Filling tanks and making bank
It makes sense that customers would probably like to be able to fill up their gas tanks around the same time they wash their cars. The appeal of one-stop shopping is undeniable and it’s even better when it is done with a common goal in mind: To have the car clean and ready to go.
In addition to the convenience for your regular customers, carwash and gas station combos are also a good way to attract new customer bases. Every car owner needs gasoline; even the ones who ignore the maintenance of their vehicles.
Professional Carwashing & Detailing talked to two operators with firsthand experience who share their tips, tricks and trade secrets below.
Only add on if…
Justin Alford knows about both carwashes and gas stations. He is the co-owner of the Benny’s Car Washes of Baton Rouge, LA. Benny’s has been family-owned and operated since 1951 and has three express exteriors, two full-service carwashes, five Xpress Oil Changes, three convenience stores all with gas stations, and four detail shops.
Alford said he would only add on a gas station to an existing carwash if:
1. He had plenty of room to not affect his existing carwash as more is not always better, he stated; and
2. The gas station has to be able to sell more than 100,000 gallons a month.
Alford said that before even considering opening a gas station, you have to find an oil company or industry expert who can project your monthly volume. “The oil companies are really good at predicting gas sales,” he said.
Earl Weiss is the owner of four carwash locations in the Chicago area, some of which also have gas stations, snack shops and quick lubes. Weiss also advised operators to proceed with caution.
“Consider it carefully,” Weiss said. “The capital cost is quite high and offers little as a separate profit center. It does offer a symbiotic relationship as a traffic builder for the wash.”
The good, the bad and the weather
There are plusses and minuses to selling gasoline. Adding on a gas station can be very expensive and there’s also drilling, safety and land factors that have to be considered. But, Alford noted, a gas station is not as affected by the weather in the same way that carwash is. “Which,” added Alford, “can be helpful during those rainy days when carwash volumes are low.”
Another plus, according to Weiss is it can definitely bring in more customers. “It is a traffic builder for the wash. I have other locations in similar areas. On an annualized basis the locations with gas outperform the ones without gas by a 20 percent higher wash volume.”
He added that on the extremely busy days wash locations that don’t offer gas may have higher wash volumes than those without. “But these are few and far between when compared to marginal weather days when there is much lower volume at locations without gas,” he explained.
A few of the negatives, according to Weiss are:
• The profit margins are low;
• There are various environmental considerations;
• Gasoline hazards;
• You will need additional labor; and
• The capital costs are high.
Also, added Alford, a carwash can help a gas station in that people will come back again and again if they’re happy with how their car was washed. But, he noted, gasoline sales are usually based on price. There is little loyalty when it comes to buying gas, but that can work both ways. If a gas station’s prices are low, then a customer coming there will notice the carwash. However, if a gas station down the road has cheaper gas, then the customer will go there, and you’ll lose a potential carwash sale.
If you’re thinking about adding on gas pumps, or already have them at your wash, Alford advises to make sure they are separate entities. “I want the gas station to stand on its own. It needs to be a good business adventure without the carwash. In the past, most carwashes had gas on the side of the building, and it was just a convenience for the customer. We want it to be a complete separate business,” he said.
As for cross marketing the two, both Alford and Weiss said they don’t offer any sort of discount incentives. “Many people offer a ‘cents a gallon off’ with the purchase of a carwash deal,” said Alford. “We have considered this before, but we sell our gas with low margin and have not tried this promotion yet.”
Alford said that the best marketing for them is done right at the pump. “Everyone is asked if they want to purchase a carwash when they go to pump the gas. We sell about 20 percent of the carwashes at our gas pumps. That is a good number for us.”