Gas profits at marinas

[sly_karma]

We've all seen those 'information' signs that gas stations post showing a pie chart of where the money goes when we buy fuel. Their thrust is that it's all filthy tax and the retailer is making maybe 3%. I just got the statement from the fuel distributor where I have an account. Typically for clear regular gas they are about 4-5 cents under street price in my area. The marked premium gas I put in my boat few days ago cost me $1.36/L. Both marinas in town are selling that fuel at $1.60/L, purchased from same distributor. Given the volume they go through, they may well be buying at a better price than I get. Even if not, that's a 15% profit, a lot more than the industry piously claims. I know marinas provide facilities that we all need at times, but I think I'll continue to fill my boat on land when possible.

 

[Busterbrown]

Ask other retailers in your area if they could survive on 15% margain...

 

[spring fever]

Hell you can survive on a 1% margin IF your volumes are large enough and your turnover is fast. Comparing one retailer to another retailer of a different type proves nothing-the logistics are way different-but if a retailer can charge 15% more than another profitable retailer of the same type because of a captive consumer then it is a fair question to ask!!

 

[Blackmax]

Complaining about paying a little extra at a marina versus the on land station seems silly to me, if you filled up at a marina for all your fuel you would pay maybe an extra $100.00 a year? When I go to Silva Bay or other places I purposely fill up even if I don't need it to support the existance of these places.

 

[Sasquatch]

Most land based gas sales retailers make the majority of their profit on high margin store items. It's generally the convenience store that is profitable, not the gas sales. Marinas don't usually have the traffic to support that kind of convenience store sales.

As far as surviving on 1% margin, I'd be interested to see a statement from the successful business that survives on that.

 

[Chuck]

Most land based gas sales retailers make the majority of their profit on high margin store items. It's generally the convenience store that is profitable, not the gas sales. Marinas don't usually have the traffic to support that kind of convenience store sales.

As far as surviving on 1% margin, I'd be interested to see a statement from the successful business that survives on that.

No kidding!! Even 15% for that matter!

 

[Busterbrown]

Hell you can survive on a 1% margin IF your volumes are large enough and your turnover is fast. Comparing one retailer to another retailer of a different type proves nothing-the logistics are way different-but if a retailer can charge 15% more than another profitable retailer of the same type because of a captive consumer then it is a fair question to ask!!

I am not sure what business model you use ,however I can tell you that my payment processing fee is more than 1%.How many turns of my inventory do I need to make it happen????

 

[Pippen]

Do they have additional costs (insurance) which may be environmental based given they are on the water?

 

[pescador]

The marine gas business is very cyclical. I doubt anyone is getting rich in BC running a marine fuel barge. I always make an effort to use Marina gas whenever its possible. IE if I travel to Nootka, I want those guys surviving so I always buy my fuel for trips there at Critter Cove. 15% isn't unreasonable in my view at all.

 

[spring fever]

I am not sure what business model you use ,however I can tell you that my payment processing fee is more than 1%.How many turns of my inventory do I need to make it happen????

Guys read the quote!!!-it was not aimed at any specific business-just a statement of fact-if you do huge volume then sometimes a margin of 1% can produce huge profits-it wasn't even aimed at gas stations-every business needs profit margins to survive-depends on your type of business
what margins you need.

 

[ziggy]

No kidding!! Even 15% for that matter!

Aren't we talking 18% in this case? Not sure what regular retail markup is to be profitable, but in most cases 18% seems pretty good?

 

[dougthefisher]

A lot of goods are marked up 100% and more. depending on what it is. things like cell phones are marked up less because the money is in the service not the device. groceries are about 20%. a lot depends on your market and overhead costs. gas itself it seems is only 3 or 4 cents a liter.