Since the emergence of the retail market for detailing services in the 1980’s, a controversy has arisen in the industry whether a detail business should, or could, profitably continue to do wholesale work for the auto dealers at lower prices than they would receive from the retail customer. 

Those who argue in favor of wholesale work are the majority of operators whose sole source of detail work or 90% of it is the auto dealer. 

On the other side are those detail businesses who have emerged in the 80’s and 90’s who feel five cars a day at $200 is better than ten at $95 - $100, especially with the rising cost of the minimum wage and scarcity of good labor. 

Depending on your perspective, an argument can be made for either side. 

A Case for Dealer Work 

Those who advocate doing dealer work take the position that it is steady, can be depended on year round, and, if you do a good job, will always be there. 

Furthermore, they argue, it is less costly to do for several reasons: 

• Because all cars get the same job, employees are more productive and consistent. And if you pay by the car, they are motivated to complete as many cars as possible per day.
• You do not need a fancy facility. A garage, warehouse, or lean-to is all that is required. The dealer never visits the shop and does not care what it looks like.
• You do not need to worry about your employees’ appearance or deportment. They never come in contact with the dealer.
• You do not have to advertise because you only have one or two dealers you call on personally.
• You do not have to pay workers comp or withholding taxes because you hire “contract labor.” (Many detail shop operators still operate under this incorrect assumption and could be liable for huge fines. The issue of contract labor should be discussed with your IRS office, CPA, or a bookkeeper.)
• You do not need insurance because the dealer already has it. (another false assumption)

Whether these assumptions are correct or not is subject to discussion, but this is not the issue at hand. Suffice it to say that many operators believe them to be true and operate their detail business accordingly. 

A Case for Retail Work 

Many operators of retail-oriented detail businesses simply will not do dealer work, even if the dealer comes to them. Why do they take such a strong position against this type of work? For several reasons, involving a combination of profit and emotion. 

• From a profit point-of-view why do cars for $75 to $100 when you can get $150 to $300 for the same work doing retail? And, sometimes for even less work because retail cars are in better condition. (You should note that a dealer sees what the detailer does not do, the retail customer, on the other hand, sees what you do.) Retail work is really easier and for double or triple the revenue.
• Labor is less of a problem. Because you do less cars at higher revenues you can hire better quality people and pay them more, thereby creating stability in your work force.
• Greater stability. You are not subject to the whims of a dealer who may change to another detail shop that will do cars for $5 to $10 less.
• Bigger market. There are far more retail cars on the road needing some detail services than used cars brought to you by one or two dealers.
• Respect. Dealers by and large have a very low opinion of detailers and they show it in their actions toward the detail business owner. (Of course, much of this disrespect is brought on by the detail owner themselves, by their appearance and that of their employees and the way they conduct themselves and their business.)

There may be more arguments for either side, but these are the most common. And, as you can see, they present a strong case for either point of view.

If I were operating detail business again I would lean toward the retail position for most of the reasons presented. However, I would also keep my options open. We always contacted with a few dealers daily, looking for any overflow that will bring us an additional $100 to $200 per day in revenue. 

Certainly never displace retail work for dealer work, but will use it only as a supplement on days when retail business is slow. Use it to give your part-time employees more hours. Dealer work can also be used for training new employees since every car is a complete. Care has to be taken in final inspection; however, to be sure the work is done to the dealer’s exacting standards. 

Enter the Full Service Detail Shop 

As a supplier to the detail industry, it is our responsibility not only to offer equipment innovations, but as important, to provide operational information that will help operators become more profitable in the operation of their detailing business. 

As a result, after considering the controversy between dealer vs. retail work, and my own personal experience as an operator, and after talking with many detail shop operators, it became very clear that there was an answer to the dilemma. One that was not necessarily new, as most ideas are not, but one that offered a different emphasis on an old idea. And, one that could satisfy both those who believe in dealer work and those who believe in retail work. 

That idea is what I call the “Full Service Detail Shop.” Keep in mind it does not just have to be devoted to dealer work. You can have a detail business that does retail business too. 

