gas stations
 

My dad owned two gas stations in MD for twenty years. He did very well and retired in comfort. Where I live in NJ, you would be extremely hard pressed to find a gas station where any of the workers or owners speak proper english. I am wondering why? Are gas stations that unprofitable that only recent immigrants would buy them ?

Re: gas stations
 

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My dad owned two gas stations in MD for twenty years. He did very well and retired in comfort. Where I live in NJ, you would be extremely hard pressed to find a gas station where any of the workers or owners speak proper english. I am wondering why? Are gas stations that unprofitable that only recent immigrants would buy them ?

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maybe recent immigrants are so cheap that they increase the profit margin to the owners...

Barron

Re: gas stations
 

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My dad owned two gas stations in MD for twenty years. He did very well and retired in comfort. Where I live in NJ, you would be extremely hard pressed to find a gas station where any of the workers or owners speak proper english. I am wondering why? Are gas stations that unprofitable that only recent immigrants would buy them ?

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maybe recent immigrants are so cheap that they increase the profit margin to the owners...

Barron

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The owners are recent immigrants as well...

Re: gas stations
 

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My dad owned two gas stations in MD for twenty years. He did very well and retired in comfort. Where I live in NJ, you would be extremely hard pressed to find a gas station where any of the workers or owners speak proper english. I am wondering why? Are gas stations that unprofitable that only recent immigrants would buy them ?

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maybe recent immigrants are so cheap that they increase the profit margin to the owners...

Barron

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The owners are recent immigrants as well...

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hmmmmm

All the chinese restraunts around here are owned by asians too. (my wife is Chinese, no racist ban please)

What I'm trying to say, is just because a particular group owns/invests a lot in specific area, I don't think you can determine if it's profitable or not.

Re: gas stations
 

I think there's a law of some sort that allow an immigrant to run a small business tax free for like 3 years or something. This gives them an unfair advantage. Then after the 3 years they "sell" it to their brother or something then he gets to run it tax free for 3 years.

Re: gas stations
 

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My dad owned two gas stations in MD for twenty years. He did very well and retired in comfort. Where I live in NJ, you would be extremely hard pressed to find a gas station where any of the workers or owners speak proper english. I am wondering why? Are gas stations that unprofitable that only recent immigrants would buy them ?

[/ QUOTE ]

maybe recent immigrants are so cheap that they increase the profit margin to the owners...

Barron

[/ QUOTE ]


The owners are recent immigrants as well...

[/ QUOTE ]

hmmmmm

All the chinese restraunts around here are owned by asians too. (my wife is Chinese, no racist ban please)

What I'm trying to say, is just because a particular group owns/invests a lot in specific area, I don't think you can determine if it's profitable or not.

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Thats the funny thing, they arenat all the same nationality....some arabic, some indian, some easter european, some african...etc...

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Gas stations, liquor stores, delis have always been businesses dominated by immigrant owners. It is much easier for them to get into these type of businesses than into something that requires more training or education. Some of them come to this country with nothing, get a hard money loan from family members/friends or people from the same nationality and then buy these businesses. It has been like that for decades.

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i always just thought this was because it is a less desireable business to own than most others.

if you, an average american, had the choice to buy a gas station/convenience store/liquor store/etc., or basically any other type of small business, what would you choose?

maybe i'm wrong, but i think this defintely plays a major part of it.

tc

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nah taylor, I think you are right. These businesses strike me as simple to run, yet require alot of hard work. Meaning, you dont need to understand local customs or buying habits or marketing, yet you will probably need to put in a lot of physical work. Perfect business for a foreigner.

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i always just thought this was because it is a less desireable business to own than most others.

if you, an average american, had the choice to buy a gas station/convenience store/liquor store/etc., or basically any other type of small business, what would you choose?

maybe i'm wrong, but i think this defintely plays a major part of it.

tc

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I'd take the liquor store and it's not even close.

