A Buck Can Make All the Difference
New owners and independent operators often wonder about car wash pricing, especially in today’s increasingly diverse car wash industry. In many towns you’ll find dated tunnel car washes, automatic in-bay car washes, conveyorized in-bay car washes, gas station combo car washes, and more modern washes, each with very different services, pricing, volume, membership systems, and profitability. So how should you set your prices?
There are a number of variables to consider, so no simple answer will satisfy in every area and market. But here are five hard and fast points to keep in mind as you make an informed decision.
1. What is your Base Price / Wash?
Take the time and do the math to determine EXACTLY how much it costs for you to wash a single car. The more accurate your estimation, the better, so take everything into account including utilities (water/gas/power), chemicals (standard detergents and optional packages), and labor (average volume, busy days, and slow days). Larger washes, like a Totally Tommy Express Tunnel, will have higher operating costs, but the average should be somewhere in the realm of $3.00 for a basic wash. Of course, it is also a good idea to look for ways to decrease this cost by fine-tuning your dispensers and timing. Just make sure you don’t take value away from the customer as you optimize.
2. What is the Price for your Market?
Location is everything, and it’s the single most important consideration when you build your car wash, AND when you set prices. A high income area or an area with lots of disposable spending (grocery centers, shopping destinations, and major crossroads) can support prices of $10 per car, for example, optional packages up to $15 or more. Survey your location to get a feel for other car washes and set your prices accordingly, but with an eye for point #3.
3. Gross Margins
A four dollar car wash may get attention and might even generate volume, but you are cutting your margins down dangerously. Adjusting your prices only one dollar multiplies your profitability PER CAR. If 10,000 cars go through your wash in one month, that $1 increase adds a well-deserved $10,000 of revenue (-taxes). While lowballing can be tempting to generate interest, you shouldn’t undersell yourself out of business—especially with a Totally Tommy System.
4. Remember the Upsell—But Don’t Over-Rely
Express Car Washes have a fantastic upsell potential. In fact, 50-70% of most express wash customers opt for extras, and not just the unlimited club members. So don’t underestimate your car wash’s ability to upsell and don’t be afraid to sell your Works package for what it’s worth. $12-15 is perfectly reasonable. However, that 30-50% of customers who are only opting for the basic package are also extremely important. This number tends to swell during economic downturns and if your basic wash package is too low in order to attract a high volume, and then upsell them, you will miss out on important profitability. You may also unintentionally send the message that you car wash services aren’t worth what they truly are. On the other hand, if your basic package is more in line with your optional packages you’ll find customer jump the price gap easier. For instance, a $4 basic wash will attract customers, sure, but it will be more difficult to upsell them all the way to $15. If your basic wash is $8-10 that upgrade seems easier for customers to bridge—especially with a good number of optionals available.
5. Memberships are Huge
Car wash memberships are a great opportunity for a number of different reasons.
____-They guarantee you a returning customer base.
____-They guarantee monthly recurring sales—even if the customer never uses the wash
____-They get customers used to optional services like tire gloss and car wash
____-They pull the local customer base away from other car wash options in the area
____-They make great gifts, hooking more customers who wouldn’t consider the wash on their own, but who will use a gift card or gift membership
____-They attract customer information for marketing, community updates, and promotions .
For these reasons, memberships should be priced very attractively, and the terms should be written simply and generously. For instance, one popular and successful membership model is for unlimited washes, all services, at 2X the works wash price per car per month. The value is undeniable, and any cost from the extra washes is more than off-set by the large customer base and recurring payments that come with it.
Please note that this post is meant as advice and suggestion only. Your situation will be unique and you should treat it accordingly. Our site development services are of course available to help Tommy customers with every stage of the car wash process, from site selection to construction, installation, training, and supply. If you’d like a pricing consultation for your potential car wash specifically, our sales reps would be happy to consult with you and share more specific pricing models that have worked in the past. They can be reached at Sales@TommyCarWash.com / (616) 494-0411
Tommy Car Wash Systems