What is it? To answer that let’s look at what services an auto dealer will typically have performed on a late model, low mileage used car that he wants to resell in his used car lot. These services include: 

• complete detail
• paint touch-up
• undercoating
• pin striping
• door edge guard
• body side molding
• windshield replacement
• windshield crack & chip repair
• vinyl top dyeing & repair
• exterior trim painting or restoration
• interior vinyl & leather repair & dyeing
• dash repair & dyeing
• fabric upholstery dyeing & repair
• carpet plugging & dyeing
• carpet replacement
• Paintless dent repair
• Carpet dyeing and recoloring

There may be more services but these are the most common ones performed on a used car before resale. In some cases the dealers will do a few and have variety of other suppliers do the remainder. Some detail shops will perform a few of the services and leave it to the dealer to get the remainder done elsewhere. 

But it seems that no one shop does all the service in one place. Herein lies the case for a full service detail shop: you can provide services for both dealer and retail customers. 

Dealer Argument 

Doesn’t it make more sense that it would be more convenient for the dealer to have all the work done to a used car in one place? This means not only one delivery, one billing, and one company to deal with, but probably a much faster turn-around, getting the car on the lot for resale faster. 

From the detail business owner’s point-of-view, revenues per car are substantially increased, without a major increase in operational costs. In fact, by quoting the dealer a total price to recondition a vehicle, the detail shop operator can hide an increase in the price of the detail by several more dollars. 

Believe me; most intelligent dealers would wait in line to have a detail business that could provide all or many of these services. 

Retail Argument 

If you have my other articles dealing with the sale of extra services as a potent source of increased revenues, the benefit of offering these services to your retail customers should be quite clear. Keep in mind that extra services like the detail itself, will sell to retail customers for more than double or triple what the dealer will pay you. 

For example, dealers usually pay $30 for undercoating. A retail customer will pay $70 to $80. Dealers pay $25 for a windshield rock chip repair. The going retail price is $40 to $45. (Most insurance companies waive deductible up to $45.) And a $20 to $25 pin striping for the dealer will bring $45 to $50 for the retail client. 

There Is a Commitment Necessary 

The potential benefits, like most things, do not come free or easy. To be an effective full service shop at either the wholesale or retail level requires a major commitment. A commitment in time, money and training. 

As the operator you will have to devote the time to become knowledgeable and even capable of performing these extra services. You will have to make a financial investment in equipment and supplies to have everything needed to perform the services. And, finally you will have to make a commitment to training some of your staff or hiring and training new staff to perform the services. 

Whether you are a wholesale or retail detail business you must be the on-site operator. As an absentee owner it is difficult enough to absentee manage just detailing services, let alone the commitments in time, money and training it would take to operate a full service shop. 

You could also broker these services through two or three other businesses that provide them and mark them up to your dealer or retail customer. 

This works very well for the retail shop that can more than double the price, but it might not work for the detail business doing dealer work because you’d have to sell them at a price near what the dealer would buy them for. But remember, you are providing the dealer a time and money saving one-stop service. So taken in terms of total revenue per car you could easily charge enough to come out ahead. 

Now let’s look at these various services, what they are, and what it may cost to provide them. 

#1 Detailing 

You already do this, so the only additional commitments you would need to make would be to upgrade your operation with the latest equipment innovations to increase your productivity (that is, more cars completed per man hour) and to provide more training for your employees. 

#2 Paint Touch-Up 

The only way to do this is to use the sophisticated airbrush method of perfect repair as both dealers and retail customers want a perfect fix to rock chips, scratches and bumper scruffs. 
 

Purchase a paint touch-up system that provides the ability to mix over 60,000 different paint colors for U.S, Japanese and European cars.  

Cost: $10,000 with training necessary. 

#3 Windshield Crack & Chip Repair 

What started out as a high cost franchise business has now been reduced to a low cost “buy a kit” business. Kits vary in price from $300 to over $6,000 depending upon the type of system and supplies that are included. All include some type of training either onsite or through video. 

#4 Complete Interior Repair 

Probably one of the more complicated services to perform, but one that can bring big dollars. Novices in the business can buy complete kits with everything needed to perform all these services, including dyes, glues, paints, tools, supplies, and training. 

