How do they make money?

[OCD Detailing]

We started our business about 10 months ago. It's been growing at a decent rate due to referrals. A semi regular client of ours referred his friend to us. He just happens to own a mortgage company so I inquired about doing his employees cars on Fridays. He said they have a guy on Thursdays but he isn't happy with the job they do so wants us. I had my business partner go by there on a Thursday to do a little spy work. They use 4 or 5 guys and charge 20$. We charge 40$ to 50$ when we go to a clients house but for businesses we will go to 25$ if we have enough cars to stay there most of the day. My question is, how the heck do they make money? They can make up for the low price and paying that many people based on volume?

Also he wants us to do it for 20$ as well. Said he isn't sure his employees would be willing to pay more. I'm trying to get him to 25$. Went over everything that makes us different from the place he is using now.

As a side note, has anybody ever ran into some "drama" taking jobs from other places? This is like the 4th place recently that has called us out because they weren't happy with their current guys. Wondering if there is ever "hard feelings" if they happen to come by when we are there. From what I understand they will still be coming out on Thursdays to do the other offices in the complex. Although my goal is to get those people as well.

[Jaretr1]

I cant comment on the drama, but this is a case of current vendor not satisfying their customers. If you can do the job better and earn the business,then you deserve it. As far as lowering your price to $20? Thats a decision you have to make. I would say dont do it. They want better quality, then they should be willing to pay a little more. I say stick with your pricing, do not discount yourself or your quality.

[MattPersman]

Let them keep paying $20 for work they don't like... tell them it's $25 and you will be happier and that extra 5 is a better job.


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[Audios S6]

You could offer them a 3 month promotional rate at $20 with an increase to $25 at the end; if it's weekly, you're losing $60 per car over that time which is no doubt a hit, but if there is a lot of potential at the business park, then it may be worth taking the hit on the front end.

They can make money by underpaying employees and doing more harm than good when washing, but I'm sure you already realize that. If it's like what I see at dealerships here, they are driving by with a truck mount pressure washer then just drying off the dirty cars.

I'm sure they've done enough harm to the cars that you can probably get a couple people to bite on a paint correction and make back some of your $60/car loss on the promotional rate.

[g35_coupe]

You may be seeing the tip of the iceberg of the customer that wants-everything-for- nothing so use it as your warning. If you're providing extra services from the last guy, you could haggle a little bit and just do a better job of the same service the previous company was doing. That way you can keep him at his price. Hope that makes sense.

[OCD Detailing]

Thank you everybody. I don't plan on lowering our price UNLESS I see there will be a future benifit. I sent him an email explaining the difference between a "quickie" wash and a proper wash. Went over the damage to the paint that can occurs as well as how much more we do when we clean the car.

My only thought if they won't go to 25$ is to let him know we can do 20$ for a few weeks and see how it works out. If tips are enough to make up for the difference it won't be so bad. (Not telling him that part) but after two weeks if we can't justify it we tell him so and hope his satisfaction with the job we do is enough to not want us to leave.

It's a big office complex. More than his place. So there is an opportunity to get other people that have been using the Thursday guys.

We have 3 days filled with washes including this one. Our goal is to fill the week with weekly washes then hire a couple of guys to take over the washes and my partner and I get a shop and do the details there. Hiring it out scares me a little because we have built a reputation of doing a great job. We are going to have to train and maybe offer incentives for them to keep up our expected standards.

BTW what is a fair wage? At 25 a car there isn't a lot of room to pay two people and make a profit. My thought was they earn half the revenue for the day. That would be 1/4 each with bonus for getting people to the shop for details. They would also keep the tips.

Thank you

[70fastback]

http://www.autogeekonline.net/forum/how-make-money-detailing-cars/88545-1-tip-if-you-could-start-all-over.html

Scroll down to reply #6. I agree with this!!! If you lower your price to theirs, are you going to do a "quickie wash" or a proper wash? Don't lower your standards and charge a fair price...If it doesn't work out, move on. You need to educate the customer as to why you are going to charge more! Best of luck!

[Rmd]

Mortgage company is the first clue. Hustlers by nature. It's all fast and loose, quick buck. Probably not the kind of people who will appreciate quality work for a premium price. Maybe other people in the complex might appreciate the services you can provide.

[Ccrew]

I can't get a car wash in a drive through swirl machine in these parts for $20, $25 is still a bargain.

[custmsprty]

There's a nice mall by me, these guys have been poaching it for years, they set up in the garage in the shade, $10.00 wash and detail, go figure!!

My advice is to cater to the market that will understand you're value proposition. I've been in commissioned sales for 25 years, I don't win em all and they aren't all educable. If they don't get it, they won't ever get it. Whether it's a $10K or $100K car, if they don't value it you may not be able to get them to drink the cool aid.

