Profitability in a retail setting can be a difficult feat to achieve, given the significant number of challenges managers and owners face to minimize costs and maximize sales. For convenience stores that integrate fuel sales, the challenge is exceptionally increased, as fuel represents one of the most volatile financial models in the industry. Razor-thin margins impacted by constantly shifting pricing can make it difficult to turn a profit without passing the overall costs onto consumers. In this blog, we’re going to dig into the challenges of managing fuel, and how a comprehensive fuel management system software solution can decrease costs for you and your customers.
Challenges in Fuel Management
Convenience store operations that include fuel sales in their business model open themselves to a number of risks and challenges simply by trying to manage fuel as a commodity. Let’s explore some of these challenges.
- Fluctuating Demand – As a commodity, fuel consumption is very difficult to anticipate and can vary greatly depending on numerous external factors. Influencing factors range from seasonal travel habits and economic conditions to weather events and market-wide pricing. Any of these factors can increase or decrease demand at the pump, and subsequently the price at the pump.
- Fluctuating Supply – National events, economic conditions, seasonal transitions in fuel processing methods, and other factors can all greatly impact the supply of fuel across markets. When events impact vendors’ ability to supply fuel or change costs of refinement and processing, this can greatly impact the pricing convenience stores are subsequently forced to pay, an increase they, in turn, must pass on to their customers.
- Government Compliance – As a highly regulated commodity, the sale of fuel requires a number of safety and monitoring standards to be upheld. This can result in costly equipment and time-consuming oversight on several fronts to ensure compliance with government regulations.
Fuel Management System Software Frees Up Resources
An effective fuel management software automates a number of processes and frees management up to focus on providing customers with a great experience.
Fuel management software is designed to integrate with pump systems in order to accurately monitor consumption patterns and then works with vendors to coordinate deliveries to ensure sufficient inventory is available at all times. Adequate supply prevents wild price fluctuations and keeps pricing at a sustainable market level.
Pricing of fuel is based on the cost from suppliers and can fluctuate somewhat relative to other retailers in the area. Fuel management software monitors supplier prices and coordinates orders to take advantage of the most affordable options on the market at the time of order. It can also monitor pricing across markets and allow managers to update pricing across their operation remotely, ensuring customers will always be paying the most affordable price possible.
By automating compliance reporting, fuel management software prevents costly fines, and in turn, prevents any additional overhead costs that could be passed on to customers through higher product prices.
Expert Fuel Management System Software
While fuel management can be a complicated affair, one that only offers convenience store operators a narrow window of opportunity to turn a profit, deploying the right tool can make all of the difference. Success Systems wants to make sure your fuel management solution is sufficiently automated to prevent any unnecessary spillover onto your customers at the fuel pumps or at your register. Explore our fuel management solution and contact us today for more information on how we can help keep your pumps flowing and your customers’ wallets happy.