Does the Oil Barrel Price on The World Market Affect the Oil Change Industry Cost of Materials?

When folks consider running a mobile oil change business, they think about what people are willing to pay for an on-site oil change and lube and then calculate all the revenue they might generate. All well and good except there is an awful lot of cost in delivering such auto services; the payment on the equipment and service unit, the cost of oil, filters, and incidentals - and the labor cost of the technician, and fuel to get there. It's amazing that anyone can even make a profit in that industry if you ask me. Okay so, let's talk.

Yes, one can turn a profit in the mobile oil change business, but it won't happen by doing a few cars here and a few cars there at homes and office buildings. And, consider the vast inventory of filters needed, and what about the cost of oil. It used to be the most inexpensive part of the cost equation for a mobile service operator doing changing oil and doing a lube on a vehicle. But those days are over, we are now in the age of perpetual high oil barrel prices - above $90 and more often than not around $100. But wait, it gets worse or so the industry analysts tell us.

Also consider the potential eventuality of further challenges in the Middle East with the Arab Spring, or in Iraq with instability now that the US forces are leaving the area, not to mention the ever encroaching Chinese thirst for oil and their world-wide scavenger hunt. What I am saying is that the cost of oil for a mobile oil change could easily go from $6-8 to $15 or so, and then there are all those specialty oils which auto manufacturers are making mandatory to comply with their warranties and maintain the car's MPG ratings. Specialty oils with added lubrication have less friction, therefore better fuel mileage.

And as if the price of oil was not high enough already, Goldman Sachs Analysts predict $130 oil barrel prices by 2013, which is extremely possible. Meanwhile, Iran and their nuclear weapons program and the most recent extreme sanctions for Iran will have a serious effect on oil prices in the very near future, something we might all start feeling rather immediately - economically speaking that is.

If as mobile oil change company raises their prices too much to cover all this increased cost, fewer clients will wish to partake, and fewer customers means more travel time between them, more added cost, and that just makes it real difficult to compete with a low-cost leader like Walmart Supercenter auto lube and oil change deals at $12.99 to $21.99 depending on the city and their sales of the week specials. So please consider all this and think on it.

Lance Winslow has launched a new series of eBooks on the Mobile Oil Change Business. Lance Winslow is a retired Founder of a The Oil Change Guys, a Nationwide Franchise Chain, and now runs the Online Think Tank; http://www.worldthinktank.net

By Lance Winslow