Cost:  $3,000 to $4,000. Extensive training required. 

#5 Paintless Dent Repair

A big money maker and in-demand service by dealers and the consumer. However, PDR is a complicated skill that only certain individuals can master. It takes weeks of training and months of practice to master this skill. Bottom line, a detail business owner should broker the service or hire a person already skilled in PDR. The cost of tools and accessories can range from $1,500 to $3,000 but training can run up to $1,000 per day and you need at least two weeks training.

#6 Carpet Dyeing and Recoloring

Systems now on the market feature water based dyes that are color matched to the main automotive carpet colors. 

All one has to do is match the color for recoloring or use a darker color to change the color. 

Cost:  $1,300. Self training with manual. 

#7 Gold Plating

A very popular service some 10 years ago. It is not as much in demand now. Only certain vehicle brands actively use gold plated emblems: Cadillac, Lexus, Toyota, Infiniti. 

Systems run from $1,500 to $3,000 depending upon the sophistication, supplies and amount of gold solution included. 

#8 Invisible Film Protection

A relatively new service. This is another in-demand service by dealers, especially luxury car dealerships. 

The technician places a protective clean film over any painted surface on the vehicle subject to rock chips. 

You can purchase pre-cut kits or the film in rolls and cut yourself. 

Suppliers of the film can provide the training. Pre cut film kits range in price up to $150. 

Rolls of film are expensive but the return on the investment is excellent. 

#9 Undercoating 

This is a relatively easy service to perform if you have the facilities. It can be messy so you need an isolated area with a lift, either in the floor or a two or four post system. Application equipment is simple: a pump gun, spray nozzle, and filter. 

Cost: Lifts, $2,000 to $4,000. Pump: $1,250. 

#10 Pin striping 

The most common method of striping is vinyl tape, which comes in a variety of colors, widths, and designs. An inventory sufficient to service most cars is not too expensive. You will also need a hot air gun and supply of adhesive remover to take off old striping and adhesive residue. 

In recent years special tools have been offered to the industry that allows you to paint a stripe on the vehicle like an expert. It is relatively easy to use after a few practice runs. There is also a wide selection of adhesive-backed stencil tape available that you place on the vehicle and then simply paint in the stripe. When dry, remove the stencil tape and viola! You have a professionally painted pinstripe of any width or color. 

Cost:  minimal for tool and/or tape. Training available. 

#11 Body Edge Guard 

There are two types of side moldings: rubberized stick-on adhesive backs, which are the simple and the least expensive type; and the metal channel style that must be riveted or screwed into the vehicle body. Then a choice of colored rubberized trim is placed in the channel. Requires an inventory of different sizes colors and types of molding. 

Cost: varies with inventory. Training available. 

#12 Windshield Replacement 

Requires an individual trained in windshield removal and replacement. Some tools are required. Windshields can be purchased from the dealer, a wrecking, or glass company on an as-needed basis. 

Cost:  Minimal. Training available. 

#13 Vinyl Top Repair & Dyeing 

We are not advocating you totally replace vinyl tops, but simply repair small tears. The dyeing is very simple. Latex paints are available that can be sprayed, brushed, or rolled on, and dry streak-free. 

Cost:  minimal. Training available. 

#14 Exterior Trim Painting & Restoration 

Most newer cars sport black or grey rubberized bumpers and trim, and many, after exposure to the sun’s ultraviolet rays, fade. They can be renewed with a simple latex paint designed specifically for this purpose. 

Paint is also available to restore side mirrors that are subject to rock chipping. Requires only a small inventory of paint. 

Cost:  $25 to $30. Training not necessary. 

SUMMARY

A detailer today can consider an outsourcer detailer operation with any or all of these services to cater to the dealers or the public or they can pick and choose the easier services to perform themselves. 

Bottom line, there is money to be made if you can afford to diversify.

When asked by Mobileworks to be a contributor to a blog type format I began to reflect on my last 30 years in the industry and my head started to swirl (pardon the pun) with ideas about what I might say about the detailing industry over these past three decades. Maybe a lot of this history might not be of interest to many of you detailers who were not even alive or, were at best, not much more than infants when I started in the industry, but that is what history is all about. So the following is some of my recollections about the industry then and where it is today and where it is going.

