I am adding on an 35' addition to a existing 40' touch free automatic bay, and I am looking for suggestions on the following; The total size of the bay after completeion will be 75' I will also change that bay to a soft cloth conveyor. this site also contains 1 touchless automatic and 4 self serve bays. This is an 8 year old site that has seen a drop in the automatic use over time, from 40,000 cars thru the 2 automatics per year to 26,000 last year. My question is, I would like to change to the $3 concept with free vacs,( I also own a very busy $3 exterior express with free vacs) how would you market the site? With $3 on the sign to attract attention, will the cars driving by think that my self serves start at $3 and keep on driving? Also, it will be hard to make the touchless automatic $3 because of the added costs, The touchless and self serves will remain open 24/7, will a customer exspect the touchless wash to be $3 as stated on the sign. will the self serve bussiness go up or down? I think if marketed correctly this site will give every option to all carwash customer. Any thoughts would be helpful Thank You
Converting to a $3 express tunnel
- Thread starter AJG
- Start date
Waxman
Super Moderator
How do you plan to keep the $3 carwash from de-valuing your IBA and even SS options?
I'd be real hesitant to adopt "$3 carwash" as my new mantram.
If you decide that $3 isn't enough, customers rebel at the price increase.
Maybe a better business model is SS and express.
I wouldn't drop the IBA prices at all, because in doing so, customer perception is:"wow, he's been ripping us off for years if he can afford to drop the price to $X".
I'd be real hesitant to adopt "$3 carwash" as my new mantram.
If you decide that $3 isn't enough, customers rebel at the price increase.
Maybe a better business model is SS and express.
I wouldn't drop the IBA prices at all, because in doing so, customer perception is:"wow, he's been ripping us off for years if he can afford to drop the price to $X".
I don't think you will have as much trouble with the SS customers as you will with the touch free automatic business. You didn't say how much the touch free wash is but I assume it is more than $3, probably $5. It will be very difficult to have that much difference in the price without out an adverse effect on the automatic. I would probably market the $3 as the cloth wash with free vacs. Maybe market the touch free with the convenience approach that it is open 24 hrs along with the free vacs. I would guess that it will do very few cars when the conveyor is operating anyway.
That is a substantial decline in automatic customers. I don't know the reason, but if it is due to a lack of interest and/or quality of the wash in your touchless IBA and you see the need to offer a friction option, you might just want to go with a friction IBA. No need to put the addition on the building.
Even if your car count was back to 40,000, two IBA's could easily handle this - even much more than this. You would also be able to keep your investment in the upgrade lower, not putting the addition on the building and not installing a conveyor, which would make it much easier to charge what you want for the wash and offer the free vacs.
I know you can set up and "express" IBA's these days with many systems. Autec has an interesting model I saw on their site a while back. I also saw it with the Sonny's Bay Wash i5.
It is hard to say without knowing the reason for such a decline over 8 years.
Even if your car count was back to 40,000, two IBA's could easily handle this - even much more than this. You would also be able to keep your investment in the upgrade lower, not putting the addition on the building and not installing a conveyor, which would make it much easier to charge what you want for the wash and offer the free vacs.
I know you can set up and "express" IBA's these days with many systems. Autec has an interesting model I saw on their site a while back. I also saw it with the Sonny's Bay Wash i5.
It is hard to say without knowing the reason for such a decline over 8 years.
Earl Weiss
Well-known member
- Joined
- Aug 31, 2007
- Messages
- 6,390
- Reaction score
- 949
- Points
- 113
Took over an 8 bay plus tunnel . Went to the $3.00 EE. I don't think customers avoid the SS because the sign says $3.00 wash. I believe that as mucgh as 20% of the bay business may have transferred to the tunnel.
I think the touchless factor of the IBA can be used to target a different market that wats touchless, but you will certainly lose some to the tunnel.
I think the touchless factor of the IBA can be used to target a different market that wats touchless, but you will certainly lose some to the tunnel.
robert roman
Bob Roman
“This is an 8 year old site that has seen a drop in the automatic use over time, from 40,000 cars thru the 2 automatics per year to 26,000 last year.”
Drop? In other retail sectors, most people would describe this as a death spiral.
Given the history of the site, my advice would be to determine why your business has turned into a sinking ship before spending another several hundred thousand dollars.
Drop? In other retail sectors, most people would describe this as a death spiral.
Given the history of the site, my advice would be to determine why your business has turned into a sinking ship before spending another several hundred thousand dollars.
Exactly why I question almost doubling the length of the bay as well as adding equipment.
