4 ms·

Gas is actually a loss leader at many/most gas stations. My parents owned a gas station about 10 years ago and one of the reasons they sold it and got out of th

by nilkn 9y ago

Gas is actually a loss leader at many/most gas stations. My parents owned a gas station about 10 years ago and one of the reasons they sold it and got out of that business was because competition was so fierce that they had to sell gas at or below the bulk price they paid for it. In other words, they effectively lost a few pennies every time someone bought gas. All profit came from in-store sales of other items.

joatmon-snoo 9y ago
Where in (presumably) the US was this?
- adventured 9y ago
  The parent's story is essentially universal in the US and has been for decades. Almost no convenience stores make money on gasoline, unless they're operating a special setup (the convenience store chain Sheetz for example has tried to build out their own gasoline business to cure this problem). There are a few routine exceptions, usually involving either some kind of rare location (eg right outside an airport exit, usually operating under a special arrangement), or a rare event (something that causes gasoline to be in unusual demand / limited supply).
  - refurb 9y ago
    When I did the books for a gas station in Canada it was similar. This was a franchise location as well, so they had the parent company buying gas for them. Profit on gas was measured in cents per liter, with premium giving the best margins. And by best I mean $0.023/L or $0.087/gal.
mindslight 9y ago
"Bulk price" at a terminal and the true cost of delivering it to the station are going to differ.
unclebucknasty 9y ago
>Gas is actually a loss leader...all profit came from in-store sales That and the increasing prevalence of electric cars, Uber, and other shifts are why the gas-delivery model will likely be unsuccessful over any reasonable duration. The idea seems to be moving in the opposite direction as the rest of the world.

4 ms·

Gas is actually a loss leader at many/most gas stations. My parents owned a gas station about 10 years ago and one of the reasons they sold it and got out of th

by nilkn 9y ago

joatmon-snoo 9y ago
Where in (presumably) the US was this?
- adventured 9y ago
  The parent's story is essentially universal in the US and has been for decades. Almost no convenience stores make money on gasoline, unless they're operating a special setup (the convenience store chain Sheetz for example has tried to build out their own gasoline business to cure this problem). There are a few routine exceptions, usually involving either some kind of rare location (eg right outside an airport exit, usually operating under a special arrangement), or a rare event (something that causes gasoline to be in unusual demand / limited supply).
  - refurb 9y ago
    When I did the books for a gas station in Canada it was similar. This was a franchise location as well, so they had the parent company buying gas for them. Profit on gas was measured in cents per liter, with premium giving the best margins. And by best I mean $0.023/L or $0.087/gal.
mindslight 9y ago
"Bulk price" at a terminal and the true cost of delivering it to the station are going to differ.
unclebucknasty 9y ago
>Gas is actually a loss leader...all profit came from in-store sales That and the increasing prevalence of electric cars, Uber, and other shifts are why the gas-delivery model will likely be unsuccessful over any reasonable duration. The idea seems to be moving in the opposite direction as the rest of the world.