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A former Egyptian engineer found the secret to building a big gas-station chain

260 points by wallflower 7y ago

brenden2 7y ago
I don't think it's a secret if you're publishing it in the news. Just sayin'. Also I think this whole article can be summed up as "providing a better experience for customers can increase sales".
- bitexploder 7y ago
  This over-simplifies the nuance. Each business is a little different and it is useful to see exactly how and what is being done. It’s like hiring a business consultant and they tell you a bunch of “obvious” things you are not doing. But you start doing them and your business improves. Maybe you learned something along the way.
  - tyingq 7y ago
    I suspect his hiring strategy plays into it. He hires immigrants from his own church. That probably plays into workers that will do all the little stuff that makes the difference, even at gas station wages.
    - DylanDmitri 7y ago
      I attended a service at St Mary's, and the people were both friendly and compassionate.
- listenallyall 7y ago
  But you're missing the nuance that exemplifies the risk. Will sales (on a low-margin product) improve enough to cover the renovation's cost (hundreds of thousands, to million+)? And the additional ongoing costs of running a "spotless" store? Gas station pumps don't wipe themselves down. And can a guy who owns a few dozen stores compete with chains that own hundreds?
  - dunmalg 7y ago
    > can a guy who owns a few dozen stores compete with chains that own hundreds? With the exception of places like Costco and large truck stops, the vast overwhelming majority of gas stations are franchises where the owner is just some local guy selling under the Chevron or Shell or whatever name. This has some promotional value, of course, but the owner sets the prices just like any other station operator. Ultimately, they all buy fuel from the same local refineries or wholesalers, regardless of the name on the fuel truck that delivers it. Standard Oil encountered some legal issues back in 1911 by using its size and vertical integration to undercut competitors at the retail level. As a result the petroleum production industry is now intentionally very much NOT involved in retail fuel sales.
    - listenallyall 7y ago
      I admit to not having many actual statistics. I agree that most are franchises as you mention. But I strongly suspect that the percentage owned by major chains -- Wawa, Sheetz, Speedway, etc, is growing rapidly. 10 years from now, I believe the independent franchiser (under 10 stores) will be very rare. Growth example: Wawa entered Florida in 2012, according to Wikipedia. In 2019 it already had 167 and they expect Florida to surpass both PA and NJ, their traditional base, in 2021. Pretty sure the vast majority of the FL stores have gas, while many PA/NJ do not. Further, the number of pumps is generally much higher at the big chains, so 1 of their stores may equal 2-3 independent franchise stores in terms of customer count or gas sold. https://www.mcall.com/news/local/mc-nws-pa-wawa-expansion-20190408-jkvyfplwubbn7e6etuadp6jz6i-story.html https://www.mcall.com/news/local/mc-nws-pa-wawa-expansion-20...
    - TylerE 7y ago
      There are plenty of exceptions. WaWa has already been mentioned. Sheetz has 600+ locations and does $8b a year. All corporate owned and operated.
      - dunmalg 7y ago
        >Sheetz has 600+ locations and does $8b a year. All corporate owned and operated 600+ seems like a big number until you consider that there are 168,000 gas stations in the US. Large chains have a LONG way to go until they are more than a statistical blip, and this doesn't even take into account the fact that the federal government has, for over a century, cast a very jaundiced eye at any single entity using its market presence to drive competitors out of the retail gasoline business via undercutting on prices. Looking at the FTC ruling on the acquisition of Sunoco's fuel retail locations by 7-11, they monitor competition in fuel retailing VERY closely, to the point of mandating a certain degree of competition in specific markets. https://www.ftc.gov/news-events/press-releases/2018/03/ftc-approves-final-order-imposing-conditions-7-elevens https://www.ftc.gov/news-events/press-releases/2018/03/ftc-a...
- megablast 7y ago
  > "providing a better experience for customers can increase sales". Right, but what does that actually mean. What is he actually doing to make the businesses more attractive to customers.
- aga98mtl 7y ago
  A key point is that he gets a reliable stream of motivated immigrant labor to take good care of his stations. Normal owners who hire american teenagers will get worse results. This is why Shell is giving him the red carpet treatment to acquire underperforming gas stations.
- thatsenough 7y ago
  > this whole article can be summed up as "providing a better experience for customers can increase sales" That, plus "be part of a community you can rely on for capital and labor." Despite the many struggles that immigrants face, they do seem to often benefit from being part of a close-knit community. As an ordinary, middle-class, non-religious white American from a small family, I'm not sure where I'd turn to find such a network. Open to suggestions, though!
tajalan 7y ago
Paywall
rossdavidh 7y ago
Here's a thought: if the percentage of cars on the road which are electric rises significantly over the next decade or so, will the corner gas-station have a problem? I have heard that the gas is not really the source of profits, but it is the source of the traffic. If fewer drivers need to fill up (or they have to do it less often, in the case of a hybrid), will the convenience store business model be threatened? Or, perhaps, it will just more or less seamlessly morph into the corner grocery store.
- leeoniya 7y ago
  i submit to you, Exhibit A: https://imgur.com/UxlaMi7 https://imgur.com/UxlaMi7 i snapped it as proof else no one would believe me, like grainy, destabilized bigfoot footage.
  - redis_mlc 7y ago
    Sorry, what point are you making with that foto?
    - exhilaration 7y ago
      I think he's saying that even Tesla owners visit gas station convenience stores.
- Andrew_nenakhov 7y ago
  If things remain the same, business will likely flourish: such station can install charging equipment as well, and since recharging takes more time than refilling gas tank, customers will spend more time (and money) on site.
  - j2bax 7y ago
    Yeah but you can’t gas up at your house or at your parking spot at work.
    - 7y ago
forgotmypw38 7y ago
This page is blank (though very tall) without JS.
vpribish 7y ago
clickbait-styled headlines are repulsive
- regnarg 7y ago
  Yea like wtf is a "former Egyptian engineer"? Like is he not Egyptian anymore?
deleted 7y ago
[deleted]
dmix 7y ago
> Even the handles on the gas pumps get buffed down regularly so that “the customer does not put his hand on something dirty,” he says This is what most UX designers do for a living. They think about the small details which get overlooked while everyone is in a rush to build out x feature/functionality. It's what creates emotional connections to products and services which builds strong customer loyalty and helps word of mouth. Just like how they used to know your name at your local small grocery store, those intimate details go a long way. And in commoditized situations people are willing to spend more time/money or go out of their way to use your product. Dan Norman talks a lot about this in his "Emotional Design" book. It's the design stuff that goes beyond merely functionality and most efficient problem solving (ie, obsessing about fewest clicks to do x, instead of the wider experience where adding a communication step might improve the emotional experience). But often it is a luxury for many smaller firms struggling to just get the functionality part right, which is why this person buying up gas stations, providing time and capital, and giving them the attention they needed is working so well.