It does amaze me how someone will buy a mid level BMW for $40K or so and not spend a few hundred dollars a year to keep it looking nice and then get hit with a mega service bill. Not picking on BMW, just an example. My neighbor spent $1200 getting a headlight replaced, he has seen my work on my cars, won't spend $250 to have his car done. A year ago he had 3 transients in his driveway working on his car, I asked him what they did, he said they repaired some chips in the paint. I asked how much he paid them? $400!!!! They didn't even wash or wax the car, go figure that one. What they did was hang out in his driveway for three hours. I wrote him off, he doesn't get it, he'll never get it.

I emailed him this picture of a 535i I did after his paint repair(same color too) he didn't respond, wonder why, maybe because I did this for $250 and he paid $400 and his car looks 7 years old like it is. Anyhow, that's just the way it is. 99 percent of the average population has know clue what a real detail is nor do they really care.

http://i1075.photobucket.com/albums/w421/custmsprty/535i_zpsou5rfjvd.jpg (http://s1075.photobucket.com/user/custmsprty/media/535i_zpsou5rfjvd.jpg.html)

http://i1075.photobucket.com/albums/w421/custmsprty/535i4_zpsjubodtim.jpg (http://s1075.photobucket.com/user/custmsprty/media/535i4_zpsjubodtim.jpg.html)

[dcjredline]

I would guess that you should be closer to $30 in reality. I don't think you should lower your price from $40-50 to $20-$25. Your quality/time is worth more than that. Things wont go well (normally) in a situation like this for the person chopping their prices and still doing good work.

[custmsprty]

Once you lower you're price you will have to fight to raise it, especially in the service industry. Stand by your guns. If $5.00 means that much to them you don't need the business.

QUALITY, SERVICE AND VALUE.

[custmsprty]

Mortgage company is the first clue. Hustlers by nature. It's all fast and loose, quick buck. Probably not the kind of people who will appreciate quality work for a premium price. Maybe other people in the complex might appreciate the services you can provide.

No doubt, all the while making big $$$$$. It's an ego thing to beat you down. I missed the mtg thing.

[Rod73]

There's a nice mall by me, these guys have been poaching it for years, they set up in the garage in the shade, $10.00 wash and detail, go figure!!

My advice is to cater to the market that will understand you're value proposition. I've been in commissioned sales for 25 years, I don't win em all and they aren't all educable. If they don't get it, they won't ever get it. Whether it's a $10K or $100K car, if they don't value it you may not be able to get them to drink the cool aid.

It does amaze me how someone will buy a mid level BMW for $40K or so and not spend a few hundred dollars a year to keep it looking nice and then get hit with a mega service bill. Not picking on BMW, just an example. My neighbor spent $1200 getting a headlight replaced, he has seen my work on my cars, won't spend $250 to have his car done. A year ago he had 3 transients in his driveway working on his car, I asked him what they did, he said they repaired some chips in the paint. I asked how much he paid them? $400!!!! They didn't even wash or wax the car, go figure that one. What they did was hang out in his driveway for three hours. I wrote him off, he doesn't get it, he'll never get it.

I emailed him this picture of a 535i I did after his paint repair(same color too) he didn't respond, wonder why, maybe because I did this for $250 and he paid $400 and his car looks 7 years old like it is. Anyhow, that's just the way it is. 99 percent of the average population has know clue what a real detail is nor do they really care.

http://i1075.photobucket.com/albums/w421/custmsprty/535i_zpsou5rfjvd.jpg (http://s1075.photobucket.com/user/custmsprty/media/535i_zpsou5rfjvd.jpg.html)

http://i1075.photobucket.com/albums/w421/custmsprty/535i4_zpsjubodtim.jpg (http://s1075.photobucket.com/user/custmsprty/media/535i4_zpsjubodtim.jpg.html)
So freaking true! And not just in car but to some extent in general with people there's a lot of irony.

Where I work (my main job) part of my job is sell volume pizzas late night to downtown customers at a discount price to people out on the town. $7 for a cheese and $8 for a pepperoni. Because a major chain sells it's pizza ready to go at $5 I get customers who get offended by our price. Nevermind I'm right there for there for convience, or our pizza is larger, or the quality is dramatically better all a lot of these people will see is the lowest price and anything higher is a con job ignoring all of the logical reasoning you throw at them. BTW some of these same customers will come into after posturing to find out they have to now pay the full price $11.65 feeling pretty dumb.

[Rod73]

Oh btw that car looks amazing. Love those dark grey cars when they are detailed right. I have a silver Altima so when I one it's like my sister car color lol