Properly setting prices as an auto detailer is probably the most important details of running a profitable detailing business. While you want to remain competitive, you need to know how much money you are currently making, what your services are actually worth in the market you live, and how much you can charge your customers.
In this blog, I’ll break down a few keys to setting prices for beginners, and 5 tips to keep in mind.
Tip 1: Know your Profit Margins
Instead of randomly pricing the services you offer, it’s a good idea to break down your costs on a per/wash basis. As you know already, some products you use frequently are a lot more expensive than others, so you’ll want to accurately keep track of inventory used. If you currently have a rate you have been charging customers (or have a pricing sheet), it’s also important to audit how much money you are actually making right now, and adjust accordingly.
Calculate your Cost of Raw Materials Used
One exercise is to start my measuring how much soap, degreaser, wax, and any other raw materials you are using per month. Take inventory at the beginning of the month and subtract how much is left at the end of the month to determine how much is being used. You can then determine (based on the number of cars you detailed in the month) how much product you are using per job.
This may be time consuming, but it’s important to be as precise as possible to calculate your profit per customer before deciding how and if you need to adjust your pricing.
Gasoline and Fixed Costs
For mobile detailing, gasoline will probably be your biggest expense and should be factored into the equation. Take a look at your data to determine the average distance traveled per detail and the price of fuel during this time. There are a bunch of apps to help you track mileage (like Mile IQ or Stride Tax). Oil changes, routine maintenance, vehicle insurance, and other fixed costs you should also be keeping track of.
Investing in an accounting software like Quickbooks will make these all variable and fixed costs a lot easier to track for tax purposes, and I would highly recommend it if you are a small business owner and looking to grow. Entering receipts in a spreadsheet is fine for starters, but your profitability will become much more difficult to track as you grow (as opposed to software).
Tip 2: Choose a Pricing Strategy
Once you know what your margins are, you can then decide how to charge your customer. Many automotive detailing companies base their price sheets on size and type of vehicle. For a sports car or sedan, customers can expect to pay anywhere from $45-$150 depending on the extent of the service. Larger crossovers, SUVs, and trucks can range from $50-$200, and so forth.
If you are simply washing the exterior of the vehicle (and not detailing), prices at a minimum usually start at around $25-$50 depending on the size of the vehicle.
Pricing by Location and Availability
As a growing business, you obviously want to reach as many customers as possible. You also want to be able to handle the amount of work coming in, and have the right job-to-technician ratio so that your teams stay busy and have an adequate workload each day. One idea is to start by creating a radius around your headquarters, and create variable pricing based on how far you are willing to travel to meet a customer.
If you want to operate outside of this geographic radius, it is okay to charge an additional convenience fee, but the fees for services should remain the same.
Pricing by Market
Prices are going to vary state by state. If you are located in markets like Los Angeles or New York (for example) you will probably want to charge more, and even consider offering luxury packages for clients with high-end vehicles. It’s best to get a few quotes from your competitors, keeping in mind the average detailing cost really can vary based on their packages (as mentioned previously).
When charging hundreds of dollars for higher-end detailing services, be sure to have a good amount of positive reviews and customer testimonials on your website or social media profiles. After all, customers need to trust that you have the experience needed.
It’s also important to invest in certification training through the International Detailing Association if you plan to have crew members that will provide these types of details.
Variable Pricing Based on Staff Availability
It is also okay to charge more for rushed or same day services, particularly if it puts your technicians into overtime.
Customers typically want same day or next day service, but you may have a few customers that want to schedule a detail outside of normal business hours (or outside of your geographic area) for car shows, restoration jobs, or other special requests.
If you have a tech willing to put in the extra hours, you can charge the customer a premium for these types of unique situations.
Pricing by the Hour
The alternative to charging a flat rate is obviously charge by the hour. You will still need to provide an estimate for how long the vehicle will take, and give an estimated total cost. Most find that charging an hourly rate is more difficult and leaves less room for profit.
However, if you know the market in your area well enough to competitively charge on an hourly basis, it can be a good model.
One example is if you offer basic fleet-washing services (where it typically takes your crew several hours per job) and multiple trucks or vehicles need to be cleaned on an ongoing basis. As long as your material costs say relatively minimal, it can make it easier to invoice your customer.
They won’t have to keep an exact count of how many vehicles they need washed each week, and neither will you.
Tip 3: Offer a Variety of Services
Customers love choices, and want a variety of options when it comes to pricing and types of service. From the bare minimum to the all-out full detail, you need to develop several pricing strategies. Think about “add-ons” for those looking for something extra, and “frequent flyer” options (or packages) for those return customers that keep your business alive.
Most detailing services I’ve seen use a combination of both strategies. Here are a few additional ideas to keep in mind:
- Consider offering a membership program that passes along savings to customers who are willing to pay a monthly fee for unlimited washes.
- Quick and simple exterior washes can be done faster, giving you a higher profit margin per wash
- Creating pricing for other types of vehicles like boats, campers, or RVs can help differentiate yourself from others not willing to take on these projects.
Charging for Premium Services
If you offer premium detailing services (like carpet cleaning using extractors) feel free to charge a little extra than your competitors. Those who want the very best for their vehicle will probably be willing to pay it.
Tip 4: Create an Easy-to-Understand Pricing Table
I would highly recommend outlining the services you offer in a basic pricing table. You can find pricing table templates just about anywhere online to add to your website (if you don’t already have one) or to print out.
Stay Up to Date with the Latest Technology
One idea if you are considering an a-la-carte pricing model is to have a pricing wizard which will calculate how much a customer can expect to pay based on the options they select.
Many front-end developers can build this type of functionality into your website, which will make it more interactive and improve the experience for customers. For a few hundred dollars, you should be able to have a really nice pricing page developed with everything you need.
Make it Easy to Read and Understand
Having a pricing table available online or in your app is obviously a must, but making it easy to understand is key. Your pricing sheet and the services it outlines should be incredibly easy to navigate so your customers know exactly what services they can expect and are being charged for.
A user-friendly design is probably the single most important part of any pricing table, so find a good graphic designer that can create one that is responsive to your website (that looks great on all screen sizes). The excel spreadsheet just isn’t a good look!
Tip 5: Be Open To Feedback on Pricing
Pricing should always be audited and adjusted accordingly, as well as keeping track of your sales volume before and after changing prices. The market will always respond if prices are too high, but customer feedback can help point you in the right direction.
One idea is to ask your customers about the value they are receiving by sending out surveys upon completion. The use of apps and rating systems can be hugely beneficial for feedback about how your pricing is being received by the customer.
Depending on this feedback, you can use this data in creating marketing campaigns that you can be confident will be received well at a certain price point.
For information of marketing to customers, sending emails, or advertising, check out our post Car Wash Advertising Basics for Increasing Business.
Always be ready to experiment with new pricing and regularly recalculate your expenditures as pricing for soaps, waxes, and supplies fluctuate based on the supplier you choose. If you need to bring your costs down based on customer feedback, it’s good to know what suppliers can give you the best volume discounts.
When it comes to setting pricing, the most important part is to be fully transparent in educating your customers about what they are getting. You may have to experiment with price points until you find something that works for your business and the types of customers in your area.
Are you willing to lower your prices (while sacrificing your margins) in order to increase your overall profit per day? Your business model will have a lot to do with where you should set your prices. Some detailers prefer only to detail a couple of high-end sports cars per week (while charging a premium), while others would rather detail as many cars as possible without worrying about the high-end jobs.
It’s really up to you.