- lotsofpulp 7y ago
  >And in commoditized situations people are willing to spend more time/money or go out of their way to use your product. It depends if your customer has money to spare and/or if they value the improvements. Walmart succeeded precisely because people don't care about anything other than price for commodities.
  - Cthulhu_ 7y ago
    I think in this particular case it's largely unconscious - people (speaking for myself at least) don't look at whether a fuel pump handle has been buffed, instead they'll have a general feeling of "this station feels nicer than most".
    - deleted 7y ago
      [deleted]
    - dsfyu404ed 7y ago
      Yeah, and the hordes of price sensitive customers will have no problem passing up your "nice" gas station for the one that's consistently 5 cents cheaper.
redis_mlc 7y ago
1) If you want to see an example of that in the Bay Area, the Mile 8 convenience store/gas station at 19th Ave. and Irving is pretty amazing - great selection, two clean, inside restrooms. Closes at 8 pm though. Cheapest sandwiches, snacks and coffee in the area. 2) The article has a good explanation of how an immigrant community works together to dominate a niche using a favorable banking tie and a labor stream. A similar story is that most Bay Area motels are operated by Gujaratis (fixed), and in Canada minimarts by Koreans. Both have strong banking ties for pre-approved loans based on sufficient family labor and the community track record. 3) The Albanian resistance movement in the last Serbian war was funded by a small construction firm in New York. The owner fed back enough weapons and snipers to ground the UN helicopters (!) persecuting them, as well as lobby in DC. There's a very impressive video online.
- vrc 7y ago
  I believe the plurality of motels in the US are owned by Gujarati's [1][2][3]. Hence the moniker: "Patel Motels". I'd venture to guess a lot of the Tamilians in the bay are in the IT sector [1] https://www.nationalgeographic.com/culture/2018/09/south-asia-america-motels-immigration/ https://www.nationalgeographic.com/culture/2018/09/south-asi... [2] https://www.sfgate.com/bayarea/article/Family-Fortunes-Gujaratis-combine-business-2948342.php https://www.sfgate.com/bayarea/article/Family-Fortunes-Gujar... [3] https://en.wikipedia.org/wiki/Gujarati_Americans https://en.wikipedia.org/wiki/Gujarati_Americans
- hogFeast 7y ago
  It is very hard for them to get loans. Paying in cash or getting vendor financing from the seller (particularly if they are extended family/kin) is common. Most migrant communities in the US (and outside) have parallel banking systems (for example, there is a completely separate Chinese banking system in the US...this is a function of domestic Chinese banks not having huge operations outside China, it is more common for migrants to deal with branches from their home country though). I would also be somewhat cautious talking about Serbia. Everyone can accept that neither side covered themselves in glory. Let's just leave it there.
- vageli 7y ago
deleted 7y ago
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adventured 7y ago
The secret to a great gas station business, is being not primarily in the gas station business, but in the higher margin food business. The Sheetz gas station chain along the US east coast for example has a wildly thriving business and is demolishing every other gas station in its path. ~25 years ago they started doing things quite different than all the other competition and it has led to them building out hundreds of locations. They're up to $7.5 billion in annual sales now. It's all built around great locations (of course) and the margins in their food making business. They did touch screen ordering kiosks as early as any other major food-related chain in the US, and 20+ years before McDonald's deployed them widely. The gas merely draws traffic, there's no serious money in that part of the business.
llrando 7y ago
If you know anything about Seattle it can be pretty easily implied what his business actually is doing. He buys gas stations in "up and coming" parts of town with high traffic and makes them safe by driving out the undesirables thereby increasing traffic from the wealthier residents who don't want to be hassled. Seattle has become big and increasingly unsafe so businesses that can provide a sense of security for their customers provide an increasingly better value proposition.
kyrieeschaton 7y ago
The actual secret is low cost of capital and low labor costs, probably both in violation of various labor / tax / finance laws and regulations. This supposedly gave him free cash flow to invest in capital improvements. "in 1998, he scraped together the $75,000 down payment, much of it from family and others in the local Egyptian community" "One key factor: Said staffed his new location with fellow immigrants from his church, Saint Mary Coptic Orthodox Church in Lynnwood" "with the help of a broker — another member of the local Egyptian community — Said got a loan and closed the deal" "Mainly, Said checks in with his managers and staff, many of whom are Egyptian immigrants looking for their own start in America. Many are referred to Said through his church or the local Egyptian American community; some hear of Said even before they leave Egypt."
- darksaints 7y ago
  None of those examples are illegal, and the presumption of criminality based on circumstantial evidence, especially in the case of a minority immigrant, looks far worse for you than it does for him.
  - lotsofpulp 7y ago
    I have done business with many immigrant groups, and I have no qualms assuming small businesses employing recent immigrants who aren’t fluent in local English are not following labor laws. Easiest ones to break are salaried “managers” that work 7 days a week manning gas stations.
  - kyrieeschaton 7y ago
    We have copious experience with this exact business model going back decades over several economic sectors and it's not hard to see where the structural cost advantages come from. If you are, eg, properly accounting for below-market loans as income (on either side), or rigorously following overtime requirements, or equal opportunity laws, your cost advantages rapidly go away. "Maybe we make the stores nice" is not some groundbreaking innovation.
    - 7y ago
aresant 7y ago
Scaling a location based workforce that the owner is visiting once a month and maintaining quality standards is hugely impressive. As the article explains the owner is drawing his HR from the Egyptian immigrant community. As such I think the “secret” of success in this tale is the unique funnel he has developed to find motivated, highly responsible, and respectful labor. Which is almost impossible to find in the US at this point with employment reaching all time highs. Good lesson for anybody that thinks the “buy and improve” strategy is going to come from giving a near minimum wage worker a playbook and checking in once a month.
