Need help with pricing on one of my packages

E

Eastcoastdetail

New member
I am a new business that will start in June. The lowest price that i could find for a full detail (2-step, shampoo, and engine) was 150 and the highest priced detail shop was doing it for 200. Since im just starting out, how should i price my packages? Go in between (maybe 165 to 170) or should i price high (200 or above)? I had just leased this place and i gutted everything! New dry wall, new paint, and fresh coat of epoxy on the floor. I dont want to be viewed as a "cheap" detailer, rather, i want to be a detailer that will be the talk of the town. Thanks in advance.
 
What if you priced it at something like $220 and had a "grand opening special" price of $175. Your customers feel like they are getting a deal and it will be easier to go up to the $220 price once you establish some clientel.
 
Don't compete on price; figure out your costs and what your target hourly rate for labor is and base your pricing on that. You will get farther competing with quality.
 
Shiny Lil Detlr said:
Don't compete on price; figure out your costs and what your target hourly rate for labor is and base your pricing on that. You will get farther competing with quality.
Click to expand...



Just my 2 cents but I think price is almost always a factor in peoples decision making process...for most consumers detailing is just another service/commodity and they are price sensitive. Obviously it will depend on the target market, but if he is a shop that works on average vehicles for average customers price deffinetly plays. IMO most detailers on Autopia (myself included) think they are worth far more per hour than what the market will allow and end up missing out on a lot of business because they will only work for $xx per hour. For guys who detail on the side maybe price is less of a factor, but for a new shop a competitive price point is important.
 
JPostal said:
Just my 2 cents but I think price is almost always a factor in peoples decision making process...for most consumers detailing is just another service/commodity and they are price sensitive. Obviously it will depend on the target market, but if he is a shop that works on average vehicles for average customers price deffinetly plays. IMO most detailers on Autopia (myself included) think they are worth far more per hour than what the market will allow and end up missing out on a lot of business because they will only work for $xx per hour. For guys who detail on the side maybe price is less of a factor, but for a new shop a competitive price point is important.
Click to expand...



You're correct, but at the end of the day if he sets a *REASONABLE* hourly rate (I know a lot of guys here price themselves at $60-80 or more per hour, I generally shoot for $35) for himself and also takes into account his costs then his price should end up being in line with other shops in his area AND it will guarantee he is profitable to the extent that he needs to be in order to keep the business viable while earning a solid living.
 
Yes, if he sets a reasonable hourly rate for himself he should be fine. All I am saying is that a new shop needs to establish themselves, build a client base, etc. A promotional rate at the begining might help establish that initial customer base...I would rather work for $25 an hour than have an empty shop. Of course you need to increase pricing as you get busier.
 
PRICING must be based on several things or you will find you are working at a "bad paying job:"



a. What monthly salary you want to make?

b. What benefits you want the business to cover: health insurance; paid vacation; sick leave; retirement

c. Your monthly fixed expenses

d. Your monthly variable expenses

e. Profit you want the business to make (usually 10% to 15% - if your business does make a profit you do not owe a business, you have a job)



Once you have this total you need to work with an accountant to help you determine what you have to charge per hour to cover all these expenses.



Then with an hourly rate you simply multiply the hours to a particular job by your hourly and voila, you have your price.



If the market will allow you to charge more, then do so, but NEVER charge less or you will loose money.



When someone says, "oh I don't charge $50 an hour that is too much, I charge $35 that is like shooting in the dark unless that person knows for a FACT that they can cover their costs at $35 an hour."



For example, if a dealer will only pay you $65 a car and your rate is $35 but it takes you 2.5 hours that is $87.50 in cost. But you think I will make it up in volume you are wrong. You are loosing $22.50 for every car you do for that dealer. The only way volume helps is if you can reduce the time to do the car. If you can get down to 1.5 hours at $35 that is $52.50 where you will make money.



That is why I question posted pricing. If you have an hourly rate but don't know the condition of the vehicle how can you say you will do it for $150; $220, etc.?



Just some well intentioned thoughts on pricing.
 
JPostal said:
Yes, if he sets a reasonable hourly rate for himself he should be fine. All I am saying is that a new shop needs to establish themselves, build a client base, etc. A promotional rate at the begining might help establish that initial customer base...I would rather work for $25 an hour than have an empty shop. Of course you need to increase pricing as you get busier.
Click to expand...

This is horribly off topic (I apologize), but I didn't know you were in Abbotsford....



As for how you should price yourself, well, price yourself based on what you feel is a fair price, and what will get you what you want in terms of profit. As long as you're within what everyone else is charging, you'll be fine. When you first open, you can always run a limited time offer such as "50% off all detailing packages for 1 week only !" to generate that initial burst of customers.
 
I have to agree with Shiny on this one. What is the use of having "competitive pricing" if you are not going to make a profit??? I would sit down, calculate what it would cost you to do the job, including supplies, utilities and hourly rate and price accordingly. Of course, your hourly rate would be based on how well you do your job. Obviously if you are excellent, you can charge a higher hourly rate; and vise versa.
 
I feel it is best to price your work on the high end of the market, so I'd get closer to that $200 range, assuming you can cover all your costs and make what you feel is an appropriate hourly wage. You definitely don't want to be the cheapest, that conveys a message of low quality to high end customers and only attracts price shoppers with trashed vehicles.
 
Eastcoastdetail said:
I am a new business that will start in June. The lowest price that i could find for a full detail (2-step, shampoo, and engine) was 150 and the highest priced detail shop was doing it for 200. Since im just starting out, how should i price my packages? Go in between (maybe 165 to 170) or should i price high (200 or above)? I had just leased this place and i gutted everything! New dry wall, new paint, and fresh coat of epoxy on the floor. I dont want to be viewed as a "cheap" detailer, rather, i want to be a detailer that will be the talk of the town. Thanks in advance.
Click to expand...





That's a $375 package on my page, so 150 to 200 is freakin DIRT. You need tierd pricing, $150 gets you a clean car with wax, $250 clean with single step, or engine, $300+ 2 step, blah blah. Your quality will justifty your price. Don't forget to have an express package for like $50/60/75 for those people who could care less that the paint is swirled or claybarred. They just want a clean car.
 
You must log in or register to reply here.
Back
Top