Like I said in my previous post, it is difficult to say without knowing the reason for the decline. Even a volume of 40,000 per year will not call for and EE and IBA. How many cars need to be washed in the EE for you to justify the $3 price? How much of a jump is that from 26,000 cars?
I would never want to discourage someone - especially since they know the whole scenario and I don't, but given the information we have received, I would be very cautious.
Earl Weiss
Well-known member
- Joined
- Aug 31, 2007
- Messages
- 6,390
- Reaction score
- 949
- Points
- 113
I amnot an IBA user so we need to hear from some. I can't help but wonder if perhaps the 40K year was exceptionaly good. 40K is an average of over 100 a day every day for a year. Don't know the location but most areas would lose dozens of days to rain meaning the average day was much higher.
What's a realistic production rate (not just cycle time, allowing for customer in and out slowness) 10 cars per hour per IBA?
$3 conversion
Thank's for the comments. I will try to help everyone understand things a little better. I understand that 40,000 cars thru the automatics is probably in the top 1% of automatic washes,and those days may be gone around here.(chicago suburb) our busiest day we washed 340 cars thru the 2 automatics,that means the 2 automatics washed non stop for aprox.19 hour. How many cars did we lose because of long lines? AT present the pricing is as follows $6,$7,$8 with an average ticket of $7.50, I feel the reason for the drop in car counts has to do with many factors, when we first opened, EVERONE took the $8 wash, if I had a $12 wash they would have chosen the $12 wash, because credit cards at carwashes were new to the area, now with the economy customers drive up to the sign look, and many leave because of the price, most carwashes in the area are down 25-50 %. (although my E.E is up 55% since I changes to the $3 format.) In this area, at least for now, unless it is a discounted, priced half off or free, the customers are not interested, in carwashes, food, beer or anything. We have had alot of rain, or days that look like rain. I am not worried about washing cars at the $3 format, I am worried about how to markets the different types of washes, Thank You, All
Thank's for the comments. I will try to help everyone understand things a little better. I understand that 40,000 cars thru the automatics is probably in the top 1% of automatic washes,and those days may be gone around here.(chicago suburb) our busiest day we washed 340 cars thru the 2 automatics,that means the 2 automatics washed non stop for aprox.19 hour. How many cars did we lose because of long lines? AT present the pricing is as follows $6,$7,$8 with an average ticket of $7.50, I feel the reason for the drop in car counts has to do with many factors, when we first opened, EVERONE took the $8 wash, if I had a $12 wash they would have chosen the $12 wash, because credit cards at carwashes were new to the area, now with the economy customers drive up to the sign look, and many leave because of the price, most carwashes in the area are down 25-50 %. (although my E.E is up 55% since I changes to the $3 format.) In this area, at least for now, unless it is a discounted, priced half off or free, the customers are not interested, in carwashes, food, beer or anything. We have had alot of rain, or days that look like rain. I am not worried about washing cars at the $3 format, I am worried about how to markets the different types of washes, Thank You, All
Well maybe the decline in business has something to do with the 19% unemployment rate, the hugh number of foreclosures, and a lousy attitude. Many of my customers are down about the same ratio as AJG, and they run nice washes. My .02 worth would be to replace one auto with a friction one.
Earl Weiss
Well-known member
- Joined
- Aug 31, 2007
- Messages
- 6,390
- Reaction score
- 949
- Points
- 113
Now that you gave the geography things are much clearer. The weather has been dreadful the last few years. 2009 Jan - Jun was wettest on record. Several years prior we also had unusual wet weather, again some record wet months or rainy winter which killed the usual boom / salt months.
It is certainly possible that from the best to the current time there was a volume drop of 1/3. I think we may need to keep in mind that the best may have been unusualy good and not an average even though we had a good stretch of several years which made us think it was the average.
It is certainly possible that from the best to the current time there was a volume drop of 1/3. I think we may need to keep in mind that the best may have been unusualy good and not an average even though we had a good stretch of several years which made us think it was the average.
I have seen a set up with a short tunnel, IBA and self service in several locations do very well. That was before the $3 express movement which complicates the situation. I would still market the IBA as a 24/7 option.
Not sure about differentiating between the friction tunnel and touchfree auto. Just looking at the set up should show the difference. The cost differential is a greater concern but I don't think anyone could predict the outcome accurately. Some people will want the touchfree and will pay the difference while others will go for the $3 that might have previously used the auto.
Not sure about differentiating between the friction tunnel and touchfree auto. Just looking at the set up should show the difference. The cost differential is a greater concern but I don't think anyone could predict the outcome accurately. Some people will want the touchfree and will pay the difference while others will go for the $3 that might have previously used the auto.
robert roman
Bob Roman
“I understand that 40,000 cars thru …. is probably in the top 1% …”
Actually, it is not. 20,000 is still a fairly typical volume for an in-bay in many parts of the country.