- cushychicken 7y ago
  >As the article explains the owner is drawing his HR from the Egyptian immigrant community. And good for him, too! He deserves to be incredibly proud of the work he's done. I can imagine that the two-hundred-odd employees he has hired represent just a fraction of the people he's positively effected - especially if they are Egyptian immigrants. Many of them likely brought their families to the US as well. I'm incredibly proud to be an American, hearing stories like this. (Unfortunately, that's in spite of our current administration's attitude towards immigrants. Let's hope that next election manages to turn that sentiment around with a new candidate.)
  - dionian 7y ago
    If he immigrated legally, I'm not sure the current administration has done anything to hurt him
    - drharby 7y ago
      The fact that this is downvoted and the parent's is not for speaking down on the current admin smells of a bias. I'll save face by saying I think the administration is adverse to many people's lives
    - luckydata 7y ago
      As a naturalized citizen of the United States I can tell you with good knowledge that.you have no clue what you're talking about. The Trump administration has made legal family reunions a lot more complex and time consuming than it used to be. Many other issues too that it takes just a little googling or some good faith to discover. That's not even going in the stories of American citizens arrested for speaking a foreign language and not being released for months. https://www.latimes.com/local/lanow/la-me-citizens-ice-20180427-htmlstory.html https://www.latimes.com/local/lanow/la-me-citizens-ice-20180... Saying this kind of stuff at this point is not morally neutral, you're actively abiding an inhuman and monstrous regime that's killing people out of bigotry and greed, you should be ashamed.
JustSomeNobody 7y ago
Focus on customers and employees and have pride in your product. Now there’s a lesson modern business could learn. It’s not about returning all profit to the wealthy investors.
kyleblarson 7y ago
His is certainly an impressive story, but you also have to account for the fact that a lot of the neighborhoods in which he owns gas stations have seen massive inflows of money from Seattle's insane growth in the last 25 years.
KoftaBob 7y ago
As a fellow Coptic Egyptian, I can tell you that his ability to directly source talent from Coptic Churches in the area is a huge advantage for him. Just like how warm intros in the VC world signal that the person making the intro can vouch for them as trustworthy, a similar benefit is had when sourcing employees from a tight knit ethno-religious community. If he hires them to manage a gas station and they steal, cause problems, or anything like that, the community will know about it and their reputation will suffer.
- vageli 7y ago
  > If he hires them to manage a gas station and they steal, cause problems, or anything like that, the community will know about it and their reputation will suffer. Further, the family's image becomes tarnished to an extent in the eyes of the community, and family is often a powerfully reinforced social structure in immigrant households (my own included) with the ability to compel action.
appleshore 7y ago
Most gas stations seem offensive and predatory in the items they offer customers. I understand freedom of choice and business models but the entire system is plagued by unhealthy and potentially dangerous products (eg random herbal supplements, synthetic cannabinoids etc). And more than half of gas stations in major cities don’t have bathrooms (people abuse them obviously). And the workers are often underpaid. Verse a system that offers fair pricing, healthy options, positive re-enforcement, incentivizes public facing employees to learn CPR and first aid, paying higher wages to help upward mobility and savings, creating a place for community interaction. Nope, it’s just sugar, cigarettes, “rhino” pills, alcohol, mistreated underpaid employees living a fraction of their potential, dirtiness and no bathrooms.
- driverdan 7y ago
  > Most gas stations seem offensive and predatory in the items they offer customers. Convenience stores sell what customers want. If those items didn't sell or customers had a preference for something else then they'd change. > And the workers are often underpaid. No such thing. So long as someone is willing to work for a certain wage they're getting paid exactly what they should be.
  - atonse 7y ago
    Found our Robber Baron mentality right here. Nobody is "willing" to work at an un-livable wage. Forced is probably a better term. Not forced by their employer, but by circumstance.
    - strathmeyer 7y ago
      Gee if the wage is un-livable how are they surviving?
      - mschuster91 7y ago
        Working two or more jobs and/or being subsidized by government assistance (food stamps, or in Germany Hartz IV).
ossworkerrights 7y ago
This seems like a recipe for success that can be applied in some east european countries still lagging behind the rest of the eu: take old and run down shop in areas with a good potential, provide kick ass services and improve the look and feel of things.
- mschuster91 7y ago
  > in areas with a good potential You won't have much of these in (South) Eastern Europe. There is a massive brain drain towards Western Europe... every shop needs customers with spare money to go shopping and that's hard for anything that's not absolute necessities when all working-age people from the area went off to greener grasses. Originally that was the reason why the EU introduced various funds to improve life/economy in the poorer regions... while for some regions it worked out decently, many others had all the money sucked off to corruption. Between 2013 and 2017, for example, at least 1.5 billion € in development funds were wasted (https://kurier.at/politik/ausland/betrug-mit-eu-foerdergeldern-die-aufdecker-haben-kaum-eine-chance/400496758 https://kurier.at/politik/ausland/betrug-mit-eu-foerdergelde...).
  - ossworkerrights 7y ago
    Yeah having been back to Romania for a while now I think the article is a gross understatement of the amount of fraud and poor investment choices surrounding EU funding. However, the country is undergoing a massive bubble at the moment, and most areas appear to be undeserved or served by low quality services. By following the example of this Egyptian guy, one could really make a difference and turn a nice, clean, profit in here.
CalChris 7y ago
I drive an EV so I haven't been to a gas station in years, maybe a decade. However, I think gas stations, maybe this guy, could better serve EVs. First, we're going to be at a charging station for about a half an hour. In fact, limit us to half an hour. Provide an L3 QC so we can charge. Air so we can top off our tires. Wiper fluid. WIFI. Got a Tesla, CHAdeMO or SAE? Great, we have an adaptor for that. Brownie points for a vac, garbage and recycling. Charge a flat rate, $20 (?). Got a Tesla? It goes on your account.
aazaa 7y ago
Bogus Norton Security nonsense. I'm outta there.
scarejunba 7y ago
