$3.00 car wash to grow in Chicagoland

[Earl Weiss]

Turbo,

Average revenue = Sum (price X take rate)

Take rate shows how sales mix is divided in terms of percentage of what customers buy.

Here are prices and take rates .......................

AR = ($3 X 50%) + ($4 X 25%) + ($6 X 20%) + ($9 X 5%) = $4.15

...........................
AR = ($3 X 30%) + ($4 X 10%) + ($6 X 40%) + ($9 X 20%) = $5.50

Wash adds rain-x for $3.00 and 25 percent buy.

$3.00 X 0.25 = $0.75 + $5.50 = $6.25 average

Wash adds prep service for $2.50 and 20 percent buy.

$2.50 X 0.20 = $0.50 + $6.25 = $6.75 average

........

AR = ($3 X 20%) + ($5 X 10%) + ($8 X 40%) + ($11 X 30%) = $7.60

Add prep and hot wax ($4.00 X 0.25) = $0.50 + $1.00 + $7.60 = $9.10 average
.

I find that this seems like more realistic figures. However, I need more 411. RJR what is "prep" If that is a manual service it tends to go outside of what many consider an EE and moving toward flex. It may also have a labor cost component.

 

[loewem]

Having a hard time following this and making sense out of it. It is just hard to understand why people with money really try to offer the cheapest of anything. I have always maintained in my business that I never want to be known as the cheapest at ANYTHING. Sorry, but I would rather deal with people who don't mind charging more than others and offering better quality. What's next? 0.99 cent car wash ? Hey we get your car wet. What do you expect for 0.99? Maybe that's why we have obama in the oval office.

this was the only post in this thread that I didn't have to read twice and I understood it. Well said.

 

[cwguy.com]

I thought the discussion was about advertising a price to just get cars wet.... so you could upsell customers on your lot?

I also doubt the 5mil location has a large percentage selecting the $3 wash.... which I was questioning. I assume no one has an answer? Which is fine.... It is just a weird marketing strategy. That is why I asked.... every city is different.

Bob's numbers if they are going to be posted in this situation (I believe.... I am not sure what is being discussed) have to be clarified to have any contextual significance. The menu items and features are in question here.

Just like his Alabama numbers.... everything around me starts at $6 or $7. Plus Bob's prices are so close together ($3, $4, $6, $9).... My guess is his information is around 10 years old?
Two express washes near my grass hut (BTW everyone in AL lives in a grass hut. ) are at:
$7, $12, $15, $20
$6, $10, $15, $18
My wife usually uses a flex or full service though.

Anyway.... there has been a huge push to move the menu items further apart. (Price wise over the years.) Also I think flex would help tremendously for expresses. But labor cost may never allow it.

 

[Earl Weiss]

I thought the discussion was about advertising a price to just get cars wet.... so you could upsell customers on your lot?

I also doubt the 5mil location has a large percentage selecting the $3 wash.... which I was questioning. I assume no one has an answer? Which is fine.... It is just a weird marketing strategy. That is why I asked.... every city is different.

.

Discussion was about the growth of the $3.00 wash and what the realistic up sell is. So far one elephant in the room is ignored, and I am sure the answers are out there you just need to see which you believe. The elephant is the monthly washes. If a $3.00 prices it at $15.00 are the people coming more or less than 5 times a month and what does that do to the "Average ticket". One would think that if the people realized they averaged less than the monthly cost mutiple they would quit the program.

 

[robert roman]

“RJR what is "prep" If that is a manual service it tends to go outside of what many consider an EE and moving toward flex. It may also have a labor cost component.”

Prep is manual service performed by conveyor attendants during loading process.

Although prep is an assisted-service, I consider it more an extension of exterior express format rather than flexible service.

Reason is flexible service implies a dedicated area exists to perform value-added such as interior cleaning, express detail, reconditioning, lube or other assisted-services.

What are prepped are high impact areas – bumper, grille, headlight, windshield, side mirrors and rims.

At lower volumes, standard crew size has no problem incorporating service with other roles and responsibilities. At higher volumes, when very busy, one additional person is required.

125,000 CPY X 0.2 X $2.50 = $62,500

So, even fully burdened, gross net is $35,000.

Funny thing, where this takes rapidly, and it does even where blue collar predominates, people usually want even more. Reason is they are dying for service because the market isn’t addressing their needs.

Monetizing conveyor attendants isn’t new, and I certainly didn’t invent it.

“My guess is his information is around 10 years old?”

Some of it is and some newer.

“There has been a huge push to move the menu items further apart. (Price wise over the years.) “

Why did Benny’s re-brand? I believe one reason was to create more separation from the old $3.00 or $4.00 carwash franchise.

“Also I think flex would help tremendously for expresses. But labor cost may never allow it.”

