T is price - cost of material. If in-bay price is $7 and 8% cost ($0.56), T = $6.44 (7 – 0.56)
Add hot wax (cost $1.25) for extra $3. T = ($10) - ($0.56 + $1.25) = $8.19
$8.19 - $6.44 = $1.75 (opportunity of not selling). Apply to system and 20% of buy wax (typical).
T w/o wax = (15,000 * 7) – (15,000 * 0.56) = $96,600
T with = (12,000 * 7 + 3,000 * 10) – [(12,000 * 0.56) + (3,000 * 1.81)] = $101,850
$114,000 / 15,000 = $7.60 average with wax versus $7 without or extra $0.60/car. If you charged $4 extra, increase is $0.80/car.
Wand disadvantage is selling minutes (applesauce) versus in-bay selling discrete units (apples).
A wash is designed to handle peak so it can achieve potential. Reason is most money comes during busiest days of week and hour of day.
If average wand use = 10-min (8-min wand, 2-min other) = 6 cars/hour (CPH) or 5 wands = 30 CPH.
25,000 cars/year (CPY) = peak-hour 4 CPH/bay times 10-min = 40-min or availability of 20-min/bay.
Wand can make more money via higher price, more discrete visitors (attraction) and/or existing customers buying more (
loyalty). Latter two consume available time remaining/wand.
It’s difficult for seasoned wash to increase counts without lowering price significantly or offering greater value added than other washes.
If you sell wash for $0.45, cost is $0.02, profit = $0.43; add $0.03 wax and don’t raise price, profit = $0.40
Since wand does not bill discretely, you hope for very high percent of customers to use wax and constraint = available time in bay.
Arguably, workable approaches are JBN concept (bill separately at higher rate), pay-one-price (discrete billing) or add wax and raise price/minute (across the board).