The magic here is he leaned on his community to everyone's benefit. This is a thing immigrants easily do in America and it's a massive competitive advantage. It works even for non-business. Immigrants will lend each other money for mortgage down payments, cars, exercising options, investments, cover expenses until long term cap gains, etc. in amounts most Americans would balk at. Easy six figure sums with no real collateral. If the investment pays off or whatever, the person loaning doesn't get a percentage or anything like that. All they get is what they already have: continued access to the accelerator net. I honestly think there is a cultural silliness in America about soloing it. Everyone who really makes it in America does so in a team, or because their parents boosted them, or whatever. Very few solo. But the dream in America is you do things yourself. The cultural bias towards "paid my way through college", "moved out at 18", "built it on my own with no help from anyone" is a powerful meme but does not confer benefit on the organism holding it.
- lotsofpulp 7y ago
  > I honestly think there is a cultural silliness in America about soloing it. All tribes that have high trust between them eventually lose it as they economically advance. The high trust between tribe members is required while the tribe members need each other, but once a sufficient number of tribe members become self sufficient, the tribe starts changing into different groups, usually along socioeconomic lines. Rich people lend and invest with each other all the time. See all the companies where a kid gets funding from his parents friends. But they no longer identify with the immigrant tribe. I have watched this play out in my lifetime. When everyone in my parents’ immigrant group was poor, everyone was there for everyone. As the decades went on, some families became very successful. Their children no longer associate with the less economically successful families, but they do with those like them. They go on vacations together, golf, invest in businesses together. But the new members of the tribe still immigrating will not get any support from them.
  - scarejunba 7y ago
    Yeah, the crucial loss is that poor and middle class Americans just generally have no tribe. They also worship this as a source of strength when it's clearly a source of weakness.
jeffdavis 7y ago
"With oil prices then near historic lows, oil refiners were desperate for dealers who could move more volume." Isn't this zero sum? If one station doesn't sell the gasoline, another will, right? Why does the refiner care who sells it?
- taftster 7y ago
  Somewhat. Shell is probably trying to position themselves against their competition. Yes, it's probably near zero-sum game, but there's still competition between the various oil companies, etc. So by having Said take on more stores (due to the quality and volume he proved) means that Shell could take a bigger piece of the pie.
cosmodisk 7y ago
I don't drive so I rarely step into a petrol station but whenever I do it's almost always: wtf?? It's like most operators try to make them as inconvenient as possible.Poor selection of products on shelves, toilets often not clean/locked,etc. No wonder this man is so successful.
616c 7y ago
It is so random the Egyptian-related posts that come up here! The irony here is that most of these principles Sami Said uses are not applied in Egypt and I doubt they would work quite the same. Most gas stations for normal, working class people are dirty and IIRC many do not have convenience stores at all. Kiosks are on almost every street corner, so the gas stations would be wasting their employee time as everyone else, car or not, can find those way more easily. The one exception in upper class neighborhoods and the ring roads that lead between Cairo and major cities, and the gas station rest stops, which have been cleaned up/modernized a lot since my first entry into Egypt in the middle of the last decade. The new cleaner gas stations started showing up then, but now I see many more of them when traveling between cities or the rich/expat-accommodating neighborhoods of Cairo proper (Zamalek, the fancy parts of Ma'adi, et cetera) all of them with On the Run convenience stores. After reading this I Googled, only to discover that is the import of an international chain, Exxon! https://en.wikipedia.org/wiki/On_the_Run_(convenience_store) https://en.wikipedia.org/wiki/On_the_Run_(convenience_store) So beyond hiring other Egyptians (this is not surprising for Americans who see this with many different immigrant communities, a lot have pointed this out already), not sure why his being Egyptian is an important detail. It sounds like a common American immigrant story to me. This is usually where I make a joke about Neo-Orientalism (perhaps double funny since it is an Egyptian person with gas stations), but the article is pretty germane so what can we really say? lol
wahern 7y ago
> In urban areas like Seattle, the best locations for gas stations — along busy arterials — are also the best places for apartments, which are far more profitable. There's a gas station at the corner of Fort Meyer and Nash St in downtown Arlington, VA which sits beneath a church. It looks like it was built purposefully that way. I don't see why you couldn't build one under an apartment building[1], especially a modern one that can handle fumes, etc. I mean, we build residences above much worse stuff today (e.g. the chemical fields created during Silicon Valley's heyday and which now sit beneath many new residential projects), and both gasoline and cars are far cleaner now than when that building was originally constructed. I wouldn't be surprised if there are already many locations like that, in the U.S. and elsewhere. [1] That's how I remembered that gas station--as sitting below an apartment building--but looking on Google Maps it must've been a church all along.
carltonbanks 7y ago
At the risk of sounding pedantic, “former Egyptian engineer” sounds like he stopped being Egyptian at some point. Shouldn’t it be Egyptian former engineer?
rmason 7y ago
It's remarkable how unfriendly large gas stations have come to be. Locally all our Speedways have added TV's at the pumps that play Speedway commercials non-stop. They're all out of sync and it gives you a headache to listen to all of them. It annoyed me so much that I did some googling and I figured out how to turn down the volume ;<). But they had a software update and my little trick no longer worked. But the TV's didn't increase store sales so you know what they did? They cranked up the volume to an ear splitting level;<(. It's almost as if they're trying to drive customers away.
- latchkey 7y ago
  The faster you get your gas and go, the quicker the next person in line can get their gas. Imagine all the people who see a full gas station and keep driving knowing they could get gas later when the station is less full. Gas stations almost need to appear empty at the pumps.
duelingjello 7y ago
Reminds me of an improvement on the advice by good old Felix Dennis: Nice (fake) flowers can do as much or more for decor than antique lawyer or designer furniture.
jiveturkey 7y ago
Most interesting. I wouldn't have thought any of those little details matter, so I guess I am not representative of the market. I never shop at the gas station convenience store (unless traveling and in need of water). I pick a gas station solely on convenience factor, ie closest to me on the correct side of the road. The only criteria I have is that I do not use gas stations (Arco) that have central payment islands vs pay at the pump. I'm pretty amazed anyone cares what gas station they go to, and actually pick one over another.

