The concept of buying groups, also referred to as group purchasing or group buying, traces back in U.S. history to 1752, when Benjamin Franklin formed the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. That organization is still in operation today, and countless other industries have followed suit.
Fast forward 265 years to 2017, and you’ll encounter the creation of N1 Buying Group, the carwash industry’s first and only cooperative purchasing initiative, established by several leaders in the industry.
Formation of a carwash buying group
Like most buying groups, N1 was created to provide value and improve profitability by leveraging the collective purchasing power of its members. Additionally, the N1 Buying Group established a platform of growth for suppliers, while facilitating a best practices forum for large operators and independent distributors in the carwash industry.
N1 founding members include Autobell Car Wash, Waterway Carwash, Benny’s Car Wash and Hoffman Car Wash in the operator division, as well as independent distributor Howco Inc.
“We had an extremely fractionalized industry with significant changes taking place, and there was no voice for independent distribution,” explains N1 co-founder Chuck Howard, CEO of Charlotte, North Carolina-based Autobell Car Wash. “So, members and suppliers joined forces to form N1 Buying Group to coalesce and increase our buying power and improve our respective profitability.”
N1 Buying Group is a membership organization governed by a board of directors and managed by the software and consulting firm LBMX Inc. The group holds annual meetings to provide networking and educational opportunities and further the organization’s goal of improving products and supply chain processes.
Group member benefits
Financial benefits of membership include supplier rebates and the options of centralized negotiations on major product categories, improved payment terms and central billing for improved invoicing and payment processing.
To be clear, Howard continues, “N1 does not negotiate pricing for members. That is done privately and in confidence by each member with each supplier, sometimes during the annual meeting’s ‘speed networking’ component. Member rebates are paid annually based on the total amount spent with suppliers via N1.”
According to Michael Reale, member and supplier relationship manager for N1 Buying Group, “As of first quarter 2022, N1 has 20 members representing approximately 250 independently owned carwashes; four distributors serving about 1,000 carwash locations; and 33 suppliers.
“Purchases from N1 supplier partners grew almost 37% year-over-year (2020 to 2021), and we expect the group to grow again this year,” Reale adds. “Moreover, the growth N1 had in 2021 allowed us to double our rebates to members. We paid out 99.7% more to our members in rebates for the 2021 year than we did in the prior year, and we expect the total paid out to members in 2022 will further increase.”
“For a supplier to have access to a forum wherein buyers operate with a common purpose is a tremendous opportunity for growth,” states founding member Justin Alford, COO of Benny’s Car Wash in Baton Rouge, Louisiana. “The benefits to the supplier are clear and include security of payment, market intelligence, invitation to an expanded marketplace, and the reduction of sales, marketing and travel expenses.
“For N1 members to achieve optimal benefits,” Alford explains, “they should be spending at least $200,000 annually on everything except tunnel equipment, including chemicals, brushes, towels, office supplies, signage, lighting, recycling and water technology, dryers, building systems and control systems, among other things. Members should also expect a minimum purchasing rebate of about 3% in most situations.”
“The best way for potential members to determine if N1 is a good, beneficial fit for their carwash businesses is to check out the suppliers listed on the N1 website,” explained Bill Shropshire, CFO of Autobell Car Wash. “If carwash operators are already using the N1 suppliers listed or are willing to try them, it probably behooves those operators to become an N1 member.
“Furthermore, if operators are willing to share their projected annual expenses in various supplier categories, N1 can give a fairly accurate estimate of what the member’s purchasing rebate will be. Operator growth plans can also figure in heavily in determining membership value financially,” Shropshire continues. “The other membership perquisites may well offer more value to some operators because of the close-knit relationships initiated and developed within the buying group. We have a variety of kindred spirits with similar goals and challenges in an infinity group sharing vital operation information and experience, in addition to industry intelligence, that can far exceed the value of a rebate.”
Another benefit of an N1 membership is that the buying group attributes each membership fee toward its annual meeting costs, which includes air transportation, accommodations, a cocktail reception and dinner, and other meals for the member.
“Joining N1 was a very savvy business decision,” declares Jim Blake, purchaser and project manager for Breeze Thru Car Wash, a 12-wash chain based in Fort Collins, Colorado, that joined N1 in early 2019. “We very much enjoy the benefits of being a member of the N1 Buying Group and do business with most of its suppliers — the most, in fact, and we won the group’s 2021 award for doing so.
“The N1 annual meeting is fantastic for us because we get in-person facetime with suppliers and other operators that we just don’t get anywhere else,” Blake elaborates. “Couple that with the discounts and year-end rebates we receive and having access to the N1 buying portal where we get and pay invoices and see our transactions going back years, and you just can’t beat the multitude of advantages and convenience of this group that is focused exclusively on our industry.”
It makes one wonder — if we had cars and carwashes in 1752, would Ben Franklin have started N1 Buying Group? Probably.
N1 Buying Group was created to help independent carwash distributors and multi-site operators in North America become more competitive and profitable. The N1 Membership is a collective of distributors, multi-site operators and suppliers in the carwash industry. The N1 Buying Group leverages its collective membership of purchasing volumes to negotiate rebate programs with top-brand carwash suppliers, in exchange for rebates on member purchases put through to N1 Supplier Partners. Independents that join N1 Buying Group experience financial growth from exclusive rebate programs with top brand suppliers, improved purchasing terms, and streamlined payment and invoice processing with N1 Supplier Partners. N1 Members also gain access to exclusive networking events. For more information, visit www.n1buyinggroup.com.
