Oil Change Competition

Whats the first thing you need to think about when you start a mobile oil change company? Well, at this point you most likely have the van. By now, you have the most common oil filters you are going to need. Hopefully you have a professional looking uniform. Business cards are a must. Have a roll of oil change stickers ready to go. You are going to need rhino ramps if you plan to get underneath smaller vehicles. And you are going to need some type of durable mat for catching spills.

If you have all these items than you have everything you need to operate a mobile oil change business. So what next?

You are going to need customers. This is the part that many people have trouble with. And understandably so. There may not be any mobile oil change company in your area and you might think that you do not have any competition but after buying your equipment you will quickly realize that you have a lot of it. Sears, Midas, Jiffy Lube, Wal Mart, K-Mart, and Meineke Car Care are just some of the larger chains out there that you will have to compete with. They are on every corner, every major strip mall, and spend millions of dollars in advertising to get people into their bays.

And here is the other secret that you will realize about all those businesses. The majority of these chains, besides Jiffy Lube, have a model where they bait millions of unsuspecting people into their shops with cheap oil changes, and I mean cheap to the point where they actually loose money, and subsequently find tons of expensive problems (many of them unnecessary or not even there) to scare the customer.

Here are some examples of what you are up against.

Example Oil Change Competition #1

Midas starts to advertise oil changes for $10.00. Now, anyone in any oil business knows that it costs $10-$13 just with any brand name oil and filter to do an average oil change. Even if you have a national account and can get oil for a far lower price than anyone else and can do an oil change for $10 than at the minimum you are breaking even. Now what about all the overhead, insurance, utilities, and labor (biggest cost) that they have to pay. How are they going to be able to stay in business and make a profit on a $10 oil change? Impossible! But they could care less about the oil change. Truth be told Midas would loose at least $10 per customer if they just got the oil change.

Lets take a fictional person and call her Lauren and she comes to Midas to get a cheap oil change for her Honda Accord. She pulls her car in the shop and sits in the lobby sipping a cup of cheap black coffee and reads a month old magazine thinking this whole thing will take maybe 20 minutes. The service manager comes into the lobby and proceeds to tell her that while they were doing the oil change they noticed a) she needed new brakes b) her timing belt needed to be changed c) her belts were bad or d) her time circuits and flex capacitor needed to be adjusted. Keep in mind this car is just two years old so maybe the most she needed was "1.21 gigawatz" to go to the past an hour earlier to tell herself not to get duped.

She ends up leaving with a $350.00 tune-up bill or new brake pads most likely. Did she need them? Who's to say. She may have or she may not have. But the original reason she had went in was just for a $10 oil change so the system worked.

Example #2

There are some places like Wal Mart, K-Mart, Costco, or Sams Club (if these places offer oil changes) that really do not care that much about making a profit. They just want people to shop in their stores. They want people to come in for an oil change and than buy something else.

Someone comes into a Wal Mart Express for a $20.00 oil change and than they end up buying a new video game they just remembered they wanted to a new iron or $100 worth of cheap Chinese goods.

So this is what you are up against. You have an oil change business trying to make money from doing actual oil changes at a reasonable price that would allow you to make money while a lot of the top chains are using oil changes as a tool just to get customers in so they can purchase other items or more profitable high margin services.

This is the reason why you cannot build your business off price. Never sell any customer on price! You are going to need to appeal to the convenience factor and this especially works with fleets.

This is my motto "We Do Not Sell Oil Changes We Sell Convenience." That should be what you base your business model on. Drive that into fleet managers mind. You take all the guesswork from this part of their job. Every 3 months you come by in the afternoon and take care of it. They may be able to bring their truck down the road for a cheap oil change but it will never get done and they will end up paying more in the end.