260 points by wallflower 7y ago

I don't think it's a secret if you're publishing it in the news. Just sayin'. Also I think this whole article can be summed up as "providing a better experience for customers can increase sales".

bitexploder 7y ago
This over-simplifies the nuance. Each business is a little different and it is useful to see exactly how and what is being done. It’s like hiring a business consultant and they tell you a bunch of “obvious” things you are not doing. But you start doing them and your business improves. Maybe you learned something along the way.
- tyingq 7y ago
  I suspect his hiring strategy plays into it. He hires immigrants from his own church. That probably plays into workers that will do all the little stuff that makes the difference, even at gas station wages.
  - DylanDmitri 7y ago
    I attended a service at St Mary's, and the people were both friendly and compassionate.
listenallyall 7y ago
But you're missing the nuance that exemplifies the risk. Will sales (on a low-margin product) improve enough to cover the renovation's cost (hundreds of thousands, to million+)? And the additional ongoing costs of running a "spotless" store? Gas station pumps don't wipe themselves down. And can a guy who owns a few dozen stores compete with chains that own hundreds?
- dunmalg 7y ago
  > can a guy who owns a few dozen stores compete with chains that own hundreds? With the exception of places like Costco and large truck stops, the vast overwhelming majority of gas stations are franchises where the owner is just some local guy selling under the Chevron or Shell or whatever name. This has some promotional value, of course, but the owner sets the prices just like any other station operator. Ultimately, they all buy fuel from the same local refineries or wholesalers, regardless of the name on the fuel truck that delivers it. Standard Oil encountered some legal issues back in 1911 by using its size and vertical integration to undercut competitors at the retail level. As a result the petroleum production industry is now intentionally very much NOT involved in retail fuel sales.
  - listenallyall 7y ago
    I admit to not having many actual statistics. I agree that most are franchises as you mention. But I strongly suspect that the percentage owned by major chains -- Wawa, Sheetz, Speedway, etc, is growing rapidly. 10 years from now, I believe the independent franchiser (under 10 stores) will be very rare. Growth example: Wawa entered Florida in 2012, according to Wikipedia. In 2019 it already had 167 and they expect Florida to surpass both PA and NJ, their traditional base, in 2021. Pretty sure the vast majority of the FL stores have gas, while many PA/NJ do not. Further, the number of pumps is generally much higher at the big chains, so 1 of their stores may equal 2-3 independent franchise stores in terms of customer count or gas sold. https://www.mcall.com/news/local/mc-nws-pa-wawa-expansion-20190408-jkvyfplwubbn7e6etuadp6jz6i-story.html https://www.mcall.com/news/local/mc-nws-pa-wawa-expansion-20...
  - TylerE 7y ago
    There are plenty of exceptions. WaWa has already been mentioned. Sheetz has 600+ locations and does $8b a year. All corporate owned and operated.
    - dunmalg 7y ago
      >Sheetz has 600+ locations and does $8b a year. All corporate owned and operated 600+ seems like a big number until you consider that there are 168,000 gas stations in the US. Large chains have a LONG way to go until they are more than a statistical blip, and this doesn't even take into account the fact that the federal government has, for over a century, cast a very jaundiced eye at any single entity using its market presence to drive competitors out of the retail gasoline business via undercutting on prices. Looking at the FTC ruling on the acquisition of Sunoco's fuel retail locations by 7-11, they monitor competition in fuel retailing VERY closely, to the point of mandating a certain degree of competition in specific markets. https://www.ftc.gov/news-events/press-releases/2018/03/ftc-approves-final-order-imposing-conditions-7-elevens https://www.ftc.gov/news-events/press-releases/2018/03/ftc-a...
megablast 7y ago
> "providing a better experience for customers can increase sales". Right, but what does that actually mean. What is he actually doing to make the businesses more attractive to customers.
aga98mtl 7y ago
A key point is that he gets a reliable stream of motivated immigrant labor to take good care of his stations. Normal owners who hire american teenagers will get worse results. This is why Shell is giving him the red carpet treatment to acquire underperforming gas stations.
thatsenough 7y ago
> this whole article can be summed up as "providing a better experience for customers can increase sales" That, plus "be part of a community you can rely on for capital and labor." Despite the many struggles that immigrants face, they do seem to often benefit from being part of a close-knit community. As an ordinary, middle-class, non-religious white American from a small family, I'm not sure where I'd turn to find such a network. Open to suggestions, though!

tajalan 7y ago

Paywall

rossdavidh 7y ago

Here's a thought: if the percentage of cars on the road which are electric rises significantly over the next decade or so, will the corner gas-station have a problem? I have heard that the gas is not really the source of profits, but it is the source of the traffic. If fewer drivers need to fill up (or they have to do it less often, in the case of a hybrid), will the convenience store business model be threatened? Or, perhaps, it will just more or less seamlessly morph into the corner grocery store.

leeoniya 7y ago
i submit to you, Exhibit A: https://imgur.com/UxlaMi7 https://imgur.com/UxlaMi7 i snapped it as proof else no one would believe me, like grainy, destabilized bigfoot footage.
- redis_mlc 7y ago
  Sorry, what point are you making with that foto?
  - exhilaration 7y ago
    I think he's saying that even Tesla owners visit gas station convenience stores.
Andrew_nenakhov 7y ago
If things remain the same, business will likely flourish: such station can install charging equipment as well, and since recharging takes more time than refilling gas tank, customers will spend more time (and money) on site.
- j2bax 7y ago
  Yeah but you can’t gas up at your house or at your parking spot at work.
  - 7y ago

forgotmypw38 7y ago

This page is blank (though very tall) without JS.

vpribish 7y ago

clickbait-styled headlines are repulsive

regnarg 7y ago
Yea like wtf is a "former Egyptian engineer"? Like is he not Egyptian anymore?

