There is a Scrub-a-Dub conveyor belt car wash I sometimes use. The basic car wash is $3.79 and includes an air dry. It’s open 12 hours per day.
I’m wondering if that’s a loss leader. They try to up-sell you but not very hard. The place also has an attendant who has to at least be making minimum wage.
If you consider 20 cars per hour max, plus the attendants pay, plus all the other expenses, I don’t see how the place could make a worthwhile profit if everyone took the basic wash. I can assure you this place is not doing 20 cars an hour on most days.
I assume they make their real money from all the people that have that extra gobbledygook put on.
So if everyone took just the base wash would places like this have to raise it’s price?
The automated car washes near me are at mini-marts and there is no full time attendant. They hawk the car wash at the gas pump, you get a buck or two off if you buy enough gasoline. the low end wash with no air dry is $6.00 though. With little fixed cost it doesn’t seem that hard for them to break even but it does seem to be mostly an attraction to sell gasoline highly marked up mini-mart stuff.
But that’s not what’s going on at this Scrub-a-Dub. There is no store and they do have an attendant. And some days they have almost zero cars going through (I go past this place several times a day almost every day stretched over 8 hours. It’s in the area I am a LEO). I’m thinking that base wash almost has to be a loss leader (it’s the only one mentioned on the sign out front).
If they do, let’s say, 100 cars a day, that’s about $4000. If they have 4 people working at any given time at $10/hour, that’s $480 in labor. Even if we say labor is $1000 and overhead, cost of goods sold, water, soap, maintenance adds another $1000, they still have a bottom line of $2000 per day. Add in another $1000/day in other random costs and that’s still a bottom line of $1000 or a 33% markup (or 25% profit margin).
And that’s based on the ‘cost’ being inclusive of all costs. Typically markup is just based on the actual COGS. In this case it would just be the cost of the stuff they sprayed on your car.
In any case, 33% starts to get low, but it’s not at all unheard of.
And of course, these numbers are based on no one taking the up sells and me making up just about everything.
I understood that. I can’t see how they could profit on $3.79 a wash, even with 20 cars an hour. That would be a rare high rate around me.
There is a hand wash place near by. Washes start at something like $16.00 and go up to around $75 with interior detailing. That place is a gold mine because they’re so rare around here now they draw customers from a wide area. I see state and local police cars there often, do you think there could be a rule about them using automated washes? Maybe causing problem with the emergency lights and siren?
Just as a side note, people sell gas to get you to come into the store. Someone I know owns a BP, a Shell and one other gas station. IIRC he said after what he pays for gas and the tax on gas, he only makes something like 10 cents on a gallon. He sells gas so people come in and buy candy and coffee and soda, that’s where the money is.
Are there regular places around? I don’t know about you, but by me cops make a point of going to local business. They make good connections with the owners and employees, it looks good to the community and it helps to make their presence known. Just based on that, they may be using that car wash where people can see their squads rather than sitting in a tunnel for 2 minutes. Or, they just like how good of a job that place does on their cars.
Ya know, as soon as I those numbers, in my quote, in your post, I caught that.
I guessI could fudge all the numbers differently so it still works. But if they’re bringing in $400 per day and subtract out the labor, that’s breaking even right there. All the extras would really have to pay the rest of the bills. As PK said, Scrub-a-Dub really doesn’t shove them down your throat.
I’m going to have to rethink this.
It should be noted that Scrub-a-dub is usually (always?) attached to a quick lube place. It’s possible the oil change profit helps support the car wash while the car wash helps attract customers to get their oil changed.
In any case, I’m going to have to rethink what I said earlier and poke around online to see what the average amount of cars that go through a car wash in a day/week/year is.
And before someone else makes the joke, it could just be meth money.
Because everyone doesn’t take the basic wash. Those gobbledygook addons only add a few cents of cost per wash, but they up charge you a few bucks for them.
This is a breakdown I found for the actual component costs of these things.
Labor will of course be almost nothing for an automated wash which is part of a gas station.
Supporting a local business may be part or all of it. I’ve seen police cars from other towns there, but those towns don’t have any hand-wash places. There used to be more in the area but this is the one that endured. The next one I know of that has been open for a while is way down in the southern part of the state. Here in RI it might as well be on the moon.
Lets say you wash 100 cars a day at $7.00. Lets also say that you have some ill gotten gains and need to launder the money. Instead of taking the $700 to the bank you take $2100 and deposit it, and pay taxes on it at the end of the year etc. Assuming that you are smart enough to vary the figures enough an allow for slow days, you could still end up with over $400,000 a year in clean money. Who is going to raise any flags? The bank is happy. For all they know, you have multiple facilities and the numbers aren’t alarming. The IRS is happy since you pay your taxes on time. Hopefully, your customers are happy. The only flaw is that it wold be trivially easy to monitor the actual number of washes if anyone got suspicious for any reason. I’m sure almost all car washes are legitimate. I’m jut sayin’.
Since this isn’t about money laundering, I’m not sure what this has to do with anything. However, virtually anyone that has anything to do with your money knows how many locations you have. If someone ever pokes at your books, they’ll likely know that something is up when they see you depositing 3 times as much money as similar businesses and having and having a profit margin that makes no sense for similar business. In fact, during audits, they’ll specifically look at profit margins. They know about what it should be for your industry. If yours is extremely high, they’ll be curious as to if you’re laundering money, if it’s low, they’ll think your stealing money. There’s ways around that but ‘uh, we have 3 locations’ isn’t one of them.
If it’s anything like the car washes I’ve used, the lowest tier may be $3.79, but there are important-sounding upgrades (foaming shampoo, undercarriage wash, wheel wash, etc) that quickly add up to $10 or more.
I read over that site. It took the some of the main costs and averaged them somewhere between a busy day and a slow day and came up with about $1.99/car for the cost. That number also includes detergent, which they said goes from .45 to 1.20 depending on the level of service you get and called it 64 cents per car across a day.
With the $1.99 figure in mind, they’re about doubling. Probably higher since the high end of their detergent cost is $1.20, but they may sell that service for $5-$15 more. In other words a $3.79 wash cost them $1.80, while a $15 wash might be in the area of $2.50-$3.00. Closer to 5x.
They also mention that labor costs about $2.24 per car, but I’m not sure where that number comes from since labor (as they stated in the article) doesn’t change much between a slow day and a busy day.
So, yeah, on first glance it appears the numbers work, but even at a high markup, the owner isn’t exactly rolling in dough at the end of the year. My WAG says the owner takes home, before taxes, about $100-$200k per year, per location.
Nothing to sneeze at, but I’m sure it’s also a lot of work.
In the city where I work, a local (non-chain) car wash has a contract with the city to wash police cars and other city cars. One officer had his car washed at the beginning of every shift. They even named a certain combo of options after him: The Shondell Special.
But that’s my point: What if they did. Would this business be viable selling every wash @ $3.79?
As I mention before, they don’t do the hard sell at all for the extras. They ask you if you want to upgrade, you say no and that’s the end of it. I could see if they lured people in with the cheap car wash sign and then really laid it on for the extras, but they don’t.
We do take squads through it on contact and only get the base wash. I’ll only take my old Jeep through it and only take the basic wash. I will not take my newer vehicles through anything except brushless washes.
Hypothetically, pkbites, what if you sat in your squad car for a day and just watched cars going in and out. Then checked with local records to see what taxes the place paid or some other way to calculate their reported profit. Say you work it out and it is more likely than not the place is a front for some crime.
Now what? Who do you report it to? Will anything be done if no one complains?