$3.00 car wash to grow in Chicagoland

[robert roman]

http://www.chicagobusiness.com/arti...-washes-are-opening-all-over-the-chicago-area

 

[Earl Weiss]

"Bob Roman, a car wash consultant in Clearwater, Fla., estimates that the best facilities wash 100,000 cars a year or more and gross $1 million."

$1 Million gross on 100,000 cars per year with $3.00 base. Was this publication the "Onion"?

 

[cmawash]

its Chicago, know for a lot of things,

 

[cwguy.com]

It is just basic marketing.... but with a name like "light wash" the perception is bad and just terrible marketing I believe. You get what you pay for with your consultant advice.

 

[robert roman]

Zoommmmmmmm

 

[Earl Weiss]

At the end of the day what matters is making money. Many businesses entice customers with the lowest price option and then try to upsell. If the customer is not happy with the lowest price option they may or may not try the next price point next time.

 

[cwguy.com]

I would be interested who actually purchases a "light wash"? But I did a quick search and it seems a $3 "light wash" is probably normal in the area? If so there would be no competitive advantage.

 

[Earl Weiss]

I would be interested who actually purchases a "light wash"? But I did a quick search and it seems a $3 "light wash" is probably normal in the area? If so there would be no competitive advantage.

Well, there is. You put up a giant sign that says $3.00 and people like me who started charging $3.50 a few years ago are undercut. But mine is not a "Light Wash" . So they try the light wash, see if they like it and if they do, and it's worthwhile for them to save 50 cents and get the free vacs, that is their advantage.

 

[Turbo]

the original issue is how do you get a $10 ticket ($1,000,000 /100,000 cars) when you are starting at $3, right?

What is the true average ticket (or range) for a $3/ free vac type of wash?

This is essentially the question, right? If so, what is the answer?

(I'm trying to follow and not trying to be a pain)

Thanks

 

[cwguy.com]

Well, there is. You put up a giant sign that says $3.00 and people like me who started charging $3.50 a few years ago are undercut. But mine is not a "Light Wash" . So they try the light wash, see if they like it and if they do, and it's worthwhile for them to save 50 cents and get the free vacs, that is their advantage.

I guess I do not know what a "light wash" is.... is sounds like a bait and switch wash to me? It also looks like their bottom wash is $6?

What about adding "HEAVY WASH" on your $3.50 sign? Everyone should know what you are talking about and realize your wash is different and better. You might even be able to raise the price?

My best marketing plan is why you should not compete on price. Have a $1 wash.... HUGE SIGN. A "Rain Wash".... you have self serve bays at your location right? The "rain wash" is actually in a self serve bay using an arch.... no vacs. You win the bait and switch contest! Also jack up your other prices because according to how customer are attracted to low price signs your average will sky rocket! I would also like 10% of the gross increase.

 

[robert roman]

"Bob Roman, a car wash consultant in Clearwater, Fla., estimates that the best facilities wash 100,000 cars a year or more and gross $1 million."

This was a quote.

“$1 Million gross on 100,000 cars per year with $3.00 base.”

This was not a quote. Like Hillary, it was made up.

“the original issue is how do you get a $10 ticket ($1,000,000 /100,000 cars) when you are starting at $3, right?”

No. The original intent was me providing the link to get reaction from operators on those who seem hell bent on driving price down.

What I said in article Earl took out of context.

“What is the true average ticket (or range) for a $3/ free vac type of wash?”

Here is example based on P & L. Price range is $3.00 to $10.00 average revenue $4.50. I have another with price $3.00 to $12.00 average $8.50.

Higher price makes some difference in average sales but most comes from the difference in the take rate or sales mix.

Take rate for lower average wash for $3.00 is over 50 percent, top package is less than 20 whereas nearly the opposite is the case for other wash.

Reason for different take rates is difference in demographics and marketing strategy and tactics.

The low road for carwash is certainly there to take and easy to follow but excess profits require hard work at marketing.

The $3.00 wash referenced in the article doesn’t do any of this.

 

[Earl Weiss]

"
This was a quote.

“$1 Million gross on 100,000 cars per year with $3.00 base.”

