Chemical Cost

[guitarandy]

I'm reevaluating my chemicals. Currently I'm using Lustra Ultraflex. My chemical cost was almost 9.5% of gross last year. I am happy with the way each product works but am a little concerned about the price. This is for a 1 IBA, 4 SS wash.

I was wondering what other operators spent on chemicals as a percentage of gross in 2011.

 

[rph9168]

9.5% seems high. Should be in the 4-6% range.

 

[guitarandy]

Kinda what I was thinking.

 

[Greg Pack]

Yes, I agree that is too high. Has your rep visited your site? Perhaps he could tweak a little and get the cost down without impairing performance.

 

[guitarandy]

My Laserwash 360 accounts for 75% of the revenue and I know IBA's are chemical hogs. I also included softener salt in my chemical account, when I take that and a few other things off it comes out to around 9% of gross, still high.

Next question: What are other operators chemical cost for IBA's only as a percentage of gross?

 

[Earl Weiss]

Color me naive but how do you judge if solution cost as a % of revenue is too high without knowing the pricing / time structure?

It would seem to me that a chemical would have to be analyzed as X dilution over Y time = Z usage over time. So the issue is Z usage cost.

Next you would have to look at pricing to see what someone is charging for Z useage.

So, for the guy charging 50 cents a minute in a SS bay his % would be much less than a guy charging 25 cents a minute in a SS bay.

Similarly with an IBA package upgrades would seem to play a role. Not an IBA gut but this is why I don't look at overal solution costs for the tunnel. (I look at base price cost / revenue vs upgrade addttional cost / addittional revenue.

By analogy a $4.00 EE using 40 cents in solutions for a base wash has a 10% ratio. If for instance a guy bys a $6.00 upgrade with tire shine that costs 50 cents the chemical ratio just jumped to 15% . But, I don't care because it's an extra $1.50 that basicaly falls to the bottom line. (Viper Shine maintenance is virtualy nil.)

So I could see a lot of upgraded packages or low cost start times impacting percentages.

 

[mac]

I played with the Lustra Ultra Flex line and had a factory rep come and set it up at a touchless auto with self serve. Remember this was set up and calibrated by a factory guy. The cost of chemicals on the touchless auto, a Power Rain, was around $1.06 per car as I remember. Another customer who uses the regular Lustra was getting costs of around $0.60 per car. After talking to other users those figures all were about the same. My conclusion was that the Ultra Flex looks cool and has some good advantages, but paying double the average was hard to sell to other operators.