More express failures at $3 or $5?

This is a loaded question. Because the $5 operators will probably say $3 and the $3 operators will say $5. But, what's the general opinion?

Maybe a better question would be: How many express failures have there been in the last 4 years, where the developer was a seasoned operator (regardless of the base price)?

Good question. I personally think $3.00 is to small but sometimes you have to jump on the bandwagon. As the volume goes up a 1 dollar bump on a 150k cars a year could be a nice rise. Say average ticket is

3,5,7,10 raise it to 4,6,8,10
5.40 vs 6.40 Throw in a theorized 15% drop in volume.

So just for numbers sake gross=

5.40 x 150,000 = $810,000.00
6.40 X 127,500 = $816,000.00

electricity savings , chemical savings
etc

Just a thought.

volume is not always king. Volume is only king if you can not make a profit at lower volume and higher profit margins. Lower volume, higher profit , cleaner car , happy customer. Life needs balance.

Most of the Exterior Express Car Washes that I have seen that are suffering have been the $5 variety! I have not seen a $3 in trouble yet, but I am sure they are out there. Almost all of the poor proforming washes are investor owned, absentee owners.
Even the most staunch anti $3 wash advocate admits to starting out their Exterior Express at $3 and after 2+
years increasing to a one price fits all.
Quoting Benny Alford, "Cheaper, Better, Faster", Although I prefer "Better, Faster, Cheaper".
People have always told me that it is better to raise prices than lower them.

Jimmy

Well, we didn't exactly start an Express Exterior at $3.00. We converted from full service to exterior only and the $3.00 price only lasted one year when we went to $4 then to the flat $5 the next year.

We are currently at $9 and going to $10. Every customer get the Works and the only upsell service is teh Rain-X ($2.00) Although, we do have a monthly club plan for $40 (going to $50), 5 wash books for $35 (going to $40) and a frequent washer card (buy 10 at full price get the 11th free). We also hand out moist disposable towels, litter bags, seasonal newsletters, manually prep the hardest to reach areas and/or for special conditions to ensure customer, and guarantee their satisfaction.

Bottom line, its a matter of preference. I simply prefer not to have to depend on hammering away on customers or pestering employees to get them to upgrade/upsell. We simply take the approach of giveing every customer our best effort (save Rain-X) every time they wash. To me its about being the best, not the cheapest.

Yes, our wash volume has decreased by 19% from our second year when we washed 105,000 to this past year when we washed 86,000. However, our revenue is also up 110% over that second year as well. I'll take that trade any day.

Bill, are there any locations in the Cleveland area that are still offering a low cost exterior?

And are you all lambscloth with high pressure or do you have some cloth on the rockers, etc?

I have to say a word about the competitive level of washing in the SE for my friends in the Central States and NE to understand what our issues are down here.

The last 3 years has proven to be the largest growth of SE conveyor car washing in history. This region went about 10 yo 15 yrs with almost no conveyor growth but tons of ss/iba growth. Now that has flipped, most markets have double and approaching triple the number of conveyors in them. Blanding Blvd in J'ville, Fl...in a 7 mile stretch on one hwy there are now 8 conveyors. B'ham, Atl...many cities are now wall to wall conveyors. 5 years ago we had 3 conveyors in my 150k market...there are 6 now and someone is looking at building a new site as I speak. There are not enough people to keep these sites busy. The only other regions where I believe from all my travels, is more saturated is in some cities of Arizona, maybe some in Calif, and Portland, OR. I would put my 1 conveyor per 25k population saturation level against anybody. It's gotten tough and it's going to get tougher. I believe there are more conveyors, per capita, in the SE than any where else.

IE: Pensacola, pop 350k, 7 conveyors today, signs are now up for 4 more.

Just call P Fazio, someone from MacNeil or Tommy's and see if they don't confirm my opinion.

So, I would love to have an exterior with a base of $7 or $8...put I can't at this time.

We are hybrid - touchless first, Lammscloth wash and Lammscloth polish section following that. We've been using the Lammscloth for 10+ years now and to borrow a tag line, "I'd rather fight than switch "

As for the oversaturation of conveyor washes in many areas in the Southeast now, that is indeed a problem. But I can't for he life of me understand why, when IBAs which can't hold a candle to the quality of a tunnel wash, are charging $6-10 yet everyone has jumped on the $3.00 bandwagon. If that is your market you would have to do something different or provide a substantially higher level of service to get your prices up. I know that not everyone in Michigan is washing cars for $2.00 anymore, even the king of that format has gone up to $3 and is trying to get other operators to go up to $4 and is finding little receptiveness.

Again let me ask the question. Don't you get tired to pressuring your greeter to sell, sell, sell? Don't you get tired of paying commissions to your greeters? Don't your customers get tired of constantly being pressured to upgrade, upgrade, uprgrade? Why not take the fresh approach of reducing your options to two or even one wash say for your average per car and give them everything. Stop the games, the selling, eliminate the time it takes. Survey your customers. Its not hard to do. Develop a survey, hand it to your customers and offer them something for free like a Rain-X when they return it to you. I think you would be surprised and it could simplify and streamline your operation.

