Dollar per minute

[robert roman]

Industry and consumer trends suggest traditional self-serve model is no longer sustainable.

For example, industry wash revenues for wands have dropped 69 percent since 2000. Big loss occurred in 2006/2007 due to gas prices and 2010/2011 due to recession. Industry benchmarks, census data and other sources support this.

Since 2000, benchmarks for wand price per minute increased by annual average rate of 3.5 percent while sales volumes decreased by 2.0 percent annually. Similarly, in-bay price increased by 4.2 annually while sales volumes decreased by 1.6 percent annually.

To tag numbers on this, wand average revenue increased from $2.50 to $3.60 as sales volume dropped from 30,900 to 22,900 CPY. In-bay average revenue increased from $5.28 to $8.13 as sales volumes dropped from 11,800 to 9,700 CPY.

So, overall, same store sales for self-service have remained relatively stable over the last decade but profitability has declined as operating costs have increased.

So, my question is why do most self-service operators cling to selling minutes instead of re-positioning the business when most evidence shows a significant portion of self-serve customer base is not coming back?

For example, 45 percent of households in Florida (and growing) can no longer afford basic necessities (United Way, Alice Report). Roughly half of this group equates to about 30 percent of the self-serve customer base.

I’ve lived here almost 30 years and have never seen so many dry wand bays. It seems like wands are only busy on Saturday anymore or when the tourists are here.

Since there are other formats proven successful like pay-one-price, flex-serve and express that can be implemented, what is the biggest challenge a self-serve owner faces in re-positioning a store?

Is it a lack of capital, the cost of capital, investment risk, management or marketing skills, some other challenge?

 

[soapy]

In many areas SS bays are still used because the vehicles they wash can not use the newer wash models. Service trucks, tall four wheel drive etc. Many car and LT trucks have switched over to the new car wash models but SS wash bay numbers are still at levels that they were before the decline. Many SS bays operator will eventually shut down and the remaining washes will then be able to raise prices and charge more because they will have a Niche market.

 

[blurdgman]

Good writeup, we experience the same. Are your price rates $1/minute now? We are at $.80/minute and hesitant to raise. We raised from $.75/min t$.80/min a year ago. We keep our start price at $2 it looks good and very few people on CC spend that little. Our average wash sale is between $5 and $6 on CC some people spend $10 to $14. Do you have any advice? I've been thinking of offering 28% more time for a straight $5 start in the end bays e.g. bays 1 and 6. Then I also think that it may not be a bad idea to offer a $5 start with the increased rate for tokens and CC.

Industry and consumer trends suggest traditional self-serve model is no longer sustainable.

For example, industry wash revenues for wands have dropped 69 percent since 2000. Big loss occurred in 2006/2007 due to gas prices and 2010/2011 due to recession. Industry benchmarks, census data and other sources support this.

Since 2000, benchmarks for wand price per minute increased by annual average rate of 3.5 percent while sales volumes decreased by 2.0 percent annually. Similarly, in-bay price increased by 4.2 annually while sales volumes decreased by 1.6 percent annually.

To tag numbers on this, wand average revenue increased from $2.50 to $3.60 as sales volume dropped from 30,900 to 22,900 CPY. In-bay average revenue increased from $5.28 to $8.13 as sales volumes dropped from 11,800 to 9,700 CPY.

So, overall, same store sales for self-service have remained relatively stable over the last decade but profitability has declined as operating costs have increased.

So, my question is why do most self-service operators cling to selling minutes instead of re-positioning the business when most evidence shows a significant portion of self-serve customer base is not coming back?

For example, 45 percent of households in Florida (and growing) can no longer afford basic necessities (United Way, Alice Report). Roughly half of this group equates to about 30 percent of the self-serve customer base.

I’ve lived here almost 30 years and have never seen so many dry wand bays. It seems like wands are only busy on Saturday anymore or when the tourists are here.

Since there are other formats proven successful like pay-one-price, flex-serve and express that can be implemented, what is the biggest challenge a self-serve owner faces in re-positioning a store?

Is it a lack of capital, the cost of capital, investment risk, management or marketing skills, some other challenge?

 

[seattleguy]

I am going to $1 a minute next spring. I already had the stickers printed up.

 

[wash4me]

We are at $1 a minute in the truck bay that has 1500 psi, 5 gpm and hotter water.

 

[Earl Weiss]

Since there are other formats proven successful like pay-one-price, flex-serve and express that can be implemented, what is the biggest challenge a self-serve owner faces in re-positioning a store?

Is it a lack of capital, the cost of capital, investment risk, management or marketing skills, some other challenge?

IMNSHO poay one price is not proven succesful, there are only anecdotal examples. No proof this will be a profitable option. Location physical characteristics may severely impede viability of adding flex / express as will competition.

 

[blurdgman]

IMNSHO poay one price is not proven succesful, there are only anecdotal examples. No proof this will be a profitable option. Location physical characteristics may severely impede viability of adding flex / express as will competition.