Finally, I end with some ideas on how today’s detailer might want to consider marketing their business to enjoy greater revenues.

My first experience detailing goes back to 1960 when I purchased a 1956 Ford Victoria hardtop. My cousin was sales manager of the largest used car operation in Portland and told me to bring it by and he would have his people detail it out for me. At that time I really had no idea what a “detail” was but he explained they would clean and shampoo the interior and polish and wax the exterior. When I got the car back I was elated at how good it looked and it only cost me $25.00.

Then in 1967 another cousin and I purchased brand new matching 1967 Chevrolet Impalas, mine metallic blue and his black.

As luck would have it the dealer agreed to give us a free polish and wax on the cars and as a result we met Pat the detailer for the largest Chevrolet dealer in our city.

After picking up our cars from Pat, he tells us to come by anytime we need a detail or wax job and “he would take care of us.” Which, it turns out to be, him doing work for us and our paying him under-the-table. And on occasion he would slip us a can a paste wax to apply to our vehicles in between details by Pat.

Some things never change.

What Pat did back forty years ago are things being done today in dealership detailing departments and anywhere a detail operation is not run by the owner.

That is, side work being done on the owner’s time and the cash-money being pocketed by the detailer. The work being done using the owner’s chemicals, supplies and utilities. And the owner’s chemicals being passed on to the customer as a fringe-benefit for doing business directly with the detailer.

Getting married in 1968 there were no more details being purchased as a newlywed who had to save money for a down payment on a house.

It was not until a few years later after going to work with Hanna Carwash that I came across detailing again. Some ambitious and creative carwash operators out of LA come up with the WAXCO program for carwash operators where WAXCOA sold a sixteen pound GEM orbital polisher; cans of Simonize cleaner wax and a case of one-step cleaner glaze and a canopy that carwash operators could put up on the lot at the exit of the carwash and sell $14.95 waxes. With a paint brush you put some of the Simonize cleaner wax on the bonnet and then put a few lines of the liquid cleaner glaze over that and put it to the car.

Needless to say that if the car were in good condition you had no problem, but if there was oxidation or scratches, etc. it did not work.

Impressed with this concept a friend and myself decided to set up a mobile detail business and purchased a WAXCOA package. This mobile waxing business was a once a week venture operating in a parking garage on Sunday’s. The promoter conducted a Sunday Auto Market at which owners would bring their cars and park in a covered parking lot and wait for buyers to show up to buy.

We wheeled our grocery shopping cart from floor to floor asking the car owners if they wanted a Simonize Wax Job for only $10.00. Our best day in that ill-fated venture grossed us $90.00 for five hours work.

After about a thirteen year hiatus in 1981, after leaving the Hanna Company I got involved with another company in Phoenix, Arizona that was manufacturing carwash equipment and, as well had this idea for a retail oriented detail concept, developing state-of-the-art retail detailing centers.

Jud Smith initially created the concept for the dispensing work stations which are similar to what our company builds today with some improvements, over the years. Together we developed the operational program for DETAIL PLUS Car Appearance Centers.

The problem was that the consumer was not ready for retail detailing and detailers too were not ready, they were geared to do work for the auto dealers.

Marketing Facts in the Late 70’s and Early 80’s

• The average length of ownership of a car in the USA was 3.2 years – people did not need detailing, they did not own their cars long enough
• The average price of a new car was not quite $8,000.00
• The average price of a used car was under $5,000.00
• The number of detail shops listed in the Yellow Pages was less than 4,000
• At least 85% to 90% of these operations did almost all dealer work
• Of the 15,000 carwashes in the US only about 10% did detailing and most of that was dealer work
• Less than 10% of the motoring public knew what auto detailing was, and probably less than 5% had ever purchased the service

What Changed?

Some major changes occurred in the US economy and the US society, multiple causes, that had a huge impact on the detailing industry, the effects which are still today in 2009 driving the industry.