deleted 7y ago

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dmix 7y ago

> Even the handles on the gas pumps get buffed down regularly so that “the customer does not put his hand on something dirty,” he says This is what most UX designers do for a living. They think about the small details which get overlooked while everyone is in a rush to build out x feature/functionality. It's what creates emotional connections to products and services which builds strong customer loyalty and helps word of mouth. Just like how they used to know your name at your local small grocery store, those intimate details go a long way. And in commoditized situations people are willing to spend more time/money or go out of their way to use your product. Dan Norman talks a lot about this in his "Emotional Design" book. It's the design stuff that goes beyond merely functionality and most efficient problem solving (ie, obsessing about fewest clicks to do x, instead of the wider experience where adding a communication step might improve the emotional experience). But often it is a luxury for many smaller firms struggling to just get the functionality part right, which is why this person buying up gas stations, providing time and capital, and giving them the attention they needed is working so well.

lotsofpulp 7y ago
>And in commoditized situations people are willing to spend more time/money or go out of their way to use your product. It depends if your customer has money to spare and/or if they value the improvements. Walmart succeeded precisely because people don't care about anything other than price for commodities.
- Cthulhu_ 7y ago
  I think in this particular case it's largely unconscious - people (speaking for myself at least) don't look at whether a fuel pump handle has been buffed, instead they'll have a general feeling of "this station feels nicer than most".
  - deleted 7y ago
    [deleted]
  - dsfyu404ed 7y ago
    Yeah, and the hordes of price sensitive customers will have no problem passing up your "nice" gas station for the one that's consistently 5 cents cheaper.

redis_mlc 7y ago

1) If you want to see an example of that in the Bay Area, the Mile 8 convenience store/gas station at 19th Ave. and Irving is pretty amazing - great selection, two clean, inside restrooms. Closes at 8 pm though. Cheapest sandwiches, snacks and coffee in the area. 2) The article has a good explanation of how an immigrant community works together to dominate a niche using a favorable banking tie and a labor stream. A similar story is that most Bay Area motels are operated by Gujaratis (fixed), and in Canada minimarts by Koreans. Both have strong banking ties for pre-approved loans based on sufficient family labor and the community track record. 3) The Albanian resistance movement in the last Serbian war was funded by a small construction firm in New York. The owner fed back enough weapons and snipers to ground the UN helicopters (!) persecuting them, as well as lobby in DC. There's a very impressive video online.

vrc 7y ago
I believe the plurality of motels in the US are owned by Gujarati's [1][2][3]. Hence the moniker: "Patel Motels". I'd venture to guess a lot of the Tamilians in the bay are in the IT sector [1] https://www.nationalgeographic.com/culture/2018/09/south-asia-america-motels-immigration/ https://www.nationalgeographic.com/culture/2018/09/south-asi... [2] https://www.sfgate.com/bayarea/article/Family-Fortunes-Gujaratis-combine-business-2948342.php https://www.sfgate.com/bayarea/article/Family-Fortunes-Gujar... [3] https://en.wikipedia.org/wiki/Gujarati_Americans https://en.wikipedia.org/wiki/Gujarati_Americans
hogFeast 7y ago
It is very hard for them to get loans. Paying in cash or getting vendor financing from the seller (particularly if they are extended family/kin) is common. Most migrant communities in the US (and outside) have parallel banking systems (for example, there is a completely separate Chinese banking system in the US...this is a function of domestic Chinese banks not having huge operations outside China, it is more common for migrants to deal with branches from their home country though). I would also be somewhat cautious talking about Serbia. Everyone can accept that neither side covered themselves in glory. Let's just leave it there.
vageli 7y ago

deleted 7y ago

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adventured 7y ago

The secret to a great gas station business, is being not primarily in the gas station business, but in the higher margin food business. The Sheetz gas station chain along the US east coast for example has a wildly thriving business and is demolishing every other gas station in its path. ~25 years ago they started doing things quite different than all the other competition and it has led to them building out hundreds of locations. They're up to $7.5 billion in annual sales now. It's all built around great locations (of course) and the margins in their food making business. They did touch screen ordering kiosks as early as any other major food-related chain in the US, and 20+ years before McDonald's deployed them widely. The gas merely draws traffic, there's no serious money in that part of the business.

llrando 7y ago

If you know anything about Seattle it can be pretty easily implied what his business actually is doing. He buys gas stations in "up and coming" parts of town with high traffic and makes them safe by driving out the undesirables thereby increasing traffic from the wealthier residents who don't want to be hassled. Seattle has become big and increasingly unsafe so businesses that can provide a sense of security for their customers provide an increasingly better value proposition.

kyrieeschaton 7y ago

The actual secret is low cost of capital and low labor costs, probably both in violation of various labor / tax / finance laws and regulations. This supposedly gave him free cash flow to invest in capital improvements. "in 1998, he scraped together the $75,000 down payment, much of it from family and others in the local Egyptian community" "One key factor: Said staffed his new location with fellow immigrants from his church, Saint Mary Coptic Orthodox Church in Lynnwood" "with the help of a broker — another member of the local Egyptian community — Said got a loan and closed the deal" "Mainly, Said checks in with his managers and staff, many of whom are Egyptian immigrants looking for their own start in America. Many are referred to Said through his church or the local Egyptian American community; some hear of Said even before they leave Egypt."

darksaints 7y ago
None of those examples are illegal, and the presumption of criminality based on circumstantial evidence, especially in the case of a minority immigrant, looks far worse for you than it does for him.
- lotsofpulp 7y ago
  I have done business with many immigrant groups, and I have no qualms assuming small businesses employing recent immigrants who aren’t fluent in local English are not following labor laws. Easiest ones to break are salaried “managers” that work 7 days a week manning gas stations.
- kyrieeschaton 7y ago
  We have copious experience with this exact business model going back decades over several economic sectors and it's not hard to see where the structural cost advantages come from. If you are, eg, properly accounting for below-market loans as income (on either side), or rigorously following overtime requirements, or equal opportunity laws, your cost advantages rapidly go away. "Maybe we make the stores nice" is not some groundbreaking innovation.
  - 7y ago

aresant 7y ago

Scaling a location based workforce that the owner is visiting once a month and maintaining quality standards is hugely impressive. As the article explains the owner is drawing his HR from the Egyptian immigrant community. As such I think the “secret” of success in this tale is the unique funnel he has developed to find motivated, highly responsible, and respectful labor. Which is almost impossible to find in the US at this point with employment reaching all time highs. Good lesson for anybody that thinks the “buy and improve” strategy is going to come from giving a near minimum wage worker a playbook and checking in once a month.