“… our busiest day we washed 340 cars …, that means the 2 automatics washed non stop for aprox.19 hour. How many cars did we lose because of long lines?”
Most likely, you lost tons of cars and profit.
“AT present the pricing is as follows $6,$7,$8 with an average ticket of $7.50,”
If price was an issue, I would think that you would have something far less than $7.50 a car with a top price of $8.00.
“when we first opened, EVERONE took the $8 wash, if I had a $12 wash they would have chosen the $12 wash, because credit cards at carwashes were new to the area”
Experience has shown that people tend to spend more money (average and total purchase) with plastic as opposed to cash but this is not always true. Most likely, people chose the top wash because you were new and improved, as compared to the competition, and people wanted the quality, in numbers.
People have not lost their interest in car washes, food, beer or anything else. The difference today is that people not only want the quality, they also want more value for their money and, in certain markets, in less numbers (frequency).
“most carwashes in the area are down 25-50 %. (although my E.E is up 55% since I changes to the $3 format.)”
Your express volume may be up by 55% but I would doubt that your profit is up by 55%.
“I am not worried about washing cars at the $3 format,”
Since most express exteriors have average variable unit cost of about $2.60 or so, you should be worried.
You asked how to market the wash but most of this discussion has focused on equipment (in-bay versus conveyor) and price. This is not marketing.
Good equipment is essential for efficiency and productivity but the equipment does little to bring customers and owners together, people do.
So, if you are looking to turn your fortunes around, I would look towards marketing for solutions instead of equipment. This means product, pricing, distribution and promotion.
Actually, it is not. 20,000 is still a fairly typical volume for an in-bay in many parts of the country.
“… our busiest day we washed 340 cars …, that means the 2 automatics washed non stop for aprox.19 hour. How many cars did we lose because of long lines?”
Most likely, you lost tons of cars and profit.
“AT present the pricing is as follows $6,$7,$8 with an average ticket of $7.50,”
If price was an issue, I would think that you would have something far less than $7.50 a car with a top price of $8.00.
“when we first opened, EVERONE took the $8 wash, if I had a $12 wash they would have chosen the $12 wash, because credit cards at carwashes were new to the area”
Experience has shown that people tend to spend more money (average and total purchase) with plastic as opposed to cash but this is not always true. Most likely, people chose the top wash because you were new and improved, as compared to the competition, and people wanted the quality, in numbers.
People have not lost their interest in car washes, food, beer or anything else. The difference today is that people not only want the quality, they also want more value for their money and, in certain markets, in less numbers (frequency).
“most carwashes in the area are down 25-50 %. (although my E.E is up 55% since I changes to the $3 format.)”
Your express volume may be up by 55% but I would doubt that your profit is up by 55%.
“I am not worried about washing cars at the $3 format,”
Since most express exteriors have average variable unit cost of about $2.60 or so, you should be worried.
You asked how to market the wash but most of this discussion has focused on equipment (in-bay versus conveyor) and price. This is not marketing.
Good equipment is essential for efficiency and productivity but the equipment does little to bring customers and owners together, people do.
So, if you are looking to turn your fortunes around, I would look towards marketing for solutions instead of equipment. This means product, pricing, distribution and promotion.
Earl Weiss
Well-known member
- Joined
- Aug 31, 2007
- Messages
- 6,390
- Reaction score
- 949
- Points
- 113
robert roman;43812 Since most express exteriors have average variable unit cost of about $2.60 or so said:
robert roman
Bob Roman
Since I can’t speak for Mr. Essenberg, you may want to contact him and find out what he is willing to share.
I do have clients and friends who pay around $3.00 per 1,000 gallon of fresh water as well as some who are paying upwards of $9.00. I also know owners who spend $0.50 or more in fuel charges to dry a car while others spend zero. Similarly, I know owners who have very different per unit chemical costs. Nevertheless, I find average variable unit cost in the range of $2.60 or so is not uncommon for an express wash.
I calculate average variable unit cost to include cost of goods and normal operating expenses that are truly variable. I do not include semi-variable costs or fixed costs.
I do have clients and friends who pay around $3.00 per 1,000 gallon of fresh water as well as some who are paying upwards of $9.00. I also know owners who spend $0.50 or more in fuel charges to dry a car while others spend zero. Similarly, I know owners who have very different per unit chemical costs. Nevertheless, I find average variable unit cost in the range of $2.60 or so is not uncommon for an express wash.
