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The role of oil changes in your business plan?

mccannable
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mccannable Collaborator

mccannable

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I question to question how oil change places make money on that business model. Oil changes, even at a full price, are generally low profit for the time of writing up new customer till they leave vs other repair work.

 

When i started our business plan I viewed oil changes as means to growing a customer base for future repairs. Of course we inspect cars and report legitimate maintenance and repair needs but we do not push hard unless its a serious issues. I believe the quick lube stores have put a bad impression for high pressure sales and ad ons. As we progress in business I may start to see some potential from the little profit made as long as it doesn't take away from repair work. We do not market ourselves as a quick lube business but its an easy way for future customers to test the water and an easy way for us to win them over.

 

How much of your model is from oil change profit and what is your attach or future sales rate on these customers.

 

also, these oil changes are messing up my per ticket average so I can get some solid sales numbers. Do you include them in your per ticket average or run them separate(if my software can separate them)?

bstewart Collaborator

bstewart

Posted
Posted

I've thought about this exact issue a bit as well. It's why I call oil changes a necessary evil of our industry.

For starters, you're on the right track with inspections and reporting to your customers. You can't feel bad about reporting everything, and I mean every single thing, that you find, because it is your professional duty.

Your customers are depending on you to find all the problems with their car, and inform and educate them as to what is necessary to fix now, soon and later.

 

From what I've read, doing all oil changes by appointment only is a good idea. This differentiates you from the bad quick lube mindset that you spoke of.

Take your time to do a full inspection, don't rush through it.

Also, take pictures of your findings and show them to your customers! This is the easiest way to sell repairs and maintenance! Let them see the problem with their own eyes, and educate them as to why it is a problem (safety issue - fix immediately etc)

 

Finally, I think that you need to include them in your per ticket average, because they are still a ticket.

However, you should also run them as a separate report, and make sure that you are still in fact making money or at least breaking even on your oil changes.

Also, maybe you should tally up all the performed recommendations that result from your oil change courtesy inspections. You may find that the number is in fact, quite large and profitable, and it may put your mind at ease about oil changes.

ATSAutomotive Collaborator

ATSAutomotive

Posted
Posted

They are a necessary evil but not only that. They are service to provide all of your customers to keep them coming to you for their every need. I don't make money on my oil changes but they certainly make up for it seeing as I can inspect my customers vehicles and keep them updated on any maintenance and repairs it needs. I educate my customers about the fact most quick lube places are not checking their car to make sure it is safe for the road and their families. I personally know people who work at various quick lubes and I have found it very scary what they check and what they don't. When customers and automotive professionals speak about the type of employees working at quick lubes, I still cannot understand why anyone goes there.

 

0% of my business model is profit from oil changes. Simply because it is not there. Not to say, there aren't sales that come from just a simple oil change. (Rotate, wipers, bulbs, filters, repair, maintenance)

 

We do a very in depth inspection on every vehicle and I explain every bit of it to my customers. We can't be afraid to scare our customers as to what is needed in repairs and maintenance. Too often are professionals spending the customers money. Tell them everything that is wrong and give them a plan in order to start fixing everything. You would be surprised how many people love that we do this. Yes you may scare a few people away, but the majority of customers will appreciate what you are doing.

bstewart Collaborator

bstewart

Posted
Posted

Well said, ATS. I agree that the inspection and total car care is far more important then the oil change itself. Keep your good customers coming back.

 

Do you lose money on your oil changes, or do you break even?

Tires Too Collaborator

Tires Too

Posted
Posted

Shouldn't we make on oil changes? I'm not saying I do, but dam, we offer a lot of value for a $35 oil change. I've been trying to change how my shop and my customers think about oil changes. It's not an oil change it's a "5k or 7.5k service". I wish I could say that I've been successful in implementing this but I haven't YET. We will continue to try and remove "Oil Change" from our service offerings and move toward maintenance services. I do see owners of European cars more receptive to this type of service(but we do very little Euro), Asian import car owners can be educated but Domestic car owners are very hard to get through too.

mccannable Collaborator

mccannable

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Thanks For all the insight. We do make about $10-$15 per service on house brand oil but am considering lowering cost to reach new customers. I know this has been discussed many times but increasing car count when slow has no downsides.

mspecperformance Mentor

mspecperformance

Posted
Posted

For new customers you could try to market your oil changes as a "minor service" where as you perform a vehicle inspection while performing the oil change. If this is sold right and the customer knows the entire process before you perform the oil change service, you can add dollars to the ticket by charging for the inspection service as well as preparing a customer for potential problems that need repairs.