The price of automobiles started to increase from around $8,000.00 to prices today that exceed $30,000 and $40,000 for non-luxury vehicles. As well, the price of used cars is close to $20,000 today.

As a result the financing terms begin to increase. From the 12 month and 14 month terms of the 70’s to 48, 60, 72 and even 84 month terms today.

With the increase in financing terms came an increase in vehicle ownership from the 3.2 years in 1978 to the almost 9 years today.

As well as these economic changes there were some socio-changes that occurred that had a positive impact on the detailing business.

One big one was what you might call the “liberation of women” which can be defined and discussed in many ways but from a socio-economic point of reference it means that women were now pursuing their own, well-paying careers. If married, they were working and not spending all their time in the home.

As a result you had people with more disposable income, whether single or married who did not have much leisure time and were looking for all types of things to protect leisure time and spend disposable income on. The market was moving from a “do-it-yourself” (DIY) market to a “do-it-for me” (DIFM) market.

Plus, these consumers were aware that their vehicle cost more, was more sophisticated, and that it needed cosmetic car care might be too much for them to even try to work on, if they had the time or desire. For some they feared they might damage the vehicle and for others while recognizing the need for cosmetic car care, they simply did not want to do it.

The Industry Had Blinders On

What is interesting that even though this huge market potential for retail auto detailing services existed way back in the early 80’s the detailers and even the detail supply companies, which were, and still are today, the chemical companies, did not recognize it. They all kept doing what they had always done. For the detailer it was to do wholesale work for the dealer at very low prices. For the chemical suppliers, it was to sell chemicals to those doing detailing. What they missed out on, and still miss today, is that the detail industry has changed from a service done for or by the auto dealer to a legitimate retail auto service.

As a result they have not, and still today, do not provide the detailer, a great deal of business information.

Many other auto service industries such as auto repair and collision repair, to name a couple, find their industry suppliers providing unbelievable amounts of management information to assist their technician customers be successful in operating a business as well as doing the technical work.

Because of these blinders with regard to the detail industry potential the existing detail operations did not initially capture the consumer demand for detailing. And, there were other auto service industries that should have, but did not capture this opportunity either.

The consumer looking for cosmetic car care went to auto dealers for the service; they went to body shops for the service some even to auto mechanics and most said we do not do this service. The one industry that did respond was the carwash industry. The carwash operator was already providing cosmetic car care services to the motorist. So they were perfectly poised to capture the potential. They had an established reputation; a customer base; a facility, they had money so it was natural for them to take advantage of this demand and they did aggressively, but not necessarily correctly for about ten years.

However, being carwash operators first, and not really understanding the detail business, many moved to fast maintenance services such as waxes and carpet shampoos that could be completed on new cars or cars in good condition in 15 to 20 minutes after the wash. This was easier for them and satisfied the need of the carwash customer when they were at the wash, and wanted to get in and get out.

As you can see it has been a very slow journey for the detail industry to grow into the potential that the many socio-economic changes have presented.

Where Does the Detail Industry Go From Here?

Since the early 90’s and into the 21^st century the detail industry has undergone a major change. Going from a service done by or for the auto detailer to an in-demand retail auto service. More and more entrepreneurs are entering the business. As well, carwash operations are offering both express maintenance detailing services and full service restoration detailing services. Auto dealers are selling detailing to the public; body shops are getting into the retail picture and even quick lube centers offer some forms of auto detailing.

There has been a growth in the number of retail oriented fixed location shops as well as a great increase in the number of mobile detailing and washing services. The problem with the mobile operations is that they are not charging enough money for the custom service they provide their customers at their home or office. But that is the subject for another blog.

If today’s detail business owner is going to make a good living in the detail business, as many are, they are going to have to set up their business as a legitimate business. They need to have the skills or pay for the skills needed to operate a business that offers detailing services.

Once a detail business owner addresses the challenges of operating a business they can focus on how to get the customers to “beat a path” to their door or have them “beat a path to the customer’s door.” (mobile operations).

The Need for a Marketing Plan

Of any one thing that is critical for a detailer to understand and master is marketing, which is nothing more than a plan that is their guideline of how to deliver their detailing service to the market.

