Your gas station is now almost in full swing. You know that you’ve chosen a great business because there’s always a demand for fuel.
The market will never go dry, and recent research has proven this: In 2019, Americans used about 142 billion gallons of motor gasoline—or about 390 million gallons per day—and about 197 million gallons of aviation gasoline.
As with any type of business, you need to make sure that your establishment is ready before you start stocking inventory.
There’s plenty of jobbers that can supply fuel to you, but are you sure your gas station is ready to take on the task?
Before you start choosing a gas station supplier, you must consider these 5 factors first. This is a long-term business. Having a solid foundation will make your business resilient to sudden changes in competition, pricing, etc.
1. Pumps and Tanks
Your pumps and tanks are what makes your business a gas station. The business will not operate without these. Things can be a little more complicated if you’re just leasing them.
If you’re leasing a gas station that already comes with these, you need to add an overhead expense for the lease itself. You also need to understand the history behind these pumps and tanks. Did they go through a lot of repairs before? Are they compliant with the current regulatory requirements?
Covering this base first before looking for a jobber will help you determine how much more you’re willing to spend on this investment.
2. Understand the Risks
There may be some advantages of owning a gas station business compared to other types. However, there are some risks that are quite unique to this type of business as well.
Your success will be largely based on the amount of traffic that goes through your area. Study the trends of the area, specifically future construction projects.
A building construction may bring a lot of profit in the future. However, accessibility to your business will be negatively-affected during the time the roads are closed for construction.
This will also affect how your wholesale fuel is delivered to you, which may cause you to incur additional charges.
3. Environmental History
Even if you have an outstanding business relationship with your wholesale gasoline supplier, they won’t be of help if you get shut down because of an environmental issue.
You need to make sure that the land where your station sits on has passed environmental regulations. It’s best to have the underground property studied and sampled as well.
If what you have is a used gas station, make sure that any environmental litigation has already been settled.
4. Franchised vs. Independent
The initial investment for franchised gas stations is more costly. However, your brand recognition, including logos, trade design, etc., will help you receive customers faster.
Most of the time, you don’t need to look for a jobber as it’s already part of the franchise. You also need to adhere to a set quota for fuel sales.
Independent stations, on the other hand, offer more flexibility. Your choice of diesel fuel supplier or wholesale gasoline provider will be based on your budget, among other factors.
5. Qualities of a Good Petroleum Marketer
Knowing the qualities that you’re looking for beforehand can help you select a good petroleum marketer or jobber. Your jobber’s business history is one crucial factor. Their list of clientele also says a lot about how they do business.
You also need to consider what financing options you’re looking for. Jobbers offer different options and solutions for different clients. There are also those who offer rebates and incentives.
A petroleum marketer that has a history of offering these incentives are more likely to give you the same, based on your negotiations and deals.
A good gas station supplier is always up-to-date with the industry’s trends and economics. They can easily detect any fluctuations in the market price and let you know beforehand. Ask about their experiences with such situations to determine how knowledgable they are.
Choosing the Right Gas Station Supplier
When you choose your gas station supplier, it requires a lot of energy on your part. From negotiations to the actual deal, you need to have your mind clear of worries while these are taking place. You can easily approach this if you’ve got these 5 factors covered beforehand.