What is a reasonable rate?

Why do some of you keep bringing your expenses into your pricing? A $250 job should be a $250 job, whether your by yourself in the customers driveway or in a high or low rent fixed location. Shouldn't it? I would think that expenses are just something that you control and the better you control them the more profitable you will be.



I am not saying that you can or should ignore expenses, but I don't see how they should drive your pricing, other than you do need your income to be higher than your expenses.



BOB
 
F150BOB said:
Why do some of you keep bringing your expenses into your pricing? A $250 job should be a $250 job, whether your by yourself in the customers driveway or in a high or low rent fixed location. Shouldn't it? I would think that expenses are just something that you control and the better you control them the more profitable you will be.



I am not saying that you can or should ignore expenses, but I don't see how they should drive your pricing, other than you do need your income to be higher than your expenses.



BOB
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There no way to figure out your bottom line without figuring in expenses. But this is why I still beleive in the fix rate job. (I beleive I've had this discussion on here before and I saw the reasoning behind charging by the hour... It just dosen't work for me) But if your expenses rise signifigantly. (ie your rent goes up or your supplier raised the cost of good signifigantly) you will then obviously need to adjust your rates accordingly if you want to keep the same profit margin. And the only way to do that is by bringing your expenses into the equation.
 
F150BOB said:
Why do some of you keep bringing your expenses into your pricing? A $250 job should be a $250 job, whether your by yourself in the customers driveway or in a high or low rent fixed location. Shouldn't it? I would think that expenses are just something that you control and the better you control them the more profitable you will be.



I am not saying that you can or should ignore expenses, but I don't see how they should drive your pricing, other than you do need your income to be higher than your expenses.



BOB
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This is completely false and here is why, If I were not a business and went to Joe blows house to detail his Jetta for $250, I would probably use about $8 in products and profit $242, Since I am a business and have business and liscencing fees, Garage keepers insurance, CPA, atty. ,advertising and marketing budget, equipment upkeep, rent, and utilities etc. A $250 Job becomes much less than $242
 
imageautodetail said:
This is completely false and here is why, If I were not a business and went to Joe blows house to detail his Jetta for $250, I would probably use about $8 in products and profit $242, Since I am a business and have business and liscencing fees, Garage keepers insurance, CPA, atty. ,advertising and marketing budget, equipment upkeep, rent, and utilities etc. A $250 Job becomes much less than $242
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:werd: It's much different when you throw in costs beyond just the detailing products themselves.
 
mshu7 said:
:werd: It's much different when you throw in costs beyond just the detailing products themselves.
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Generally, a fixed location is going to have higher costs per job than a mobile detailer.
 
Why was my statement false. Because your costs are less, you should charge less for the detail? I don't understand that. Just because you can control your costs better than the next guy, you should pass that savings on to the customer? I don't think so. The object is to make money. If you can charge the going rate and you have less expenses than the competition, you should make more money. Shouldn't you?



BOB
 
You're tag says "casual detailer". Do you keep books on every penny you spend for detailing purposes and figure out what your profit margin is and what you can do differently to save on expenses? Do you have folders of invoices, purchase orders, and a client database that keeps track of how much each client has paid for your services?



When you run a business as a professional detailer, you are also a business man and need to operate like one. Keeping sound books, knowing your sales/expense chart and your profit margin is all part of the process.



Edit: So, Bob, your statement is partially correct. Yes, a $250 job is always a $250 job, but your profit margin will consistently be inaccurate and vague. You are not passing the 'savings' to the client. You are keeping a consistent percentage of the sale.
 
Scottwax said:
Generally, a fixed location is going to have higher costs per job than a mobile detailer.
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True, although I kinda feel that mobile detailers can charge a little more because of the convenience factor. Just today somebody told me they take their car to "Detail Shop X" because he's cheap BUT it's a hassle to drive to because it's out of the way. Plus, they also have to make arrangements for some one to pick them up or drop them off. I think it's fair to charge for the convenience factor.



Another factor for pricing is the target audience. I have my pricing where it's at to keep "lowest price" people from calling me. I've already experienced a good amount of beater cars in the last couple months because of a low priced service I was offering (which I don't offer anymore). I want to target customers that take decent care of their vehicles (ie - don't keep 6 months of trash piled up in the back) but might not have the time, products/tools, or knowledge to do what we detailers do. I'm looking for the people that take a little pride in what they drive and the ones that care about the image of what they drive around.



Expenses alone though, I agree that a fixed location should charge more.
 
As for the mobile detailer v static detailer, here are my thoughts...

Yes, the costs are generally more per job at a fixed location. The pricing, I believe, is competitive between the two. IMO, the profit margin is higher for the mobile detailer while the volume is higher for the static detailer. The issue is to keep a balance.



A mobile detailer should take advantage of their higher profit margin and convenience but needs to work on the volume to stay in business. A fixed location should capitalize on the high volume work while finding things to increase the profit margin.
 
mshu7 said:
True, although I kinda feel that mobile detailers can charge a little more because of the convenience factor. Just today somebody told me they take their car to "Detail Shop X" because he's cheap BUT it's a hassle to drive to because it's out of the way. Plus, they also have to make arrangements for some one to pick them up or drop them off. I think it's fair to charge for the convenience factor.