Re: gas stations
 

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i always just thought this was because it is a less desireable business to own than most others.

if you, an average american, had the choice to buy a gas station/convenience store/liquor store/etc., or basically any other type of small business, what would you choose?

maybe i'm wrong, but i think this defintely plays a major part of it.

tc

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The problem is that a lot of educated people would never work in a liquor store or gas station because they think it is degrading. Little do they know that the guy selling cigarettes and beer is making double or triple what they make working in their cubicle. Although you do have to factor in the longer hours and risks involved in owning those type of businesses.

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how do you know who owns it?

stores could easily be leasing the buildings, so the owners pretty much get free money for little to no work.

gas stations on the other hand IDK; i cant see an owner working it unless you are somewhere in the middle of nowhere.

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One thing to consider is the number of times these stores get robbed. Much like other positions dominated by immigrants, a corner store/gas station is an undesirable position due to its hazardous environment. Foreigners are willing to risk this as they are more accustomed to making sacrifices and risking their lives.

I do not want to get in an argument about "Americans making sacrifices" please, so take it for what its worth. My brother owns a gas station, and some of the family friends. Most average Americans would not put up with what it takes to make these types of places successful (long long hours and high risk). Much like they would not work farms like the Mexicans do in the US. This is the reason for certain fields being dominated by particular sub groups.

Re: gas stations
 

well you can own the business, but make someone else work at it. (like in any business).

you suffer a chunk in profits, but you gain a huge amount in terms of $return/work (you work 95% less, but dont suffer 95% less profit)

Re: gas stations
 

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well you can own the business, but make someone else work at it. (like in any business).

you suffer a chunk in profits, but you gain a huge amount in terms of $return/work (you work 95% less, but dont suffer 95% less profit)

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Its a little more complicated than that IMO. For example, the profitability of a gas station is based on growth of the particular area you are in combined with purchase price. With todays high gas prices, people are willing to make go a greater distance to find cheaper gas. So the competition bewteen gas stations tends to strain profit. For every one suceesful gas station, you can find a dozen on the verge of bancuptcy. And despite popular belief, high gas prices are cutting into the profit's of gas station owners. One reason for example my brother is able to keep his head above water is that he only has one other person working with him. He essentially lives in the gas station. This cost cost by an enormous %. On the other hand, a family friend has about 23 gas stations that he started purchasing in the California area about 20 yrs ago.

So again, like any other business, there is a great deal to consider. Gas stations also do not have a high barrier to entrance which is one thing to consider. Hope that helped. I am not trying to discourage you from purchasing a gas station. Just things to think about.

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Liquor stores have a side benefit of being regulated which means only a limited # of licenses are issued. This limits competition because they usually won't issue you another license if there's already one operating across the street.

Re: gas stations
 

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Liquor stores have a side benefit of being regulated which means only a limited # of licenses are issued. This limits competition because they usually won't issue you another license if there's already one operating across the street.

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That is only true in a limited number of States. Not true in mine.

Jimbo

Re: gas stations
 

Something else randomly: Aren't the pumps typically not owned by the owner of the store or the land they are on?

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The bigger gas stations on the more busier corners almost anywhere that do the most volume are usually owned by a large, american based company. I think alot of it has to do with the work factor, but I really have no idea. I know where I am from it seems to be the shittiest, rundown gas stations with 15 year old pumps that are owned by indians etc.

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I have a question for those with experience in gas station economics.

Two blocks from where I live there is an intersection that experiences fairly heavy traffic during normal rush hours. The east-west crossroad is the main annex to a train station that provides 45 minute access to a major metropolitan city and, going the other direction, a major highway that also accesses said city.

At said intersection there are two gas stations kitty corner from one another.

One station is your typical corporate franchise -- a garage with one lift that seems to attract a reasonable volume of tire / oil changes, etc. and a small enclosed area housing the register and a trivial inventory of soda, snacks, cigarettes, etc.

Okay, now the interesting part.

The competing station is always two to ten cents more expensive per gallon, has a two car garage but seemingly does infrequent repairs (same two cars have been on the lift for over a year), has no food/drink in register area and, this is important IMO, on the vertical sign displaying prices and on the actual pumps, the former corporate owner's name is covered in duct tape. I've concluded that someone bought out a former corporate franchise and made it independent and instead of branding decided to just duct tape over any remnants of the old owner.