5 Star Auto Spa Community Regular

5 Star Auto Spa

Posted
Posted

Oil changes is what brings a great deal of our new customers here at our shop. We always perform a complete vehicle inspection with all of our oil change services and always try to educate the customer on the value of preventative maintenance as well as any other repair related issues that we may come across. We find it difficult at times though because of the public perception that a FULL SERVICE oil change should be done in about 15 - 20 minutes based on quick lubes such as Jiffy Lube. It seems as though the general public does not have any distinction between getting a full service oil change done at a repair shop where the vehicle is inspected to a quick lube oil change at a place like Jiffy Lube. This makes it difficult as time is always against you and the customer has been trained in many ways to expect to leave as soon as they have come. What do you guys usually quote in term of time to a customer that comes in for a LOF?

  • 2 weeks later...
Sean Enthusiast

Sean

Posted
Posted

I think total car care is the future and we will probably see places that are considered quick lubes start to do more than just oil. There are good quick lubes out there they aren't all bad and there is much to be learned from examining their business model. Have a look at the www.noln.net site or google noln news and see what they are up to. As someone mentioned prior cars are made better theses days and lube centers that include basic maintenance items as well as tire rotations and small or simple repairs may be on the horizon.

  • 2 weeks later...
alfredauto Experienced

alfredauto

Posted
Posted

We burn waste oil for heat. The oil change itself is break even but it keeps the customers happy and my garage warm. We don't push anything extra on lof jobs unless it's literally an emergency safety issue. it's why people come back. State inspections are the same way, a loser on paper but it keeps the clients happy.

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  • Have you checked out Joe's Latest Blog?

    • Joe Marconi
      The Technician Shortage Is Our Fault, And It's Time We Own It
      By Joe Marconi in Joe's Blog
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      The Technician Shortage Is Our Fault, And It's Time We Own It
      Nearly every day, I hear shop owners complain: "There's a technician shortage. We can't find qualified people. There's no one out there." If that's true, then who's to blame?
      The industry? The schools? The government? I don't know how you feel, but who promised us an endless supply of qualified technicians?
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      Here's the reality we need to face: We do have a problem, but we shouldn't look for someone or any entity to rescue us. Not the government. Not the trade schools. Not the recruiting companies. No one owes us a workforce. If we want great people in our industry, it's up to us. At some point, we need to own up to the truth: Building a pipeline of qualified technicians is our responsibility.
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      Let's take a look at flat-rate pay. True flat rate, which pays a technician only for the hours they produce, is a controversial pay plan that emphasizes high production levels and creates a competitive work environment that, if not properly controlled, can lead to increased mistakes and a decline in morale and team spirit. Additionally, the stress and physical demands placed on technicians as they age are not favorable to long-term employee retention. What do we do with technicians as they grow older into their fifties and begin to slow down? 
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      Now, again, I need to point out that I was truly grateful for the opportunity this shop owner gave me. I learned a lot working there, and the experience was pivotal in my career. But looking back, I wonder how many people were discouraged by these working conditions?
      While the physical demands of the repair workplace are daunting, perhaps even more critical is the culture. Too many of my generation shop owners preached the mindset of "my way or the highway." We were the business owners, after all. We started our companies, took all the risks, and provided jobs. Why shouldn't we be the ones to set the ground rules our way?   
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      Another factor that we are all well aware of is the complexity of the modern automobile. When I started, the work was mostly physical, and you were required to master essentially three vehicle models: General Motors, Ford, and Chrysler. Let's fast-forward to today. The evolution of automotive technology, along with the extensive training and tools required, has outpaced the typical technician's pay compensation, with no clear career path. Again, leading to frustration and insecurity about the future.
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      As technicians age, we need to have a place for them. Expecting a 58-year-old to perform like a 35-year-old is unrealistic. We need to be more focused on career pathing. Provide training, skill development, and coaching to develop leaders and mentors within our older workforce. While their bodies may have slowed, the knowledge they have gained is priceless. 
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      Lastly, don't get left behind. Commit to ongoing training for all your employees. Keep up to date with tools and equipment tailored to your business model. Don't try to be all things to all people and all vehicles. Identify your core profile customer and the vehicles they drive, and become an expert on those vehicles and the services you offer.

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