I took the number of customers with the total spent on CC from my computer at one location and found the following:
Past month average spent $6.12
Past 3.5 months average spent $5.77
Past whole year average spent $5.32

So I'm already averaging more than $5 per wash overall. Setting a high start would likely decrease my business.
Also, by the numbers above, business by the lower spenders has obviously decreased, especially this month and the past 3.5 months during a time when our business is at it's nearly lowest volume in 30 years. People are spending less and that's the crux of it. Higher prices in my area is scary. This administration has made most everyone poorer.

 

[soapy]

At the WCA show a Canadian operator gave a summary of his wash. It is a large all indoor operation in a 90 x 100 foot building with SS bays. He charges $1.25 per minute based on the total time spent inside the building. You get a time ticket at the entrance and then pay a attendant when you leave. You can access all features of the SS wash and Vacs. If you stay to detail your car you pay for that time. It has been successful for him. Needs the indoor wash partially due to winter weather but it operates the same in the summer.

 

[mmurra]

Both Robert and Earl are correct. Many wash locations do not accommodate POP WAUW concept. We switched our 6+2 to POP WAUW successfully when we recognized the reality Robert articulates above. We currently charge $7 to enter and our operating costs are in line with reported numbers in national surveys for utilities, supplies and parts. We are experiencing significantly higher volumes than prior to the change. We would never go back.

 

[Whale of a Wash]

I suppose not all self serves adopt one price for the same reason all restaurants are not buffets.

 

[BBE]

Both Robert and Earl are correct. Many wash locations do not accommodate POP WAUW concept. We switched our 6+2 to POP WAUW successfully when we recognized the reality Robert articulates above. We currently charge $7 to enter and our operating costs are in line with reported numbers in national surveys for utilities, supplies and parts. We are experiencing significantly higher volumes than prior to the change. We would never go back.

Curious, based on the national averages, how was your location performing BEFORE you switched to WAUW?

 

[blurdgman]

Pardon my ignorance but what is POP WAUW and WAUW.
I guess I'm not with it.

 

[cantbreak80]

Pay One Price
Wash All You Want

 

[robert roman]

Pay-one-price is naming convention for the business model (i.e. express exterior, full-serve).

Wash-all-you-want is part of POP’s competitive strategy like free vacuums are at express exterior (value added).

POP innovation attempts to unlock potential of different market segments.

Perhaps more importantly it changes how revenue is generated at self-serve - selling distinct product/service instead of selling time in increments.

POP creates more manageable cost structure.

POS tie-in also allows for a more effective marketing strategy (i.e. customer loyalty, phone app).

There are lots of advantages.

“Curious, based on the national average….”

Benchmark and census data suggest self-serve same store sales have dropped about 40 percent since 2000.

In practice, I find most under-performing stores have experienced about a 30 percent drop in sales revenues.

On average, the loss in sales is about $70,000, the highest was over $100,000.

Whack $70,000 in half is NOI of $35,000 / 12 / 1.25 = $2,333

$2,333 is equivalent lease payment for capital improvement of around $100,000.

So, POP has high ROI potential.

 

[robert roman]

Please note my original comment was “So, overall, same store sales for self-service have remained relatively stable over the last decade….”

This is wrong, I transposed (dyslexia), same store sales have gone down.

 

[mmurra]

My numbers (25 years of sales records), were similar to what Robert has described above. Since conversion I am at an all time high sales level. But accordingly, my experience may be unique.

 

[Whale of a Wash]

Murra. When you mean unique are you talking, it would be pretty difficult for us to duplicate results or market is unique. My sales have been really good the last 10 years, my biggest obstacle is severe cold, that slows washing. Do you have a website, and if so I would like to see it. How do you implement the Wauw ? I have so many customers that wash 2-3 times per week and spend the min, and afraid they would be lost. Also we have hunting seasons where the bloody and meaty parts trucks spend 15-20$ and I wish it was 5x more to eliminate some of those problems which I fear would be amplified. Also except for gas stations and 3 tunnels in my 2 towns of pop 140 k
I have the only SS washes.

 

[blurdgman]

Pardon my ignorance but what is POP WAUW ?

Both Robert and Earl are correct. Many wash locations do not accommodate POP WAUW concept. We switched our 6+2 to POP WAUW successfully when we recognized the reality Robert articulates above. We currently charge $7 to enter and our operating costs are in line with reported numbers in national surveys for utilities, supplies and parts. We are experiencing significantly higher volumes than prior to the change. We would never go back.

What is the rate or time allowed for the $7 start up. Whayt is POP WAUW????
Thanks

 

[Kevin James]

You guys act like the POP WAUW concept is something new. I first saw it up in Calgary Canada about 25 years ago. It was in large building, when you drove in you got a ticket at the gate, washed and vacuumed all you wanted and paid the cashier when you left. I don’t remember what it cost to use the facility.

 

[blurdgman]

What is the POP WAUW concept. I must be stupid 'cause I've owned 2 -6 bay SS for 30 years and I don't know.
Kindly answer,