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I' planning on starting my own detailing buisness in a small town of 2500 and there is two dealerships that will go in buisness with me. I charge $120.00 for a full detail, how much should I charge per car for the dealerships? They send more cars so I want to give them a fair price. Just looking for other opinions.

Do a search on both your questions

How did you arrive at the $120 price?

Any price you charge for your services has to be based on the hourly rate your business must charge to cover:

What salary you want to make
The benefits you want from the business such as health insurance; vacation; retirement, etc.
Profit, usually 10 to 15% of gross profits
Fixed expenses
Variable expenses

Get a total for the month and divide by the number of hours you have to sell per month and that gives you an hourly rated needed to cover your expenses.

Any job you do you multiply the time to do the job by the shop rate and you have your price.

If you charge less you loose money. If you can charge more, then more power to you.

This formula works for both retail and wholesale (dealer) cars. It does not matter how many cars they bring you a day or week. If it takes 3 hours to do a car and your shop rate is $40 then you have to charge $120 to cover your expenses.

Even if they give you 10 cars a week, if you discount you are loosing money on every car, UNLESS you can reduce the time to do the car.

These are the facts of business. If you say you do not have any expenses then you must not be paying all the expenses a normal business would have.

In any case, it is easy just sit down and calculate your monthly expenses.

Regards
Bud Abraham
DETAIL PLUS SYSTEMS

I arrived at $120.00 for a car by doing research in the area. The standard price is between $150.00 and $200.00 but that is in more populated areas. They don't even hand wax, they run it through a machine that waxes the car for them. Like the WAX BUTLER. Is that better then hand waxing?

On your advice on monthly charges. I'm still putting together a buisness proposal for my investor. So I'll have it done soon.

Any other advice would be very much appreciated. I'm kinda of new on starting a detailing buisness. I worked for one for about four years, awhile back, so I've doing some research to refresh my mind and get a better perspective on really achieving in this buisness.

Again, the research you did based on what is charged in the market is totally irrelevant until you know what is it going to cost you to operate your business.

Once you have those figures then, and only then, can you look at what is being charged in the marketplace.

Either your costs of operation will allow you to charge the same, more if your expenses are less, or less, if you expenses to operate are less.

Your costs of operation are key. If you are dealing with investors what they want to know is "how much am I going to make on my investment?'

That is what we call profit in a business, that is the money left over after all the expenses are paid. Remember the investors are not putting up money to give you a job and get nothing in return, they can put their money in the bank and make some interest.

Regards
Bud Abraham

buda

I you could see what these guys do for $200.00, you would wonder because I do how there buisness is so successful. What I do for $120.00 is a better job and I have proved it many times to customers. Though, they complain about the outrageous prices that detail centers charge.

For the investors, you are right about that. The investor I know is my girlfriends dad that said, "he would do for a very low cost." He said, "it would be so low he probably wouldn't even notice it being there." So I think I found the right investor!!!

Not sure what you are saying about your investor???

As for the prices charged by others and what they do, again that is really not relevant until you know what it costs you to operate your business.

Running a business is not about how you detail the car it is about getting more money in oer day than it costs you to operate. Doing that you make a profit from which your "investor" can take his cut. If you make no profit, then what is in it for him? To invest to give you a job? That does not make sense.

You need to figure out your cost of operation then worry about what you charge and what others charge.

Bud Abraham
DETAIL PLUS SYSTEMS

Investor is his job, money is know thing to him, he could care less if he made a profit from me. He is helping me to start somewhere. Just a nice gesture. Does it make sense now?

I'm just trying to get other opinions. I want to make sure that I do this the right way, I'm trying to workout every step to be successful. I don't like failure and just taking a risk has screwed me to many times. So all the information or help I can get I'll take it. So I appreciate your help very much you seem to be very intellegient about the auto detailing buisness and thank you for taking the time to answer my messages.

Investor is his job, money is know thing to him, he could care less if he made a profit from me. He is helping me to start somewhere. Just a nice gesture. Does it make sense now?

I'm just trying to get other opinions. I want to make sure that I do this the right way, I'm trying to workout every step to be successful. I don't like failure and just taking a risk has screwed me to many times. So all the information or help I can get I'll take it. So I appreciate your help very much you seem to be very intellegient about the auto detailing buisness and thank you for taking the time to answer my messages.

Sorry about the spelling in that last message. I forgot to read again before sending it. I'm a real stickler on that.

So you are being given the money with no expectation for a return to the investor. That is good.

But you still need to know how to run a business as well as detail a car.

You need to read a book called: The E-Myth Revisited by Michael Gerber. You can buy it on www.amazon.com and type in that name and you will find a use one for about $3 to $5 best investment you will ever make. It is only 1/2" thick and you can finish it in a night.

Get it before you do another thing and you will be glad you did.

Focus on the business of detailing, not the technical side of detailing and you will not fail. If you focus on being a technician chances are you will fail.

Regards
Bud Abraham
DETAIL PLUS SYSTEMS

Your last statement there is absolutely true! I always try hard in the wrong places, I need to start thinking in the right places. Thanks for the information.