Flexible service format would definitely provide lift but the business model isn’t consistent with express management strategy.

Automated polishing tunnel could provide lift but requires significant capital investment in building and equipment and requires attendant labor.

 

[cwguy.com]

Discussion was about the growth of the $3.00 wash and what the realistic up sell is. So far one elephant in the room is ignored, and I am sure the answers are out there you just need to see which you believe. The elephant is the monthly washes. If a $3.00 prices it at $15.00 are the people coming more or less than 5 times a month and what does that do to the "Average ticket". One would think that if the people realized they averaged less than the monthly cost mutiple they would quit the program.

It appears everyone is doing monthly around here now. I hate to state the obvious but the marketing strategy is to still allow or "require" upgrades. This I believe is the best market strategy.... Brand loyalty.

I do not remember for sure.... I think <4? First month 100 washes though. JK (I believe 5-6.)

The 2 locations next to where I live.
$7, $12, $15, $20
Monthly: $20, $30
$6, $10, $15, $18
Monthly: $20, $25, $35

Add a car is another good option.... The avg was even lower on the second car. My Dad does this and I also did a website for someone that offered this option.

 

[rph9168]

Most of the EE's here in Atlanta started out at $3 with packages up to $7-8 five or six years ago. Many have been sold to new owners mainly due to their inability to make a profit. Today there are no $3 EE washes. Most are at $6 with some having packages up to $18. There are also some full service washes offering an exterior only for $4 in an effort to compete with the EE's. The problem most of those have is that their wash configuration does not work well for exterior only washes and they do not have a kiosk type set up. In addition all their other wash packages are full service so they do not offer exterior packages beyond the basic.

I know the owner of several of the EE's. He said he was able to make a very small profit initially but had to raise his prices to survive in the long term. He also said that while his volumes tended to drop as he raised his prices his revenues and profitability grew to a much more acceptable level. I have no current knowledge of the Chicago market but I would guess that the $3 washes there will probably experience a similar scenario.

 

[cwguy.com]

I have no current knowledge of the Chicago market but I would guess that the $3 washes there will probably experience a similar scenario.

That is what is intriguing about the Chicago market though. It seems like instead of the price adjustment some operators created a "light wash". Which I have never seen before. Other operators in the same area are still competing on price.... $3.50, $4.00. But technically the "light wash" operatior is selling the same wash for $6.

 

[Robert2181]

I wonder if sometimes things work different/better/worse in markets where it is more congested!

 

[cwguy.com]

I wonder if sometimes things work different/better/worse in markets where it is more congested!

Both the express washes I mentioned in my area.... do not post their prices so you can read them from the road.

The prices seem to have come off expresses in the areas I drive locally. Except maybe GooGoo which I believe are around $7?

Suburb of Birmingham: Hoover data LINK

 

[Earl Weiss]

The party line among the Chicago area EE operators is that they do not see a price raise in sight. I heard one guy wishes he started at $4.00. Time will tell if they build volume to a point where they feel comfortable with a price raise. Chicago is implementing a water / sewer tax which will total 21% in the next 3 years. Real estate taxes are also set to rise. Both are needed due to legal mandate for funding pensions that have been ignored for too long.

 

[BBE]

It appears everyone is doing monthly around here now. I hate to state the obvious but the marketing strategy is to still allow or "require" upgrades. This I believe is the best market strategy.... Brand loyalty.

I do not remember for sure.... I think <4? First month 100 washes though. JK (I believe 5-6.)

The 2 locations next to where I live.
$7, $12, $15, $20
Monthly: $20, $30
$6, $10, $15, $18
Monthly: $20, $25, $35

Add a car is another good option.... The avg was even lower on the second car. My Dad does this and I also did a website for someone that offered this option.

Not to derail the thread, but quick question. At those 2 locations you mentioned, are they giving the underbody wash on their basic package and 20 dollar monthly, or using it as an upsell to the next package up?

 

[cwguy.com]

Not to derail the thread, but quick question. At those 2 locations you mentioned, are they giving the underbody wash on their basic package and 20 dollar monthly, or using it as an upsell to the next package up?

This is Alabama.... we do not even have salt trucks. I am not sure this is even a factor.... Or a selling point here? If someone ever asked me that question at an express I would ask to see their car. LOL (They would probably have heavy mud on their car.)

Hoover is also located in the upper middle part of the state basically.... not close to the coast either.

Bottom $7 and their website does not even state he offers undercarriage. But he may offer it on all his washes? He is a really nice guy and runs a good operation.
https://marc1carwash.com/locations/hoover/
Bottom $6 and no undercarriage for the $20 plan.... super nice location.
http://www.blueraincarwash.com/category/10808/blue-rain-car-wash-menu.htm