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Writing in opposition of the $3 carwash concept

November 28, 2005
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Writing in opposition of the $3 carwash concept
Michael George

I know some people who are successfully doing a $3 discount carwash, but I don't think they're doing it that well. Unless you're a company that's been doing it for a long time, or can support it from something like gas, you're missing out on the profit.

It's a great thing to say that you wash 15,000 to 20,000 cars a month, but if you're not making any money, then the numbers don't matter.

You can't make up business just with volume, because all you do is end up losing more money.

Today's cost of doing business

In today's market, with today's cost of doing business, if you get a decent location you're going to spend more than half a million dollars just on land.

Most of these guys who are just investing or are absentee operators, they aren't going to make enough without charging more and being hands on. The numbers just don't work out.

All you're going to do is wear out the equipment by boosting the volume to be so high. You're going to have a high cost of operation as far as equipment goes, as well as high costs for water, sewer, electric and chemicals. And most people don't realize that.

So, instead of charging $6 and washing 8,000 cars a month, now it's washing 16,000 cars a month at $3.

So you're doubling it, but really all you can say is, "wow, I'm washing more cars." It's not making you more money, because you're spending more money on maintenance.

Is it worth the risk?

What happens to many people using a $3 carwash concept is that once they start to lose lots of money, they start to scrimp.

The first thing they scrimp on is chemicals. Then the quality goes down and then maintenance follows, so the quality goes down even further.

So, of course the volume goes down, so it's a vicious cycle.

What I tell my clients is that if you're going to be in the express business, you have to get the car clean, dry and shiny. And it takes more than you'd realize.

You have to put in the right equipment, but to do that you have to charge.

You have to start at least at $5, and that's that cheapest I would go.

Drawing a crowd

I don't think something like free vacuums can be a good enough incentive to bring in customers, because it's not for everybody.

If you're planning on washing 100 cars an hour, you couldn't have enough vac stations for everyone if you're expecting that high a number.

So, 15 percent of your customers get to use your vacuums, well for the others, they'll just get angry.

If you let the customers down, they'll move on to another carwash in the future. And if you're going to spend a million and a half to two million dollars to build a nice site, why give it away?

Price is not the deciding factor for how well a carwash will do. The gas industry proved that when they offered free tunnel washing with a gas purchase.

Many of those sites never keep up on the maintenance that was needed for the carwashes, so they gave up on giving free washes.

People will say that you can draw people with a cheap guarantee, but you'll only draw people from your market.

Most people don't drive across town just for a carwash, they look for something that can put out quality that's in their drive pattern.

People are looking for something that's fast and convenient. Price won't be number one, it'll be number three or four. Convenience is number one.

Quality or perceived value has got to follow. That means, "Did I get what I paid for?"

Michael George has been in carwashing since 1968 and works as a consultant for his business, Auto Wash Services Inc., Chandler, AZ. George is the former operator of Paul's Auto Washes, Jackson, MI.