You might be surprised to learn that behind the branded signs and the shiny exteriors, that about 59% of all convenience stores selling fuel are actually independently owned and operated. While they might maintain a branding contract with the company you see on the exterior, they themselves are responsible for the day to day operation, which includes maintaining fuel supplies. Fuel station automation tools from Success Systems offer convenience store owners the best services for the best price to improve their automated efforts; all on a cloud-based digital platform.
You might be even more surprised to learn that the fuel you get at the unbranded store down the road is of the same quality and meets all federal requirements – at the branded locations you’re paying for a proprietary blend additive, but that’s it. In both cases, fuel retail operators are responsible for their own profitability and ability to meet demand. Each approach has benefits and drawbacks. In this article, we’ll discuss the use of fuel automation as well as fuel management solutions and how our services benefit each approach.
Fuel Station Automation Tools & Services
Independent gas station operators need convenience store management tools with real-time data insights to support their operation. Whether it’s a software to manage product, fuel management software solutions, or the systems necessary to support the use of these tools with limited input from the operators, these are all vital components in a successful fuel retailer’s repertoire.
Success Systems’ family of retail software products are designed to add automation throughout your operation, allowing owners and operators to focus their efforts on the rest of their operation, ensuring profitability in the face of a challenging business model.
Licensing Agreements with Fuel Suppliers
Consumers generally have their preferred brands, and fuel is no exception. A retailer can benefit from licensing with a branded concept in that it creates an instant stream of loyal customers with little marketing effort on their own part, a crucial benefit for an independent operation where profits are already cut into with licensing fees. Roughly 11% of consumers name fuel brand as the driving factor in making a fuel purchase.
An added benefit of the licensing agreement is that the parent company ensures access to fuel product during times when demand exceeds supply. There is the added benefit that guaranteed supply will help smooth pricing fluctuations and reduce market volatility.
Suppliers also provide licensees with retail best practices and training and development tools, as well as provide capital expenditure support to maintain the image of the operation and thus protect the brand. In exchange, the branded retailer must purchase only from approved fuel suppliers and sell minimum volumes of products at set pricing. These arrangements are generally established in contractual agreements that can last 3-20 years.
Unbranded Retailers Enjoy Lower Wholesale Fuel Costs
Unless there is a supply issue at the market level, unbranded retailers tend to pay lower wholesale costs as they don’t have the added overhead of paying for branded and proprietary fuel additives. They have the freedom to enter into supply arrangements with branded operations and sell the fuel as unbranded, giving them a bigger margin of profitability.
Unbranded operations generally maintain the cheaper, unlicensed approach when they feel that their local-level brand recognition outweighs any national brand loyalties that might exist in their market. However, unbranded operations are the first to lose access during periods when market supplies are limited, forcing them to see out more expensive wholesale solutions.
Success Systems Fuel Management & Other Back-Office Solutions
Success Systems is the most recommended store automation solution for independent retailers in the industry.
We cover all the critical aspects of controlling and managing gasoline retail, convenience, grocery, tobacco, and liquor stores. Our customers have increased store profits by as much as 50% by adding intelligent automation of their back offices. Contact us today to schedule a free demo of any of our services.