cushychicken 7y ago
>As the article explains the owner is drawing his HR from the Egyptian immigrant community. And good for him, too! He deserves to be incredibly proud of the work he's done. I can imagine that the two-hundred-odd employees he has hired represent just a fraction of the people he's positively effected - especially if they are Egyptian immigrants. Many of them likely brought their families to the US as well. I'm incredibly proud to be an American, hearing stories like this. (Unfortunately, that's in spite of our current administration's attitude towards immigrants. Let's hope that next election manages to turn that sentiment around with a new candidate.)
- dionian 7y ago
  If he immigrated legally, I'm not sure the current administration has done anything to hurt him
  - drharby 7y ago
    The fact that this is downvoted and the parent's is not for speaking down on the current admin smells of a bias. I'll save face by saying I think the administration is adverse to many people's lives
  - luckydata 7y ago
    As a naturalized citizen of the United States I can tell you with good knowledge that.you have no clue what you're talking about. The Trump administration has made legal family reunions a lot more complex and time consuming than it used to be. Many other issues too that it takes just a little googling or some good faith to discover. That's not even going in the stories of American citizens arrested for speaking a foreign language and not being released for months. https://www.latimes.com/local/lanow/la-me-citizens-ice-20180427-htmlstory.html https://www.latimes.com/local/lanow/la-me-citizens-ice-20180... Saying this kind of stuff at this point is not morally neutral, you're actively abiding an inhuman and monstrous regime that's killing people out of bigotry and greed, you should be ashamed.

JustSomeNobody 7y ago

Focus on customers and employees and have pride in your product. Now there’s a lesson modern business could learn. It’s not about returning all profit to the wealthy investors.

kyleblarson 7y ago

His is certainly an impressive story, but you also have to account for the fact that a lot of the neighborhoods in which he owns gas stations have seen massive inflows of money from Seattle's insane growth in the last 25 years.

KoftaBob 7y ago

As a fellow Coptic Egyptian, I can tell you that his ability to directly source talent from Coptic Churches in the area is a huge advantage for him. Just like how warm intros in the VC world signal that the person making the intro can vouch for them as trustworthy, a similar benefit is had when sourcing employees from a tight knit ethno-religious community. If he hires them to manage a gas station and they steal, cause problems, or anything like that, the community will know about it and their reputation will suffer.

vageli 7y ago
> If he hires them to manage a gas station and they steal, cause problems, or anything like that, the community will know about it and their reputation will suffer. Further, the family's image becomes tarnished to an extent in the eyes of the community, and family is often a powerfully reinforced social structure in immigrant households (my own included) with the ability to compel action.

appleshore 7y ago

Most gas stations seem offensive and predatory in the items they offer customers. I understand freedom of choice and business models but the entire system is plagued by unhealthy and potentially dangerous products (eg random herbal supplements, synthetic cannabinoids etc). And more than half of gas stations in major cities don’t have bathrooms (people abuse them obviously). And the workers are often underpaid. Verse a system that offers fair pricing, healthy options, positive re-enforcement, incentivizes public facing employees to learn CPR and first aid, paying higher wages to help upward mobility and savings, creating a place for community interaction. Nope, it’s just sugar, cigarettes, “rhino” pills, alcohol, mistreated underpaid employees living a fraction of their potential, dirtiness and no bathrooms.

driverdan 7y ago
> Most gas stations seem offensive and predatory in the items they offer customers. Convenience stores sell what customers want. If those items didn't sell or customers had a preference for something else then they'd change. > And the workers are often underpaid. No such thing. So long as someone is willing to work for a certain wage they're getting paid exactly what they should be.
- atonse 7y ago
  Found our Robber Baron mentality right here. Nobody is "willing" to work at an un-livable wage. Forced is probably a better term. Not forced by their employer, but by circumstance.
  - strathmeyer 7y ago
    Gee if the wage is un-livable how are they surviving?
    - mschuster91 7y ago
      Working two or more jobs and/or being subsidized by government assistance (food stamps, or in Germany Hartz IV).

ossworkerrights 7y ago

This seems like a recipe for success that can be applied in some east european countries still lagging behind the rest of the eu: take old and run down shop in areas with a good potential, provide kick ass services and improve the look and feel of things.

mschuster91 7y ago
> in areas with a good potential You won't have much of these in (South) Eastern Europe. There is a massive brain drain towards Western Europe... every shop needs customers with spare money to go shopping and that's hard for anything that's not absolute necessities when all working-age people from the area went off to greener grasses. Originally that was the reason why the EU introduced various funds to improve life/economy in the poorer regions... while for some regions it worked out decently, many others had all the money sucked off to corruption. Between 2013 and 2017, for example, at least 1.5 billion € in development funds were wasted (https://kurier.at/politik/ausland/betrug-mit-eu-foerdergeldern-die-aufdecker-haben-kaum-eine-chance/400496758 https://kurier.at/politik/ausland/betrug-mit-eu-foerdergelde...).
- ossworkerrights 7y ago
  Yeah having been back to Romania for a while now I think the article is a gross understatement of the amount of fraud and poor investment choices surrounding EU funding. However, the country is undergoing a massive bubble at the moment, and most areas appear to be undeserved or served by low quality services. By following the example of this Egyptian guy, one could really make a difference and turn a nice, clean, profit in here.