To keep it simple, because so few detailers understand the term and panic when told they have to develop a marketing plan, let me use a simple example.

Say you wanted to sell detailing services to auto dealers only, what would you do? How would you get their business?

Most likely you would figure out which dealers might need your service and which of those would offer you the most volume and best price. Then you would find out the person’s name that is in charge of outsourcing detail services and make a personal sales call to the dealership.

This is a simplification of what marketing is all about. Identifying a market; determining why they would buy your service; where they are and how to reach them.

However, marketing to the retail customer is not so simple because there a lot of questions you have to answer before you can determine the best market for your service. Not everyone who drives a car is your customer. You would like them to be, but unfortunately they are not. So you have to figure out what market you are after.

For example, WalMart is after the masses whereas Neiman-Marcus is after the classes so their marketing efforts reflect these goals.

To Begin

What you have to do is ask and answer these questions, and when you have the answers you will have your roadmap to more business. More revenues come from how good a salesperson you are when the “right customers” come into your shop or call your telephone (if you are mobile).

1. What are you selling?

 You might answer that you are selling auto detailing, but are you? To some markets you might be selling protection of investment. To others, protection of leisure time. Others ego gratification. And finally you might be selling a service to people selling their cars to get more money. You see there are really different markets and they have different reasons for wanting the service, and not one of them mentions price does it? So once you determine what you are selling you must answer the next obvious question:

2. Who will buy what you have to sell?

 Now you are getting specific. You are focusing on those markets or that market which will get you the most business with the least amount of time, money and effort expended on your part. That is not being lazy, that is smart business. In the area of your shop do you have people that want to protect their investment or those who want to protect their leisure time or those who want to show off their clean, fancy car, for example? You can choose more than one market and some may even overlap. Those wanting to protect their investment may also want to gratify their ego.

3. Where are they?

 The answer to this question identifies where these people are located. Depending on where your shop is located or if you are mobile where you could best get to them you need to know either where they live or where they work because this will have an impact on how your reach them with your message.

4. How do you reach them?

 This tells you what form of advertising you will need to use to reach your target customer. This is a critical step because you might have the right target market, but you use the wrong media and not reach the market you are targeting and that is wasted advertising dollars which few detail business owners can afford to lose. For example, if your shop is located in an area where these target customers live them you might want to do a direct mailing to all of the residences within a two mile radius of your shop. On the other hand if your shop is located in the downtown business district it will be hard to direct mail to them so you might want to advertise in a newspaper that has a primarily downtown distribution or a business paper. Almost every major city has a publication called “The Business Journal” and this is read by most of the movers and shakers in any business district. This is not always easy because sometimes you cannot afford the media that you need to use to reach your target market. The key is that once you have identified the right target market(s) you MUST choose the media that will reach them.

5. What do you say?

 This step is as critical as which media you choose and it this means is that you need to be sure that you have the right message for this target market. If this market is geared to protection of investment and your advertisement stresses ego gratification you have delivered the wrong message to the right market. Or if you are targeting people who are selling their cars you would not want to run an advertisement that focused on protection of investment. You have got to have the right message for the right market to get results.

If you can answer these five questions then you are well on your way to getting your target market to come to your business or at least call to ask questions and hopefully make an appointment.

Sales Presentation

As mentioned earlier, the right marketing research (answering the five questions) and development of the right advertisement for the right market will get the customer to come in or call. What happens next is the sales presentation you make to close the sale.

Because this is more involved than can be covered in a paragraph or two we will cover the sales presentation in the next article. What you might do in the meantime is do some thinking about how you would present yourself to that target market. What do you think they would be looking for in a detail business they were going to leave their valuable vehicle with? Would it be the cleanliness of you, your employees and your shop or mobile rig? Would it be how knowledgeable you are about their car, its paint, leather, etc? Try to think like your customer. If he is a rich stockbroker he is not going to be worried about price it will be more on your ability to perform the services on his vehicle without creating any damage, etc. How reliable will you be? How dependable?

If you have some questions on marketing or on sales before the next story is published feel free to contact me at buda@detailplus.com