I opened up about a month ago and the only other wash in town has now dropped his price to 50 cents. I think that is crazy. Half of his lights are out, his glass front vendor has a out of order sign on the front of it, which has been that way for 6 months. You would think he would bring his wash up instead of bringing his price down. Im actually going up on my price after I open my IBA and have my grand opening. Don't understand his logic.
Competitor dropped his price to 50 cents.
- Thread starter APW
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I.B. Washincars
Car Washer Emeritus
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Operators that do things like that are usually grasping at straws. IMO, this move will only accelerate his demise. Just do what you are doing. I think you are on the right path.
MEP001
Well-known member
Most of the ones that will go to the lowest-price wash are the ones that you don't want anyway, like the guys that will bring their own water and bucket-wash for 20 minutes just to rinse when they're done, or the bed washers just blowing out leaves or screws. The people that actually want to clean their car will go to the better wash.
We're between two washes owned by the same guy - we're 50% higher priced, give 25% more time per coin, and on any given nice weekday they'll have more dry bays than we'll have people washing.
We're between two washes owned by the same guy - we're 50% higher priced, give 25% more time per coin, and on any given nice weekday they'll have more dry bays than we'll have people washing.
My competitor did the same thing. Lowered the price of selfserve bays and vacuums shortly after being taken over by a new owner. I haven't noticed any drop off in business. Like Mep says. It drives the less desirable people to his wash so it kind of helps me out. Its usually the trash dumpers, pickup truck debris washers, people to lazy to hang any hoses up etc. that go there. When its advertised on his sign I just chuckle. Might as well advertise, I am desperate and this is a POS wash. I find people are willing to pay a little more for stuff that works, and looks good.
robert roman
Bob Roman
Before you came along, the only other wash in town had the opportunity to enjoy the benefits of a monopoly.
Because of the lack of competition, a monopolist “can” charge a higher price than in a more competitive market, making super normal profit.
In this case, the monopolist sat on his laurel and most likely let his place run down because no one, until you, contested the marketplace.
If the monopolist has no mortgage, then lowering price may be an effective strategy because this guy would have more staying power than you do.
You also have to consider the marketplace.
Alma and other small towns in this part of Georgia are not strong carwash markets.
For example, per capita income for the area is less than 1/2 the national average. This implies that a large portion of the population live below the poverty line.
Historically, folks living below the poverty line aren’t the most loyal of carwash customers.
Experience shows price increases tend to raise average sales per customer but typically result in an overall decline in net sales volumes.
Hope this helps.
Because of the lack of competition, a monopolist “can” charge a higher price than in a more competitive market, making super normal profit.
In this case, the monopolist sat on his laurel and most likely let his place run down because no one, until you, contested the marketplace.
If the monopolist has no mortgage, then lowering price may be an effective strategy because this guy would have more staying power than you do.
You also have to consider the marketplace.
Alma and other small towns in this part of Georgia are not strong carwash markets.
For example, per capita income for the area is less than 1/2 the national average. This implies that a large portion of the population live below the poverty line.
Historically, folks living below the poverty line aren’t the most loyal of carwash customers.
Experience shows price increases tend to raise average sales per customer but typically result in an overall decline in net sales volumes.
Hope this helps.
I live in Atlanta and am very familiar with the Georgia market. While the economy in the Alma area and other parts of south Georgia is still basically rural there are some very successful washes down there. There aren't many new builds but there are some that are in really good shape with relatively low mortgages that do fairly well. People will travel more than the average distance to go to a wash they like and pass several on the way. It seems like there is not middle ground down there. Either the wash is nice and well maintained which appeals to quite a few people or is a real dog that appeals to those that "just want to get the mud off".
cwguy.com
The Eric
I really don't understand this though.... the price is always the same? So except for the cheap people like stated. These is no real advantage between going to.... for example a quarter start and a $4 start? You are putting in the same money in for the same time? I guess it is just perceived value or deal?
His wash is now 50 cents for 4 minutes. Big sign by the road and permanent sticker on the meter. He let me know when I first started remodeling the wash I bought that his wash was payed for. Mine is paid for as well. He does not know that, though. My wash is decked out with all the bells and whistles. I can accept cash, coins, or credit/debit. I use different chemicals for each option with different colors and smells. His chemicals are all the same color and you don't notice any smell when you are using it. Im hoping that people will realize what they are paying for. If so, I don't think that I will have a problem.
MEP001
Well-known member
It's not about just the start-up price. If someone uses a quarter-to-start wash and they only get 20 seconds of time and no soap, they aren't going to be satisfied with their purchase. If they go to another wash, spend $4 and get 5 minutes 20 seconds and lots of soap, they'll come back to the higher-priced wash if that perceived value is better. And sometimes the price isn't always the same. As I mentioned above, I set timers to give more time than the competitors so regardless of the higher start-up price, the actual value is greater. So we get the $15-20 washers, they get the $1 rinsers.
cwguy.com
The Eric
MEP001
Well-known member
I'm sure you know that you can change both the time per coin and the start-up time even with the most basic timers.Okay.... That is totally different.I believe usually the coins to start is just dropped.
I never said or implied anything like that. He was there first. We're far enough away from him to capture a different market. I know for a fact that customers are driving past TWO of his washes to use ours, and that's his fault. On the same note, I never tried to operate to put him or anyone else out of business. I just do what I feel is right to get the business by being the best I know how. If he closed and bulldozed his washes tomorrow, I wouldn't do anything different.Your talking about he is totally trying to put you out of business. Got it!
If they noticed there was no savings, I'm sure a lot fewer would be using his washes.
cwguy.com
The Eric
I was actually referring to Almaprowash.... but it really doesn't matter. Seems like in Almaprowash's situation his competitor is trying to drive him out of town. Also, yes I know that you can adjust both on the timer....
I think usually the nicer maintained, better lit and better chemical presentation for the money wins. Having an auto probably helps also? But if one carwash is free and the other isn't? It is like Almaprowash should almost talk to him? But he won't believe Almaprowash anyway. Maybe Almaprowash can purchase the place in a year or less? That sounds like the best plan? How much does he want for his carwash is it for sale?
I think usually the nicer maintained, better lit and better chemical presentation for the money wins. Having an auto probably helps also? But if one carwash is free and the other isn't? It is like Almaprowash should almost talk to him? But he won't believe Almaprowash anyway. Maybe Almaprowash can purchase the place in a year or less? That sounds like the best plan? How much does he want for his carwash is it for sale?
cantbreak80
Maybe I need new clubs
At 50c/4minutes I would need 40,000 customers just to pay my property taxes! That's 3,333 four minute cycles per month.
The best way to make a small fortune at 50c/4minutes is to start with a very large fortune.
Your competitor is well on his way down the death spiral.
The best way to make a small fortune at 50c/4minutes is to start with a very large fortune.
Your competitor is well on his way down the death spiral.
If you can buy it at a rock bottom price - I would think the value of the land itself would be around that figure - I think the decision would depend on how much would be needed to bring the wash up to your standards and how much that wash would cannibalize your current business as opposed to adding new customers. I have seen it go both ways - knocking it down or fixing it up. It is not an easy, cut and dried decision.
If I could buy it I thought about turning it into storage units. Another person in town told me he wanted around $100,000 for it. I wouldn't give him that for it. Its at the end of town behind a gas station.
