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With the influx of new investors that continue to come into the carwash industry, the danger of overcrowding may become more likely in the future.
For example, an operator in a small town of less than 7,000 people recently complained that his market already included 30 wand-bays and five in-bay automatics, and yet he knew of another new investor that was going to be building a new self-service carwash in his market soon.Who's to blame?
What causes a new investor to build too close to a competitor or in a market that is as crowded as the one described above?
It is not the equipment manufacturer or distributor that is getting into the business, and rarely will you find a veteran operator that will consider building a new self-service carwash in a marginal location on an average-quality site.
In most cases, it appears that over-crowding is an issue of stewardship. Otherwise, we would not hear or see situations where a new investor is planning to build a $1 million facility in a town of 50,000 people where there are already 15 established carwashes within several miles of each other.
Is the notion "if I don't sell it to them, then someone else will," enough cause to absolve equipment manufacturers and distributors of their responsibility to be good stewards?
Since independent carwash operators can do little to directly influence the investment strategy of newbies or the selling behavior of equipment distributors, it appears that it will remain incumbent of the operator to protect their own turf.Cookie-cutter concept
With the exception of see-through or themed buildings, most self-service carwashes look like they were built with the same cookie-cutter.
Usually this includes an asphalt pad, colorful canopied vacuum islands and a modest shell with several stalls where the carwash operator basically rents space and sells chemicals, energy and water so that consumers can clean their own vehicles.
This business model is relatively easy to manage and relatively inexpensive to build as compared to other types of carwashes.
Unfortunately, it may be this easiness that leads the level of investment to the point where markets become overcrowded with competing carwashes.
Would folks who are only looking for an easy income or hands-off business still be attracted to a self-service carwash if the competitive bar was raised?Raising the bar
Let's consider how attractive it would be for an absentee owner to build too close to a competing self-service carwash if the competitor offered things like:
- An express detailing program or detail shop;
- Customer care center with a waiting area and bathrooms;
- Beverages, snacks and an assortment of common car-care items like windshield washer fluid, motor oil, fuel additives, fuses, etc.;
- A full-time attendant or site manager that is customer service oriented and knowledgeable;
- Back-lit vacuum canopies that shade customers from the elements;
- The tasteful use of landscaping instead of a barren lot; and
- An ATM or other type of drive-thru service.
In the final analysis, the only benefits of overcrowded carwash markets are increased equipment sales followed by diluted share, diminished value and downward pressure on price.
Since it seems to be getting increasingly difficult for some equipment distributors to say "no" to the well-financed investor with an average quality site in a crowded market, perhaps it is time for self-service carwash operators to consider breaking the old paradigm.
By adopting some of the total service concepts used by flexible service carwashes, self-service carwash operators might stand a better chance of increasing their utilization rate and protecting their turf from being overly exploited by ill advised and misinformed investors.
Robert Roman is a former carwash, express lube and detail shop operator and is president of RJR Enterprises (www.carwashplan.com), a leading consultant to the carwash industry. Bob is a member of International Carwash Association and PC&D's Honorary Advisory Board. Bob can be contacted at email@example.com.