I calculate average variable unit cost to include cost of goods and normal operating expenses that are truly variable. I do not include semi-variable costs or fixed costs.
Earl Weiss
Well-known member
- Joined
- Aug 31, 2007
- Messages
- 6,390
- Reaction score
- 949
- Points
- 113
A. I don't expect you to speak for Mr. Essenberg. Your numbers are within 10% so I would expect the components will be similar.
B. I understand there is a range of variables, however you needed to pick somewhere within that range to come up with the figures.
C. Please either advise as to the requested breakdown, or if for some reason you feel this is something that you are typicaly compensated for let us know and I will no longewr try to have you elaborate. I can't help but wonder if the elements I listed above contain some sort of glaring omission.
robert roman
Bob Roman
With all due respect, Earl, who doesn't like to make a little money once in a while.
However, if I actually "expected" anything from participating at this venue, I would have stopped participating a long time ago.
Here is a breakdown of Essenberg's numbers.
Wages $95,000
Payroll $14,250 (wage component, not mgmt)
Chem $85,000
Gas $16,100
Elec $45,700
Water $20,700
Claims $10,150
Supplies $10,000
Maint $22,000
Expense $318,900
Volume 122,400
AVC/unit $2.61
Pretty close to his $2.75. I read his article yesterday.
Your list appears to omit labor burden, claims and supplies.
This took all of about 2 minutes. Actually, it took a bit longer but I was eating pork chops and eggs while doing so.
So, send me $2.00 and we can call it even. LOL.
Is it possible or even desirable to get under $2.75 or so? I've seen it done but it ain't pretty.
Shaving costs to the bone is consistent with the notion of efficient but cost savings alone will not make a material difference in resolving AJG's dilemma.
However, if I actually "expected" anything from participating at this venue, I would have stopped participating a long time ago.
Here is a breakdown of Essenberg's numbers.
Wages $95,000
Payroll $14,250 (wage component, not mgmt)
Chem $85,000
Gas $16,100
Elec $45,700
Water $20,700
Claims $10,150
Supplies $10,000
Maint $22,000
Expense $318,900
Volume 122,400
AVC/unit $2.61
Pretty close to his $2.75. I read his article yesterday.
Your list appears to omit labor burden, claims and supplies.
This took all of about 2 minutes. Actually, it took a bit longer but I was eating pork chops and eggs while doing so.
So, send me $2.00 and we can call it even. LOL.
Is it possible or even desirable to get under $2.75 or so? I've seen it done but it ain't pretty.
Shaving costs to the bone is consistent with the notion of efficient but cost savings alone will not make a material difference in resolving AJG's dilemma.
Earl Weiss
Well-known member
- Joined
- Aug 31, 2007
- Messages
- 6,390
- Reaction score
- 949
- Points
- 113
Here is the issue I have.
1. Labor in an EE is not a variable cost for washing a car. Your labor is or should be about the same if you wash 75,000 cars annualy or 150,000 cars annualy. Granted, at a certain volume point you may need to add extra labor, but it is not an incremental cost of washing a car.
2. I am not sure what is meant by supplies. I believe anything listed as supplies used incrementaly for the wash process would fall under the Chemical / solution or repair category.
3. His Chemical cost from the article (as he notes) is for everything including extra sales (rain X , Tire Shie, Sealer, Polish wax etc. ) so it is way off in factoring the base wash cost.
So, Backing out labor, and reducing chemical cost by $40,000 (Still leaves 32 cents a car for Pre Soak, Soap, Wheel cleaner and Drying agent) is a total reduction of $150,000.00 or a total expense of about $169,000.00.
This means that your incremental cost to wash a car is $1.39, not $2.75.
If you back out the $10,000.00 in supplies you are down to $1.30 per car.
Maybe even less if you factor baseline costs for Electricity, and gas (Water omitted since it is so small) due to building operations unrelated to washing.
So, it's not a question of saving costs but it is important with regard to evaluating a price drop versus incremental violume increase.
Earl Weiss
Well-known member
- Joined
- Aug 31, 2007
- Messages
- 6,390
- Reaction score
- 949
- Points
- 113
Oh, and thanks for the input.
robert roman
Bob Roman
Maybe I muddied the water with semi-variable. I can’t fault your logic in calculating the absolute base cost to wash a car but how useful is that number. I would not use it for break-even because the analysis requires total fixed cost, average variable unit cost, average price and anticipated quantity sold. Direct labor as well as a greeter’s sales commissions and payroll tax on these wages and commissions should go into AVC because each is a direct cost of production, as well as damage claims, etc. I would also include all chemical cost because break-even relies on average price.