Chiefs

I currently have my prices at 6, 8, 10 and 12 And am doing well with these numbers, however the only reason I feel I have sucess with these numbers is #1 I am the only car wash in the area (there is one other but very run down, heard he does no more then 50 cars a day) #2 Being the only other wash in town our customers expect more out of us, especially towel drying (no matter how dry the blowers make the cars! )

When we took over the wash almost a year ago, the prices were 5, 7 and 9 we waited a month. Cleaned up the wash, new landscaping, and some other things to make the wash look really fresh! Kept some employees and dumbed the slugs. We raised the prices after that first month and our volume has continued to raise. And sales are about $9.50 - $10

But looking around the areas in California I have been I don't see very many if any $3.00 washes! the cheapest I have seen is $5, there are a lot of full services here in California that are charging as high as $15 for an exterior and that is just a wash, no extras.

There is one Express I can think of that is a free vac and I believe he was a $4 now $5 or $6 and that is Kellys Express Car Wash.

Basically I am just giving some info. on the California market. As I know it, I feel that the prices must be set due to competition and the saturation of conveyors in your area. I would love to build an express in some of the areas in California where there are only FS washes with $15 exteriors! Im sure in those markets a $9 or $10 express would do great! and a $3 would do even better!

About the lambs cloth does it still shed ?

Jim sadly quite a lot of people are getting sold hopes, dreams and basically IRON. Ive seen a conveyor and a dual Autec with the glass buildings in my area who arelosing there tail. Super bad locations. Another one that really makes me go WOW who sold him that IRON, Are these 3 MINI Full service car wash`s with a lube center on like a 1/2 acre each. Plain stupid I say. Ive watched one of them closed shop for good. First person who builds a FLEX-SERVE on the Highway next to another will be the first to put another one of them out of business. I actually feel bad for them. I seen an ad in the paper where they were trying to sell it for like a million bucks. I wonder if he tells potential buyers he keeps getting hit with fines by the Department of environmental quality every quarter( I read the DEQ report quartly ). There is another guy who built a 4/1 right down the street from about 18 self serve bays. He wonders why his numbers are not as high as the distributor said... That is just the ones I know about. For company`s in the self serve business if I was them I would build a mini tunnel quick. This is why I like those mini tunnels from Sonny`s. It is the exact thing I would put at a self serve because not only is it cheap but it could stem off potential builders.

Just me blabbering..

I thought the discussion was about which failed more, $3 or $5. Someone once said that more businesses die of indigestion than starvation. This could be true in the car wash industry.

Jimmy

I agree Jimmy...I don't think anyone can put anyone else out of business, we do that to ourselves. What competition does is make us work harder for less profit, making profitable locations into break evens and break even locations into losers. Which makes it more difficult to expand, up grade, etc.
I have one conveyor location that's faced every form of competition there is and survived for 53 years. We have made a lot of changes there...trying to improve service or attract different clientile. With only a 13k traffic count and the local rescue mission next door, the site should have died years ago. There has been many years we have reinvested more than we profited. It's still profitable today but only because it's debt free.

My other locations(with more traffic/volume) make me feel like a "great operator", even though all the good things I've learned about this business have been acquired in struggling to keep the "old one" profitable.

Back to the question: (my opinion)

In the SE more $5 washes are struggling than $3.
Do you agree?

If so, why?
1)Could that be because almost all the $3's are attempted by seasoned operators and the newbies tend to all go for $5?

2)Or is it that the volume helps more often than the low $/car hurts?

3)Most of the $5 washes that are suffering have been built too close to each other. I think the $5 base encourages more competition because it makes more sense, margin wise. So newbies tend to build them too close to each other. $5 washes promote close competetion?

4)Or maybe it's just the fact that there are more $5 expresses out there and it's the law of averages?

The circle of express operators I talk to believe: we are taking business back from the IBA and SS. The nearest of those to a new express are often crushed because of the low price and free vacuums. Locations farther away are less effected and so are full serves over 3 mi away. The biggest portion of the SE express volume comes from those that wash once a year and those that use to wash once a month becoming weekly washers. In other words, more penetration into the consumer market place(never washers/driveway washers) and more frequency from existing customers.

Your points on simplification and packaging services are good and well explained. If the building frenzy ever slows down, I might try some of that.

Well price depends on the local area. I think it comes down to people building on top of each other. Price does matter but competition matters even more. Every area has o so big a pie and if everyone is taking a slice someone has to end up with the thin slice.

Is it only the price of the wash that drives the customer or are there other factors involved? Is the overall quality of the wash in play or does it come down to the "What do you expect" mentality?

My question is "What feature(s) motivates the customer to go to one site vs. another?" If there are two $3 car washes within a spit and throw from each other what will make one more successful than the other?

Stuart

Jimmy B is correct. Car washing depends on volume. If you are a full service with a $high or an express with a $low, with out the volume both will fail. We feel that once you establish your customer base, you can tweak the pricing. That means you can not build on top of one another!!!!
BUT, if you have to start at the top end of the pricing range,
it will be more difficult to establish the volume, and one becomes a "catch 22" problem.

Jimmy