Whose Talking
Tour Video of Unique Car Washes
Replies
Hopefully, she won’t have to replace all the jungle stuff very often.
Actually, “The shortsightedness of discount car washing” is more interesting.
You don’t have to do any research to ponder a conclusion as to what happens if the entire car wash market went to a base price of $3.00.
Just look at what happened in coin-op vending or the fast food industry.
Consolidation in retailers as well as equipment manufacturers; lower industry revenues and industrialization of customer service equals less industry employment and less services, fewer choices.
Low price sucks “value-added” out of the system.
Why? Each car wash site has a threshold distance that needs to cover its costs of acquisition and production.
So, the market “range” is the area beyond the threshold distance that includes any customers which contribute directly to the profitability of a wash.
Beyond this range, customers are unwilling to go to the market because of the economical distance to it.
So, if someone in a market drops price to extend the range of their wash, the tendency of others in the same market is to match price to counter the competitive advantage.
If this behavior were extended throughout the entire market, only the lowest cost producers would succeed in the long-run.
Yeah, I saw this video before and first and only thing that popped into my head was the same thing: How the heck she gonna keep those things clean? If there is a good way to keep them clean, then I think she is genius and I'd like to make some themed tunnels too. I want to see some follow up videos to see what it's like now.
-tom


Tom Chung