CalChris 7y ago

I drive an EV so I haven't been to a gas station in years, maybe a decade. However, I think gas stations, maybe this guy, could better serve EVs. First, we're going to be at a charging station for about a half an hour. In fact, limit us to half an hour. Provide an L3 QC so we can charge. Air so we can top off our tires. Wiper fluid. WIFI. Got a Tesla, CHAdeMO or SAE? Great, we have an adaptor for that. Brownie points for a vac, garbage and recycling. Charge a flat rate, $20 (?). Got a Tesla? It goes on your account.

aazaa 7y ago

Bogus Norton Security nonsense. I'm outta there.

scarejunba 7y ago

The magic here is he leaned on his community to everyone's benefit. This is a thing immigrants easily do in America and it's a massive competitive advantage. It works even for non-business. Immigrants will lend each other money for mortgage down payments, cars, exercising options, investments, cover expenses until long term cap gains, etc. in amounts most Americans would balk at. Easy six figure sums with no real collateral. If the investment pays off or whatever, the person loaning doesn't get a percentage or anything like that. All they get is what they already have: continued access to the accelerator net. I honestly think there is a cultural silliness in America about soloing it. Everyone who really makes it in America does so in a team, or because their parents boosted them, or whatever. Very few solo. But the dream in America is you do things yourself. The cultural bias towards "paid my way through college", "moved out at 18", "built it on my own with no help from anyone" is a powerful meme but does not confer benefit on the organism holding it.

lotsofpulp 7y ago
> I honestly think there is a cultural silliness in America about soloing it. All tribes that have high trust between them eventually lose it as they economically advance. The high trust between tribe members is required while the tribe members need each other, but once a sufficient number of tribe members become self sufficient, the tribe starts changing into different groups, usually along socioeconomic lines. Rich people lend and invest with each other all the time. See all the companies where a kid gets funding from his parents friends. But they no longer identify with the immigrant tribe. I have watched this play out in my lifetime. When everyone in my parents’ immigrant group was poor, everyone was there for everyone. As the decades went on, some families became very successful. Their children no longer associate with the less economically successful families, but they do with those like them. They go on vacations together, golf, invest in businesses together. But the new members of the tribe still immigrating will not get any support from them.
- scarejunba 7y ago
  Yeah, the crucial loss is that poor and middle class Americans just generally have no tribe. They also worship this as a source of strength when it's clearly a source of weakness.

jeffdavis 7y ago

"With oil prices then near historic lows, oil refiners were desperate for dealers who could move more volume." Isn't this zero sum? If one station doesn't sell the gasoline, another will, right? Why does the refiner care who sells it?

taftster 7y ago
Somewhat. Shell is probably trying to position themselves against their competition. Yes, it's probably near zero-sum game, but there's still competition between the various oil companies, etc. So by having Said take on more stores (due to the quality and volume he proved) means that Shell could take a bigger piece of the pie.

cosmodisk 7y ago

I don't drive so I rarely step into a petrol station but whenever I do it's almost always: wtf?? It's like most operators try to make them as inconvenient as possible.Poor selection of products on shelves, toilets often not clean/locked,etc. No wonder this man is so successful.

616c 7y ago

It is so random the Egyptian-related posts that come up here! The irony here is that most of these principles Sami Said uses are not applied in Egypt and I doubt they would work quite the same. Most gas stations for normal, working class people are dirty and IIRC many do not have convenience stores at all. Kiosks are on almost every street corner, so the gas stations would be wasting their employee time as everyone else, car or not, can find those way more easily. The one exception in upper class neighborhoods and the ring roads that lead between Cairo and major cities, and the gas station rest stops, which have been cleaned up/modernized a lot since my first entry into Egypt in the middle of the last decade. The new cleaner gas stations started showing up then, but now I see many more of them when traveling between cities or the rich/expat-accommodating neighborhoods of Cairo proper (Zamalek, the fancy parts of Ma'adi, et cetera) all of them with On the Run convenience stores. After reading this I Googled, only to discover that is the import of an international chain, Exxon! https://en.wikipedia.org/wiki/On_the_Run_(convenience_store) https://en.wikipedia.org/wiki/On_the_Run_(convenience_store) So beyond hiring other Egyptians (this is not surprising for Americans who see this with many different immigrant communities, a lot have pointed this out already), not sure why his being Egyptian is an important detail. It sounds like a common American immigrant story to me. This is usually where I make a joke about Neo-Orientalism (perhaps double funny since it is an Egyptian person with gas stations), but the article is pretty germane so what can we really say? lol

wahern 7y ago

> In urban areas like Seattle, the best locations for gas stations — along busy arterials — are also the best places for apartments, which are far more profitable. There's a gas station at the corner of Fort Meyer and Nash St in downtown Arlington, VA which sits beneath a church. It looks like it was built purposefully that way. I don't see why you couldn't build one under an apartment building[1], especially a modern one that can handle fumes, etc. I mean, we build residences above much worse stuff today (e.g. the chemical fields created during Silicon Valley's heyday and which now sit beneath many new residential projects), and both gasoline and cars are far cleaner now than when that building was originally constructed. I wouldn't be surprised if there are already many locations like that, in the U.S. and elsewhere. [1] That's how I remembered that gas station--as sitting below an apartment building--but looking on Google Maps it must've been a church all along.

carltonbanks 7y ago

At the risk of sounding pedantic, “former Egyptian engineer” sounds like he stopped being Egyptian at some point. Shouldn’t it be Egyptian former engineer?

rmason 7y ago

It's remarkable how unfriendly large gas stations have come to be. Locally all our Speedways have added TV's at the pumps that play Speedway commercials non-stop. They're all out of sync and it gives you a headache to listen to all of them. It annoyed me so much that I did some googling and I figured out how to turn down the volume ;<). But they had a software update and my little trick no longer worked. But the TV's didn't increase store sales so you know what they did? They cranked up the volume to an ear splitting level;<(. It's almost as if they're trying to drive customers away.

latchkey 7y ago
The faster you get your gas and go, the quicker the next person in line can get their gas. Imagine all the people who see a full gas station and keep driving knowing they could get gas later when the station is less full. Gas stations almost need to appear empty at the pumps.

duelingjello 7y ago

Reminds me of an improvement on the advice by good old Felix Dennis: Nice (fake) flowers can do as much or more for decor than antique lawyer or designer furniture.

jiveturkey 7y ago

Most interesting. I wouldn't have thought any of those little details matter, so I guess I am not representative of the market. I never shop at the gas station convenience store (unless traveling and in need of water). I pick a gas station solely on convenience factor, ie closest to me on the correct side of the road. The only criteria I have is that I do not use gas stations (Arco) that have central payment islands vs pay at the pump. I'm pretty amazed anyone cares what gas station they go to, and actually pick one over another.