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Day: June 17, 2018

Rethinking The Oil Change Business Venture

Annual quick lube survey, is it still viable?

I wish to comment on the Fast Lube Business and the annual survey done by Auto Laundry News, one of the few Industry Magazines for the car wash industry. In this 2001 survey, we see an increase on the number of locations out there. Yet the leader of the Industry is by far Jiffy Lube. We see variations on theme, but we can safely say that Jiffy Lube has adapted best to the American public and their desires when it comes to oil changes.

This survey showed the average customer would drive 5.7 miles to get an oil change. If 50{4917788a0bd7aa7369c2a945027b4fe6c9853cda4150a24fe1255b18ce3083dc} of the customers would drive 5.7 miles and 80{4917788a0bd7aa7369c2a945027b4fe6c9853cda4150a24fe1255b18ce3083dc} of the customers usually come from a three-mile radius to get a car wash, I see additional synergy. These car washes with oil lube centers are getting a further reach than the industry average. This is great news for those carwashes adding oil lube bays, but also it takes up space and if not marketed correctly it will not work. The survey was quick to show that oil change facilities do best in middle class areas, not high-end areas. They do poorly in low-income areas. This all makes sense. Free standing car washes were the most likely to have oil lube facilities on there properties. Interesting too is that minimum wage was not prevailing, normally the companies pay $8.00-10.00 per hour. Makes realistic sense and I believe good help starts in this country at $10.00 per hour in most metros and $8.00 hour in rural.

Only 23{4917788a0bd7aa7369c2a945027b4fe6c9853cda4150a24fe1255b18ce3083dc} of the fast lubes had a website. Only half had internet access in the locations. Average employees were 5 full time and 3 part timers. Luckily for the image of this industry 74{4917788a0bd7aa7369c2a945027b4fe6c9853cda4150a24fe1255b18ce3083dc} had specific uniforms. The average shop had 3 bays, not enough to do the volume if adequate blitz marketing and community based marketing were taking place. Average revenue was $32.00 per car. That is an awful lot of upselling since the average advertised price that I have noticed is around $19.99. Less than 30{4917788a0bd7aa7369c2a945027b4fe6c9853cda4150a24fe1255b18ce3083dc} were open on Sundays? Bad mistake since there is no time to change oil and wait in line for most Americans. Average monthly gross was $2,400.00 per month per bay?

This is shit, this is not even a viable business, these people are wasting their time. Think about it, you have cost of oil and filter too and labor? Forget that news. I question the viability of the entire oil change industry. The largest Jiffy Lube franchisee in the country with 180 units was de-listed from NASDAQ and so was another prominent auto care and lube company recently. I like the Kwik-Lube Company and feel they are doing it right, but also question the ROI of such an endeavor seeing these results and the cost to build the building and time to build it. One good thing that the oil lube bays have going for them is the …