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Business Operations

Vending the TLC way

October 11, 2010
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I recently read a post about vending on the website www.autocareforum.com that showed the old business model thinking of conventional-drop-shelf-grouping, low-technology, dependent-on-a-bill-changer is still very strong among carwash operators.

Let’s face the facts — the conventional drop shelf vending at carwashes has not contributed a high percentage of a carwash’s gross income or been a high priority investment for operators. A key sales tool in vending is the displaying of the product so the customer can see what they are buying. Drop shelf vendors do not do this and they rely on the bill changer for coins to operate. Changers are usually located in the front of the wash and drop shelf vendors can be anywhere on the wash site.

Customers will not walk very far to get change or buy a vending product. New security designs, video cameras, and the technology now available have superseded this old business model vending station.

The new vending model addresses time, location and convenience (TLC) requirements.

Customer considerations
Time. Customers are always in a hurry to do something or go somewhere. The operator will profit if the vending station is designed to save the customer time and effort.

Location. This is a time-honored principle for carwash site success, but many years of personal experience using, designing, and selling computer-controlled vending machines (formerly described as electronic or glass-front) indicates that the vending station at your wash should be located in the vacuum island area of your wash. This is the only place on your site that your customer can spend un-metered time (usually much longer than the time spent washing) to really look at their vehicle to see what needs to be cleaned more thoroughly.

Convenience. The customer can be stimulated by the visual sight of the vending station to buy products to clean the troubled areas of the vehicle.

Combine to succeed
The new vending model addresses time, location and convenience (TLC) requirements with a vending station that is user- friendly, standalone, computer-controlled, and located near the vacuum island. This station accepts bills, coins, tokens, credit cards, smart keys/cards, or RF devices, so that vending can be highly profitable to the carwash operator. It can be designed to integrate a video camera system and a strong, aesthetically clean, reliable security package for the machine/money-handling into one installation that can survive in the carwash environment.

Operators now have the choice of investing in standalone vending stations that provide from 18-51 carwash selections or the option of a refrigerated vending station that can vend sodas, water, and carwash products. The number of items that can be vended in a computer-controlled vendor is almost limitless with operators having the opportunity to sell anything from token packs to terry cloth towels.

Operators can sell whatever will fit in the vendor. The trend toward a cashless sales system (credit card or RF) for the vending station is approaching quickly, so vandalism or theft should diminish.

In-the-wall vendor installations are usually rear-loaded from the equipment room for cold weather, security and servicing reasons. The new vending model would dictate these installations should be facing the vacuum island area of the wash so customers would be able to see the vending station and quickly purchase vending items. It may not be the optimum location, but security and weather concerns do dictate some decisions.

Statistics
While reading the recently published results of PC&D’s 2007 Self-Serve Survey, some numbers jumped out which seem to provide proof that a properly located vending station can produce significant sales volume.

For instance, the average monthly vending income per site was $454, indicating old model results. Our statistics have proven that customers using the new model with computer-controlled vending located in the vacuum island area can produce almost three times the sales volume per month ($1,187) versus information reported in this survey.

The second number was the average monthly bay gross income of $1,521. What it all computes to is a properly located, secured, and serviced (TLC) vending station can be almost equivalent to the average monthly sales volume of a wash bay. If you look at the investment in property, building, and equipment needed for a wand bay to achieve the $1,521 cited above, the investment necessary in a well designed vending station installation for approximately the same sales volume looks like a real bargain.

Think about what can be achieved if the old conventional model was thrown out and replaced with the new model. Replacement would serve as a way of increasing the wash’s gross sales by adding a “virtual” bay with a smaller investment and achieving vending sales success at the same time.

The same survey reported the gross income of a vacuum was $207 per month.

The average vending income is more than double that of a single vacuum installation. If one looks at the investment in these new vacuums that are now used in the industry, the investment in a vending station that is equivalent to more than two vacuums looks very reasonable.

Self-serve and express exterior sales
There are two carwash business formats that are successful in producing high vending sales volume: self-serve and express conveyor. The most successful is the self-serve wash with a large, spacious, covered vacuum island area that is in close proximity to the wash bays.

The customer usually spends more un-metered time at the vacuum islands detailing the car than washing the car. This time provides the operator with an opportunity for merchandising and marketing of vending products to solve customer’s wants or wishes on the spot. (Think TLC.) The customer’s impulse to clean or detail his car is satisfied if the vending product is nearby and easy to purchase. Now you have a winning combination for vending sales volume that produces big profits.

A runner-up in popularity is the new express conveyor wash with free vacuums as part of its attraction. Again you get the customer spending un-metered time in the vacuum area where the opportunity for customer impulse purchasing pushes vending sales volume.

A successful high volume computer-controlled vending station has not been achieved in full-serve conveyors (usually because they have attended lobbies for their vending sales) and in IBAs where customers are in a hurry to wash the car and drive off. When the IBA is part of a self-serve site, unless the IBA users stop to vacuum or detail their cars in the vacuum island area of the wash, there is little opportunity for impulse vending sales.

The new TLC vending concept and model will give operators and investors some new ideas to study and think about when planning to build or rehab a carwash. Integrating the new model for vending into the overall wash operation will increase the gross dollar volume of the site and enhance the profit margins to make the wash successful.


James H. Holve is the owner of ShurVendPlus Vendors and has been involved in the carwash industry for 18 years. Holve can be reached at: jimholve@big-eagle.com or 1-866-748-7836.

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