I'm going to check out that book you requested that I read. I'll let you know when I'm done reading it.

Thanks Again...

Glad to offer some suggestions that might help you.

One thing I forgot to mention is the thesis of Gerber's book which is:

"The fatal mistake many small business people make is thinking that if you know the technical work of a business, you can operate a business that does technical work."

The reason he proves that it is fatal, is because "it is not true," and the major reason most small businesses fail.

The technician starts a business based on his technical experience. However, a business has more challenges than technical ones, like which wax to use or which extractor to buy. It has challenges like pricing; marketing; hiring, training, bookkeeping, etc.

But the technician only has knowledge of technical things and so he tries to solve business solutions with technical answers. It does not work, and you have failure and business closure and sometimes, personal bankruptcy.

Regards
Bud Abraham

Bud is right. I'd like to take issue with the idea that detailers are charging outrageous prices. Just ask Bud how much he'll charge you for a complete state-of-the-art shop set-up. Then figure out how many jobs you'll have to do to earn that money back. While you are at it, ask how much you should take out as your hourly pay. Anything less than $14 an hour is poverty level. Ask a body shop how much they'll charge to spend 3.5 hours working on your car.
Radio talk show guru, Bruce Williams warned against seeing something done for a dollar and proposing to do it for 50 cents because chances are you've missed something.
( If you don't want to use Bud's stuff as an example, there are plenty of suppliers out there whose equipment costs more ).
Doug

Most retail customers usually focus on the quality of your work, while the dealerships usually focus on the cost of your work.

Mirror:

I would care to differ with you on that one.

Retail customers have no idea what is a good detail. They see what you do, shiny car; clean carpets; non-streaked windows, good smell.

You can do a "half-assed" job and they will be happy. I have years of experience with this. Cars that were not done to my standards but the customer was elated and brought in a second car.

The dealer, while wanting a good price, wants quality work. I learned so many things on what was a "good detail" from dealers. Like bending down the rubber moldings on the doors and trunk jambs and cleaning out the dirt. Cleaning the sides of the glove box drawers.

The dealer sees "what you do not do." They look for areas they know most detailers will miss and them on it.

And because they pay so little the detailer is resentful of the dealer and his demands. Whereas the customer sees what you did and does not know what to look for other than what they thought was a problem. And, they say, "thank you."

No,in my opinion the dealer wants quality work, but does not want to pay the detailer as much money as the detailer believes they should get.

I had a dealer today tell me he would easily pay $150 for a recon if he could find a good detailer he could trust. And, I would bet if you proved yourself to him he would pay more.

You can really learn what a good detailed car is from the more experienced used car dealers.

bud abraham

A dealer paying $150 if not more that would be heaven! Other detailers have been telling me to charge a dealership between $60 and $80. One even said $35 but I thought it was a bit low.

My thought on retail and dealerships is on mirror's side just because of what I have experienced. The dealerships around here went to the most successful detail shop in town and I had friends who have worked there. I can tell you that the dealership's got quick, easy, and ****** jobs, they even did a number on the vehicles engines, and you know what they still bring the same cars to the same shop. If that was my business I could not feel happy about the work that was completed in a day but it shows that if you got money and you got a big shop in a small town who else are they going to go to.

If a dealer will not pay you what it costs you to run your business you simply cannot take the business.

If your hourly rate was $30 per hour and it took 2.5 hours to do a dealer car that is $75 to do it. If he paid you only $60 you would loose $15 per car.

"But he gives me volume."

That's great so you get 5 cars per day, you loose $75 a day going volume for the dealer.

There is really nothing to discuss about dealer work. If they will not pay you cannot do the work, simple as that.

Bud Abraham

Right again, Bud. Actually, dealers, like most humans vary in their tastes. Some dealers want perfection and some will accept a hack job if it is cheap enough. You can't generalize about people-except that women always fall for jerks. ( attempted humor )

Also, have you got an average figure for the cost of chemicals used to detail a vehicle ? I'm guessing over $15.
Doug
" All generalizations are false. "

Doug,

I see you asking and answering questions, regarding the industry, but no matter where I look, seek out, I can not find out who you really are, or where you come from or what you do.

Now, I am not questioning your abilities, nor your experience, just that anyone can find out, with a simple search who I am or who Bud is, etc.

Would you care to share with all those who visit and post on this site, who you are, how long you have been in the professional detailing industry, how you got into the industry, etc, etc.

It is only fair, for if one is to offer, provide,advice, those who read it, should at least know "who you are, and how you got to the point that you are comfortable to offer to all who read your posts, that you are providing proven and experienced offerings.

Is that not fair, to all?

Bud and most others do this.

ketch

Ketch, I answered your concerns on another thread. If you wish to take issue with my posts instead of taking issue with my biography, I think the members will find such substantive debate more useful. I wonder sometimes if you would like to have the forum all to yourself, as some of your posts to enthusiasts and newbys have been condescending. As I made plain elsewhere, no one is asked to accept my statements based on my say-so. You, however, often invoke your experience and credentials as a reason for us to " take your word for it ".
If it really worries you that I'm an unknown, understandable, but if you are resentful of independent voices on the forum, well-that's what a forum should be about. I'm not selling anything ; it's just a chance to do something interesting.
Doug



Edited 1 time(s). Last edit at 11/05/2006 03:05AM by Doug Delmont.

