Annual quick lube survey, is it still viable?
I wish to commentary on the Fast Lube firm and the annual inspect done by Auto Laundry News, one of the few manufactures Magazines for the car wash industry. In this 2001 survey, we see an growth on the whole of locations out there. Yet the leader of the manufactures 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.
Auto Locations
This inspect showed the average buyer would drive 5.7 miles to get an oil change. If 50% of the customers would drive 5.7 miles and 80% of the customers ordinarily come from a three-mile radius to get a car wash, I see further synergy. These car washes with oil lube centers are getting a further reach than the manufactures 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 inspect was quick to show that oil convert 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. Lively too is that minimum wage was not prevailing, ordinarily the fellowships pay .00-10.00 per hour. Makes realistic sense and I believe good help starts in this country at .00 per hour in most metros and .00 hour in rural.
Only 23% 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 manufactures 74% had definite uniforms. The average shop had 3 bays, not adequate to do the volume if adequate blitz marketing and society based marketing were taking place. average wage was .00 per car. That is an awful lot of upselling since the average advertised price that I have noticed is nearby .99. Less than 30% were open on Sundays? Bad mistake since there is no time to convert oil and wait in line for most Americans. average monthly gross was ,400.00 per month per bay?
This is shit, this is not even a viable business, these citizen 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 convert industry. The largest Jiffy Lube franchisee in the country with 180 units was de-listed from Nasdaq and so was someone else foremost auto care and lube firm recently. I like the Kwik-Lube firm and feel they are doing it right, but also question the Roi of such an exertion looking these results and the cost to build the construction and time to build it. One good thing that the oil lube bays have going for them is the up-sell, but as the buyer dollar gets tighter and the reputation card debt gets higher and the fall out rates growth where will this extra impulse wage and up-sell cash be advent form?
The manufactures is still addition and new entrants to the shop place are hurting existing units and I question the saturation point, not on need, but on desire. No one wants to spend money on oil changes, they need to. citizen buy what they want, satellite Tv and beer. Not what they need, so I see a frequency qoute issue brewing and citizen waiting 5-6-7 thousand miles between changes. So I believe that if an oil lube bay is not already attached to someone else hypothesize to frequent the factory it will soon be in desire straits. The inspect also showed that 93% Of The Oil Lube Bays Used Advertising To Get Their Custoemrs? Why? We do not advertise, word of mouth and happy customers advertise for us. There you go again more cost.
Also 60% of the surveyed said that competition was discounting. Hmmm? You have labor costs that are high, frequency is down, new car technology on the horizon, cost of oil going to the big guys and throw in a price war? I see qoute as the non-savvy operators leave facilities for sale and exit the shop place. By eliminating the factory and going mobile with the existing buyer base of let's say a mobile truck heal firm which can co-band and fleet services ready you could beat these other fellowships since they running redline over saturations of mailer coupons and phone book ads and no web sites. Many fellowships are not watching the changing demographics at their locations and lease or property costs and unable to sell or borrow more due to their lousy profit margins. And what can you convert and Oil convert bay into? Cover up the hole for a tire shop? What happens when Hydrogen cell comes and no one changes oil. Can you convert to filter type operation? Not truly since often the tires and wheels are offset and will land the modular car into the lube bay hole. We have the solution and we can beat them in roughly every aspect. Some consultants have said; "Bunch of dummies copying each other."
Listen to this part of the survey, advertising dollars were spent on, here is where the respondents said they advertised; Tv 15%, Direct Mail 51%, Radio 38%, Newspaper 35%, Bill Boards 18%, Yellow Pages 53%, other only 13%. Scary, all that costs money and everyone is running redline copying each other. This is what happens when citizen cannot think any longer and cannot adapt and do firm at the speed of thought,
[http://www.speedofthought.com]
81% of respondents said they would honor competitor's coupons? Whatever, why print them then. Let everyone else spend the money and take theirs? 80% said they have tried to use discounting to lure customers from other lube places to theirs. Boy this sounds like the rug cleaning manufactures to me.
Breakdown in costs per job. 10% rent or property, 3% maintenance of facility, 26% labor, 30% materials, 4% utilities and many reported expecting that to duplicate and some have already in the west experienced a tripling. Assurance 4% and that to imaginable to keep rising and some said 8%, buyer claims for damage 1%, this is in-excusable, Advertising 10%. Want to add those up for me. Why are they doing it?
Average new factory costs were; Land 6,000, Improvements 5,000, New tool ,000. Wow all that for slight or no return? average whole of competitors within 10-mile radius? 36% said 3, 19% said two, 19% said 5, 7% said 5 or more. How can whatever invest this kind of money per location when we can build a consolidate of units for a total of ,000 and nearly equal the whole of possible vehicles to service? Also with Aaa construction oil convert facilities and Wal-Mart getting into things, the competition will be bloody and that is a lot of money to invest in a firm with an uncertain future. Not a good bet, if you were a betting man.
We are very much liking this manufactures because we know things the manufactures does not and we can slam them because they have missed the boat. We have seen a few fellowships which are looking into ways to convert the oil on the water for yachts. What is even best is that they all missed the boat at the same time and are fighting on shore for a few slight boats to get to the ship that is leaving the harbor. Who will survive this oil convert war. The one who bests services the customer, they way the buyer wishes to be serviced.
Rethinking The Oil convert enterprise investment
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