June 21, 2021
There are many ways to run fuel businesses.
First things first. Running a fuel operation is a full time job. You have to make sure your tanks always have fuel to sell. You have to make sure that fuel sells. And you have to make sure that fuel sells at a margin that allows you to run the rest of your business, whatever that might be.
The ‘standard’ fuel operation covers more than just fuel though. For example, over 7,500 of the UK’s approximately 8.250 stations have a shop of some description on the site. This is one of the reasons that station owners and operators are known as retailers rather than oil traders; they run shops, too.
Within these shops is another full time job. Looking after staff, keeping the shelves stocked, reconciling that stock, serving the customers who come into the store and of course keeping them safe and happy during their buying experience. There are other facilities to consider too, if you offer them.
This is where the commission operator comes in. Many fuel companies (oil company and retailer) have opted to- in one way or another- outsource the additional work that comes with running a convenience store and focus on the fuel side of the business. This can come in one of many formats:
Am I forgetting one? Probably.
Whether you choose to operate the shop yourself or focus just on fuel, there are unique decisions and challenges that come with both. So, how do you make that decision and what are the benefits and problems that come with each?
Operating your own stores
Commissioning / consigning / licensing model
In conclusion, what you choose depends on your strengths and weaknesses. Are you a fuel company, a retailer or both?
Whichever it is, make sure you consider the above before making a decision.
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