sell a roof rig to customers' competitors. I have turned down around 15 rig sales in the last 3 years for that reason, at around $15k profit ea. Our competitor's laugh at our policy and say it's just a sales gimmick. But that customer loyalty is usually a 2-way street and it comes back to us manifold. So long as our competitors, combined, don't do 1/2 the business we do, they can laugh all they want.

BW, unless I misread your profile, most of your 13 years experience has been working for someone else. If that's the case, I'd tell you that there is a lot more nuance to being in business than just the dollars and cents. What goes around comes around - if you make a habit out of sticking car washes right under the nose of other car washes, it's just a matter of time until someone with deeper pockets than you does the same to you.

I know of a slamdunk location in Lubbock, less than 1/2 block from a marginal car wash that is barely scraping by. The lot can be had very reasonably, and as I say, it's a no brainer location. I guess I should just jump on it and send the other car wash owner on into bankruptcy? What a way to go through life.