This was not a quote. Like Hillary, it was made up.

“the original issue is how do you get a $10 ticket ($1,000,000 /100,000 cars) when you are starting at $3, right?”

s.

No, that was not the quote. My post # 2 was; "Bob Roman, a car wash consultant in Clearwater, Fla., estimates that the best facilities wash 100,000 cars a year or more and gross $1 million." It was a copy and paste. Can No longer log in so the larger context may have been possible for a different interpretation.

If others can view it I will leave it to them to decide what the overall impression was vis a vis $3.00 base wash generating $1 Million.

 

[Earl Weiss]

Did a work around and got in:

"Can anybody turn a profit washing cars for $3, or even $4? Entrepreneurs seem to think so, as they rush to build big discount auto cleaning facilities in and around Chicago.

..................................................
Nevertheless, some experts warn that supply will soon overwhelm demand. Bob Roman, a car wash consultant in Clearwater, Fla., estimates that the best facilities wash 100,000 cars a year or more and gross $1 million. From that, they might net $150,000 a year in profit. But in many cities, he says, operators are no longer meeting those benchmarks. "Atlanta is already oversaturated with car washes, and the business is ruined there. The same will be coming to California," he says. "So far in Chicago, there seems to be opportunities for guys to build more washes and still make money."

So, no mention in the article of any base above $4.00. If RJR did in fact refer to a higher base and the authors failed to use that portion when using what would be a $10.00 average ticket the fault lies with them.

Notwithstanding that If / when I post something that contains what I supposedly wrote or said I would qualify any inaccuracy.

 

[cwguy.com]

I know who is acting. LOL The article is poorly written. Even the 15k number is silly.

 

[Turbo]

Robert,

what does this mean?: "Higher price makes some difference in average sales but most comes from the difference in the take rate or sales mix.

Take rate for lower average wash for $3.00 is over 50 percent, top package is less than 20 whereas nearly the opposite is the case for other wash."

 

[cwguy.com]

Robert,

what does this mean?: "Higher price makes some difference in average sales but most comes from the difference in the take rate or sales mix.

Take rate for lower average wash for $3.00 is over 50 percent, top package is less than 20 whereas nearly the opposite is the case for other wash."

It means he either cut and paste the wrong stuff from his computer or he has no clue. Which is fine he should just say it. But how would he know unless Earl or someone else in the city told him?

 

[mac]

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.

 

[Earl Weiss]

................... 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? .....................

There are Walmart shoppers and there are Nordstrom Shoppers. Both business models have merit. Whether either or both can be successful in any given market is the all important question. There is a reason numerous higher price washes converted to low price EE. A Local operator has now converted 3 of his tunnels and one 9 + 3 SS and IBA which may have been one of the busiest in the City to EE., plus another closed SS. Perhaps he knows something?

 

[robert roman]

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 for cheap wash in Alabama, some years ago.

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

Why $3.00 price and crappy average ticket?

One reason is many areas in Alabama people don’t have a lot of money to spend. Another reason is “It is just hard to understand why people with money really try to offer the cheapest of anything.”

Here is wash in N.E. region roughly same time period.

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

People in this N.E. region have more money to spend and want the service and willing to pay for it.

Whereas in say, certain parts of Florida, this wouldn’t work as well because people may want the service they just aren’t willing to pay for it.

Here is wash (chain) in Midwest region several years ago.

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

Some washes in chain had average over $10.00.

Why higher prices, better average, yet $3.00?

One reason is some people get it. Another is there are more profit centers (value added) available to offer customers today. If it’s a good value, people will buy it.

You can’t be afraid of asking for the money.

 

[robert roman]

“There is a reason numerous higher price washes converted to low price EE. A Local operator has now converted 3 of his tunnels and one 9 + 3 SS and IBA which may have been one of the busiest in the City to EE., plus another closed SS. Perhaps he knows something?”

Principal reason is consolidation.

Self-serve is diluted and declining. Conveyors predominates total available market.

Express growing market share.

So, industry is ripening for private equity firms. Private equity is a mix of hold but mostly buy sell.

Private equity would acquire statements of risk for express but not self-serve.