While many retail customers may not know very much about detailing, most still seem to focus more on quality rather than price. As long as you either meet or exceed the needs and expectations of retail customers, you will have plenty of good customers for a long time. And when you aim your marketing efforts at the correct target market, you will be able to charge a fair price. A price that allows you to cover expenses and make a reasonable profit.

Although some car dealerships are more likely to know a little more about detailing, they usually have a need to get the job done at predetermined price. A price that most detailing business owners find a bit on the low side.

*

Frank:

Your 100% right on always give the customer more than they expect not just what is expected of you!
price will not be an issue and that will be a customer for life!



Edited 1 time(s). Last edit at 09/23/2006 02:26PM by Custom Detail.

Thanks for the reply Randy.

I had an interesting conversation the other day with one of my customer's business partners. Of course, we began talking about detailing and it didn't take long before he got around to asking me how much I would charge to detail his GMC Yukon. He had been getting it done by a nearby, well established, detailing shop so he wanted to know more about my prices and services. He named the shop and he also quoted the price, which just happened to be the same exact price that I had just quoted him for his Yukon.

What I found interesting is that the shop he mentioned charges over $200 for the complete detailing and then if you bring the vehicle back within six months, they will re-seal the paint for $70. I asked the following questions; When you take your Yukon back for a re-seal, do they do anything else with the car, such as the interior? do they at least clean the windows and vacuum the carpets? The answer was no. For $70 you get a re-sealing of the paint. If you want everything else that would be a complete detailing at full price.

Now I got to thinking about this type of pricing strategy and I couldn't help but come up with the following questions;

1) Why in the world would a detailing business want to get customers into the habit of bringing their vehicles back every six months for a $70 re-seal?

2) Doesn't it make more sense to promote a complete detailing every six months at full prices?

*

Doug:

You are correct, one should not generalize, but sometimes, as we have done here when speaking about dealers we can generalize to a degree: "they want a low price."

We have determined that chemical costs per car for a complete detail are around $6.00 to $7.00.

Regards
Bud Abraham

Frank:

Charging the $70 for a re-seal is smart marketing to get the customer back.

It would be great to be able to charge them for a complete detail again in 6 months, but that is not a reality. And, most vehicles should not need a detail in 6 months, if you did the job the first time, unless of course, they are slobs in their car.

The paint protection is a great and successful concept and once you get the customer to buy into the concept and pay HUGE dollars his mind-set is "I got to protect my car." So, with the river flowing in that direction you tell him to come back in 6 months and I will keep your car protected.

The key is that when they are back you check out the rest of the vehicle and "suggested" the interior, trunk, engine might need a "tuneup."

See the marketing benefit here?

Bud Abraham

Bud,

Like you have learned so many things on what was a "good detail" from dealers, there is much to be said about a detailers ability to just go out there and always try to constantly improve the process. That is the only sure way to keep those customers coming back.

Also, what you said about cleaning around the rubber moldings on the doors and trunk jambs and cleaning the sides of the glove box drawers are examples of some of the things I had to pick up on from retail customers. That is how I found out about lowering the windows part way in order to clean the upper edge of the glass. That's probably one of the most forgotten areas that many detailers miss. And you are absolutely right. Most dealers would pick up on that top edge of the windows not being cleaned in a heartbeat.

*

You bet Frank

That shop is using the 80/20 rule, but not the way I learned in a buisness class I took years ago. The idea is to spend 80% of time on 20% of your customers to get them to spend more money in your shop and use more of your services. They are getting the customer to come back and to spend less!

Bud,

Sounds like we may be thinking in two different directions when it comes to marketing.

There is no real reason why a detailing business cannot bring people back every six months for a complete detailing at full prices. It all comes down to fully understanding the target market you are aiming at and how you go about conditioning the way your customers are going to think about detailing.

With the proper marketing approach and especially when you aim your marketing at the proper audience, it is a reality to be able to charge them for a complete detailing every six months at full prices. Actually, if a detailing business owner sends out seasonal reminders with the change of each season, they may even begin to see their customers get their vehicles detailed every three months at full prices.

I think what Randy said about the 80/20 rule may apply. Usually, 20% of your customers account for 80% of your income. Yes, when you total up your income for the year you will, in most cases, not be surprised to find out that the majority of yearly income actually only comes from only 20% of your customers. Agree?

Frank

I should have added, that shop has it in reverse use the lost leader price to bring them in and up sell them to your highest price package! But than again I would think a well established shop shouldn't have to do that. I have not done it in years.

I liked missing the top edge of the windows there are more of those most missed spots like the back side of the rear view mirror and the body edge under the rocker panel to name a few LOL.

I enjoyed your article in PCW&D a few months back and was delighted your pricing formula for big rigs/RVs was a copy my own almost to the letter! So I raised my prices a bit and not a complaint Thanks Man