More Plant Shutdowns

[Ryan Wright]

I fill up at a little bitty gas station located a couple of miles from
my house. They only have four pumps and when I roll in, I block two of
'em. They don't mind, of course, since the fuel flows like a flood as
long as I'm parked there. Their prices are consistently 5 to 10 cents
cheaper per gallon than everywhere else. In fact, the local cops
"suggested" he raise his prices and generally harassed him for
"causing" traffic jams in front of his store by offering such low
prices.

Not sure how he does it. I always hear how gas stations operate on a
penny per gallon margin at best, but this guy has been profiled in the
local paper and claims that's BS and that he is still making a profit
at the lower price point. There doesn't appear to be anything wrong
with his fuel or any shenanigans going on, I've filled up there twice
now and haven't had any problems.

-Ryan

On Tue, Apr 22, 2008 at 4:16 AM, Dorn Hetzel wrote:
>
> The local Love's truck stop here in Hogansville was $4.149 yesterday "cash"
> price.
>
> The odd thing with loves is the diesel pumps on the "car" side give the
> "cash" price when I use my credit card, but the pumps on the "truck" side
> differentiate.
>
> So I fill up on the "car" side. Only annoying thing is only $75 per card
> swipe...
>
> Dorn Hetzel
> 77FC35
> Hogansville, GA
>

[Don Bradner]

Ryan, this is much like Grocery stores saying they have margins around 1%

In neither case are they talking about gross margins, but rather net profits. A
lower gross margin with very high volume can produce net margins greater than
that of a low-volume, high-margin business. "Can" being the operative word - not
every discounter succeeds, by any means, but it is a workable situation for some
retailers, fuel or otherwise.

Flying J is a good example, but not particularly applicable in your
neck-of-the-woods because the FJ stations are Franchises rather than
company-owned. Elsewhere most FJs are company-owned and have lower prices than
those around them except where the competitors choose to price-match.

On 4/22/2008 at 10:25 AM Ryan Wright wrote:

>I always hear how gas stations operate on a
>penny per gallon margin at best, but this guy has been profiled in the
>local paper and claims that's BS and that he is still making a profit
>at the lower price point.

[Pete Masterson]

There are high franchise fees for the name brand stations, plus some heavy duty real estate costs if the land is owned by a third party. (Once looked into a gas station real estate "opportunity.")

If the 'little guy' is a no-name station and owns the underlying real estate, he may well be able to profit at a lower price.

I note that a station close by to me recently dropped their Shell identity -- and their prices went down by about 4 cents per gallon.

Pete Masterson

'95 Blue Bird Wanderlodge WBDA 42

El Sobrante CA

"aeonix1@mac.com"

On Apr 22, 2008, at 10:25 AM, Ryan Wright wrote:

I fill up at a little bitty gas station located a couple of miles from

my house. <snip>

Not sure how he does it. I always hear how gas stations operate on a

penny per gallon margin at best, but this guy has been profiled in the

local paper and claims that's BS and that he is still making a profit

at the lower price point. There doesn't appear to be anything wrong

with his fuel or any shenanigans going on, I've filled up there twice

now and haven't had any problems.

[Ryan Wright]

On 4/22/08, Pete Masterson wrote:
>
> If the 'little guy' is a no-name station and owns the underlying real estate,
> he may well be able to profit at a lower price.

That's exactly it. It's a tiny white building on a postage stamp sized
piece of land and it's labeled, "Corner Market." We call it Abu's. No
branding whatsoever. Fairly popular little place around here, there's
usually a line for fuel.

-Ryan

[Leroy A. Eckert]

In the 80's to mid 90's my independent truck stop grossed between 10
and 25 cents per gallon. I spoke with an independent operator a couple
of weeks ago here and that margin is now generally 10 to 15 cents
depending on which way the price is moving and how smart you are. So
there is room to reduce your gross margin 2-3 cents and make it up in
volume, and depending on how crafty you are in committing to forward
fuel if you have that capability one can make money and many time lots
of it. You also can get whacked.
However, consider the risk now. Based on 10c per gallon gross profit.
Includes all applicable taxes for simplicity.
Cost per load Now--7,500x$4.10=$30750--Retail=$4.199--Gross Profit=$750.00
Cost per load Then--7500x$.90=$6,750--Retail=$.999--Gross Profit=$750.00
I carried several hundred thousand dollars of receivables then on card
lock. That would be four times greater today with the same profit.
When would you have rather owned a truck stop? I am glad I am out.

Leroy Eckert
1990 WB-40 Smoke N Mirrors
Dahlonega, GA
Royale Conversion








--- In WanderlodgeForum@yahoogroups.com, "Ryan Wright"
wrote:
>
> I fill up at a little bitty gas station located a couple of miles from
> my house. They only have four pumps and when I roll in, I block two of
> 'em. They don't mind, of course, since the fuel flows like a flood as
> long as I'm parked there. Their prices are consistently 5 to 10 cents
> cheaper per gallon than everywhere else. In fact, the local cops
> "suggested" he raise his prices and generally harassed him for
> "causing" traffic jams in front of his store by offering such low
> prices.
>
> Not sure how he does it. I always hear how gas stations operate on a
> penny per gallon margin at best, but this guy has been profiled in the
> local paper and claims that's BS and that he is still making a profit
> at the lower price point. There doesn't appear to be anything wrong
> with his fuel or any shenanigans going on, I've filled up there twice
> now and haven't had any problems.
>
> -Ryan
>
> On Tue, Apr 22, 2008 at 4:16 AM, Dorn Hetzel wrote:
> >
> > The local Love's truck stop here in Hogansville was $4.149
yesterday "cash"
> > price.
> >
> > The odd thing with loves is the diesel pumps on the "car" side
give the
> > "cash" price when I use my credit card, but the pumps on the
"truck" side
> > differentiate.
> >
> > So I fill up on the "car" side. Only annoying thing is only $75
per card
> > swipe...
> >
> > Dorn Hetzel
> > 77FC35
> > Hogansville, GA
> >
>