Another factor for pricing is the target audience. I have my pricing where it's at to keep "lowest price" people from calling me. I've already experienced a good amount of beater cars in the last couple months because of a low priced service I was offering (which I don't offer anymore). I want to target customers that take decent care of their vehicles (ie - don't keep 6 months of trash piled up in the back) but might not have the time, products/tools, or knowledge to do what we detailers do. I'm looking for the people that take a little pride in what they drive and the ones that care about the image of what they drive around.



Expenses alone though, I agree that a fixed location should charge more.
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I agree with this totally, I do a lot of pick up and delivery and add a bit to the total, not my whole rate, because I enjoy driving the variety of cars, but I do charge. I have never been mobile but I know that it is hard for some people to get rides when they drop a vehicle off, plus alot of people have there car detailed simply because they do not want to do it themselves, what makes it easier than not even having to pull it out of the drive way, that is a definite plus for alot of people
 
todd@bsaw said:
You're tag says "casual detailer". Do you keep books on every penny you spend for detailing purposes and figure out what your profit margin is and what you can do differently to save on expenses? Do you have folders of invoices, purchase orders, and a client database that keeps track of how much each client has paid for your services?



When you run a business as a professional detailer, you are also a business man and need to operate like one. Keeping sound books, knowing your sales/expense chart and your profit margin is all part of the process.



Edit: So, Bob, your statement is partially correct. Yes, a $250 job is always a $250 job, but your profit margin will consistently be inaccurate and vague. You are not passing the 'savings' to the client. You are keeping a consistent percentage of the sale.
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Yeah, I am a businessman, just not in the detail business. But, business is business. I do know that, I have seen more sets of books and records than you may want to believe.



In both of my shops, I charge what the going rate is at the time. If my expenses go down, and believe it or not, they sometimes do, I certainly don't lower my prices. By the same token, I have to live with the going rate when my costs go up. Either way, it effects me in the pocketbook. Almost every year or so, I have to raise my prices because of increased costs. Someday, maybe, I won't be able to cover my costs and make a reasonable profit with what the going rate is, then I will just lock the door and go have a beer.



As a matter of fact, I used to do auto glass. I had a guy busy about 30 hours a week. Then came the "I will install it in your driveway for $25 guys". It costs me more than $25 to send a man to any location. I don't do auto glass anymore.



By the way, just washed my Prius!



BOB
 
todd@bsaw said:
A mobile detailer should take advantage of their higher profit margin and convenience but needs to work on the volume to stay in business. A fixed location should capitalize on the high volume work while finding things to increase the profit margin.
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Todd is exactly on target. It always pays to focus on 'profit margin'. That is the key to understanding what is a reasonable rate. Whether you are a mobile detailer or a fixed location, it is always a good idea to know what you are spending (expenses) and simply subtract that from what you are making (total income). That will identify your 'profit margin' and help you to establish pricing that is both reasonable and competitive.
 
Egleone6 said:
Dang, I must be cheap, I try to get 25 bucks an hour. Wash Wax and Interior and Tires and Windows for 100.
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Not cheap, just slow. Get that job done in 2hrs instead of 4 and you're golden. :bigups
 
I said I try. Last couple of cars, I have been getting only 75 for. But only taking me about 2 hours. I figure the less amount of money, the least amount of work. polish/wax instead of putting a layer of polish and then a coat of wax. I have only charged for only 3 cars. I am still new and could use the work.
 
Call around compare apples with apples meaning same level of quality work. One thing I learned from my years of detailing is "you can either make a small piece of something or a big piece of nothing" in my early years I did dirt cheap details just to get my name and work out, alot of them worked out to great referals regular weekly & monthly maintanence jobs which basically had me booked out a year in advance. So when you figure out your rates cover your costs and think about repeat referals sometimes you might make $25 hour but get 5 refered customers. Good luck!
 
Kmhawaiidh said:
Call around compare apples with apples meaning same level of quality work. One thing I learned from my years of detailing is "you can either make a small piece of something or a big piece of nothing" in my early years I did dirt cheap details just to get my name and work out, alot of them worked out to great referals regular weekly & monthly maintanence jobs which basically had me booked out a year in advance. So when you figure out your rates cover your costs and think about repeat referals sometimes you might make $25 hour but get 5 refered customers. Good luck!
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That is great advice, the best I have seen. You gotta crawl before you run.
 
Kmhawaiidh said:
Call around compare apples with apples meaning same level of quality work.



So when you figure out your rates cover your costs and think about repeat referals sometimes you might make $25 hour but get 5 refered customers. Good luck!
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Well this clearly is not the best advice I have seen. When you call around to see what other detailers are charging you are not comparing apples to apples. Unless you ask those detailing business owners about their operating expenses, you will be left with no idea of how much they are truely making per hour as profit.



I am sure most professional detailing business owners will agree, it is all about knowing exactly what you are spending (expenses) and simply subtracting that from what you are making (total income). That will identify your true 'profit margin' and help you to establish pricing that is both reasonable and competitive.



There is no point in getting more and more referrals just so you can keep busy and barely cover your costs. It is all about real profit. That is the best advice when it comes to establishing a reasonable rate.
 
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