By Sheila W. Reicher
Get the Most Bang from Your Chemical Buck
The struggle to remain profitable in an environment where virtually every cost of operating a business is going up at record levels is daunting. The car wash industry is certainly not exempt from these pressures. In addition, since most customers view a car wash as a luxury, in spite of the best efforts of our industry to change that perception, car washes can rarely pass on these increased costs without the risk of losing customers. The car wash operator faces increased costs on one hand and static revenue on the other.
CUT COSTS CAREFULLY
Reducing costs is one obvious way to hold back this profit erosion. Reducing the costs of operating a car wash while still turning out a product that will not negatively impact revenues is not easy. Most quick-fix solutions geared toward saving money can be dangerous. They either diminish the quality of the wash, open the car wash operator to fines for violations of safety and environmental regulations, jeopardize the integrity of the premises and equipment, or damage the operator's credit and reputation.
Costs for the car wash operator are rising in a number of different areas. The most obvious is the spike in the price of crude oil and its accompanying increases in the cost of energy to operate the wash. Costs of insurance, labor, and employee benefits are going up. The cost of the chemicals used to wash cars is going up both as a result of the same forces that affect all these other factors, but also because of increased competition for the limited supply of raw materials necessary for chemical production. As a rule, chemical costs are only a small part of the cost of operating a car wash. But every avenue for saving money needs to be thoroughly explored in this kind of economy, and chemical purchases can provide an opportunity for the car wash operator to save some money.
Often, the first step an operator takes to reduce chemical costs is to cut down on the amount of chemical used by changing the mix ratio of chemical to water in one or more applications. The operator may adjust his metering equipment to dispense less chemical. Cutting back on chemical, however, often means weaker foam, poorer cleaning ability, less "breaking" from the drying agent, or brake dust left on the wheel. To compensate, it becomes necessary to increase the volume of mix that is applied at each step. All that this accomplishes is to put more of a weaker mix into the equation as opposed to less of a richer mix. The cost-per-car may be unchanged or even increased. Or the operator may simply accept reduced performance and hope for the best - that his customers don't notice. Clearly this is not a reliable money-saving measure.
WHEN IS A DEAL A DEAL?
Next, an operator may shop for a new chemical supplier. The first stop on this shopping trip may be a small company known locally for low prices - a so-called "bathtub blender." There is always someone out there who can make virtually any product cheaper - but not necessarily less expensive. This small company may purchase its raw materials from a supplier that sells "off-spec" material. The bathtub blender may also skimp on compliance with safety, labeling, and health regulations. The dangers to the car wash operator with any of these scenarios are obvious.
Off-spec materials do not perform up to quality levels on a consistent basis. In addition, failure to properly label goods, or to sell only goods that comply with government regulations (such as the VOC regulations that have recently come into effect in the Northeast), or to supply necessary paperwork and customer support to the car wash can put the car wash operator at risk of fines and accidents.
Deals and special offers abound in the car wash industry. A chemical company may, for example, offer a piece of equipment free to a car wash operator if the operator agrees to buy all of his chemicals from that supplier. A chemical company may offer a "buy-two-get-one-free" deal or a bonus discount if a customer buys a certain quantity of goods. These deals can sometimes save the customer money. More often than not, particularly with regard to deals that involve equipment and committing to buying from only one supplier, the car wash operator pays more for the chemicals in the long run than if he had not taken advantage of the deal.
The key to analyzing these deals is to calculate the cost-per-car of the chemical, as well as the real cost of the equipment. When the actual cost of the chemical used is calculated, and some comparison-shopping is done for the equipment, it often turns out that the product that seemed like such a bargain is no bargain at all. When the operator realizes how many drums of chemical he will have to buy at a possibly inflated cost to get the "free" equipment from his supplier, it may turn out that the equipment was not free after all.
Sophisticated-looking dispensing equipment and attractive drums and labels may sway a car wash operator. Examine, first, whether the equipment makes the operation easier or more difficult. Examine, too, how complicated the equipment is to operate, how difficult to repair, and what freedom it allows for experimenting with new chemicals or new combinations. Sometimes "new and improved" will really improve the wash product and make life easier for the operator, but sometimes it will not. It is the responsibility of the car wash operator to figure out which of these cases applies before committing to large purchases of chemical or equipment. Free doesn't always mean without cost.
So what's a car wash operator to do? This current upward spiral of operating costs shows no sign of disappearing or reversing. The problem of rising chemical prices is real and widespread. But the car wash operator can take a few easy steps to maximize the value of his chemical dollar:
Watch Every Dollar
There are hundreds, maybe thousands, of different car wash chemicals on the market. Among them are products that will meet the needs of virtually every car wash operator. Keep trying new products until you find the ones that work for you.
Use the Right Chemical for the Job
Work with your chemical supplier to be sure you are using the correct product in each application. A less-expensive product may do a particular job as well as, or better than, a higher-priced one if it is specifically formulated for that purpose. Take advantage of your supplier's knowledge and experience.
Use the Best Chemical You Can Afford that Does the Job
That does not necessarily mean using the most expensive chemical. Higher cost is no indication of a better product. If a product doesn't do what you need it to do, it is overpriced - even if it is free. Insist on free samples, and actually try them, so you can see for yourself how the products work under the conditions at your wash.
Buy From a Reliable Supplier
Make certain that your supplier complies with all government regulations and can help you comply with those you are responsible for. Be sure your supplier is fully insured. Buy from someone with proven quality-control procedures in place.
Evaluate Your Chemicals on a Cost-Per-Car Basis
Calculate your cost for each step for each car. Any reputable manufacturer will show you how. Compare prices among chemical companies, but be sure you are looking at cost-per-car comparisons. Be sure to include any extra charges, such as freight, into your calculations. Insist on free samples before you buy.
Take Advantage of Applicable Discounts
The discounts and premiums that your supplier offers can save you money. If you can find a spot for that extra drum that comes free with purchase or at a reduced price, you can lower your cost-per-car with no effort on your part.
Buy the Product, Not the Promotion
Don't be swayed by hype - fancy drums, slick brochures, products that promise more than they can deliver. Don't buy products that do a poor job just to get the free equipment that the supplier is giving away.
Ask Your Supplier for Help
Your supplier knows the business and knows his products. Tell him if you have a problem. Odds are, he's seen it before and can help solve it or direct you to someone who can. Show him how you are using his products and ask if he has any suggestions on how to cut down on chemical use without sacrificing quality.
Keep your equipment in good repair so that there are no leaks or other opportunities to waste chemicals. Make sure you know how much chemical you are using at each step of the wash process. Check often to make sure the numbers don't change. If your hydrominder stops working, or your staff is using too much product, the sooner you know, the sooner you can fix it. Wasting chemicals benefits no one.
To get the most bang for your chemical buck, you need to "buy smart" and "wash smart." Both are important. Buy from a reputable supplier with a strong commitment to quality products. Buy from someone with the knowledge and experience to help you when you need it. Use your products in the most efficient way possible. Keep your equipment in good repair and your eye on the details. Don't buy more than you need. Make sure your customers get what they pay for.
Sheila W. Reicher is CEO of Linden, NJ-based Jobe Industries, Inc. You can visit the company on the web at www.jobe-industries.com.
AUTO LAUNDRY NEWS is published by EW Williams Publications Company 2125 Center Avenue, Suite 305, Fort Lee, NJ 07024-5898, USA Phone: 1-201- 592-7007 Fax: 1-201-592-7171