Note: this is not some rural / hick town. This is a affluent suburb within a 15 minute (assuming no traffic) drive from a major metropolitan American city and 2 minute drive from a major body of water.

So my question is -- how does the latter company remain in business? It is always higher priced than its competitor, it has no marketing/branding (just the opposite, if one takes into account duct taping over previous owners brand), it doesn't seem to do any "garage" work.

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Gas stations aren't as profitable now as they once were. Rising prices trim the profit margin enough, but almost every pumps is now equipped with a debit/credit card reader. This means customers are less likely to enter the store and buy other items with a high markup such as drinks and snacks. Plus the credit card companies charge the merchant a small % on every transaction. It's not much but when you're only making a few cents off each gallon it's more than one would think.

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The profit margin on gasoline is extremely low. That's not where you make your money if you own a gas station. The money is made in the convenience store, especially on cigarettes.

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Gas stations are generally developed and owned by large companies that lease the business portion out to small entrepreneurs. This is not always the case, but generally is. Gas stations are EXTREMELY expensive to develop and to buy gas station real estate is very very costly. A first generation immigrant could almost never afford to actually develop a gas station. Or buy one. They probably pay somewhere in the neighborhood of $25k-$75k plus a monthly rent to 'own' the business of running the gas station.

I don't really know if its profitable or not. My guess is that is way more profitable than many immigrants' other options, i.e., factory work, janitorial services, etc. Probably lots of work though too, which is fine if your other option is to make $8 at a factory some place.

Re: gas stations
 

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Liquor stores have a side benefit of being regulated which means only a limited # of licenses are issued. This limits competition because they usually won't issue you another license if there's already one operating across the street.

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Ever been to any kind of ghetto?

Re: gas stations
 

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Liquor stores have a side benefit of being regulated which means only a limited # of licenses are issued. This limits competition because they usually won't issue you another license if there's already one operating across the street.

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Ever been to any kind of ghetto?

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Ever been to another state?

Re: gas stations
 

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I think there's a law of some sort that allow an immigrant to run a small business tax free for like 3 years or something. This gives them an unfair advantage. Then after the 3 years they "sell" it to their brother or something then he gets to run it tax free for 3 years.

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[img]/images/graemlins/confused.gif[/img] [img]/images/graemlins/confused.gif[/img] [img]/images/graemlins/confused.gif[/img]

Re: gas stations
 

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The profit margin on gasoline is extremely low. That's not where you make your money if you own a gas station. The money is made in the convenience store, especially on cigarettes.

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ORLY? Retail markup on cigarettes is about 8%.. Cigarettes are the primary sales driver of convenience stores but not the most profitable product by itself.

BTW, I know an Iranian immigrant who owns a gas station in my home town and it is by far the best gas station/convenience store in town and the reason is that he is ALWAYS there and it's open 18 hours a day, 7 days a week. Additionally, the rest of his family works there at some point or another during the week and they do very well for themselves. I think it's a matter of extreme work ethic and they can make a lot of money when they don't have to pay somebody else to work there, plus gas stations/fast food restaurants/liquor stores have relatively low upfront costs compared to other types of small businesses and can be run more or less "by the book" with little need for advanced business knowledge.

Re: gas stations
 

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The profit margin on gasoline is extremely low. That's not where you make your money if you own a gas station. The money is made in the convenience store, especially on cigarettes.

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ORLY? Retail markup on cigarettes is about 8%.. Cigarettes are the primary sales driver of convenience stores but not the most profitable product by itself.


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A few members of my family have ran gas stations over the past 25 years or so and I worked at one when I was younger. Smokes were always the highest profit item in the store. While true that other items might have higher margins nothing sells in the store part in the volume that smokes do. On my shifts I'd probably sell a carton of smokes for every drink/chocolate bar sold and we did push them.

That said back when I worked there we didn't have the whole convenience store setup like a lot of places now. More like a booth with a fridge and some racks with candy/chips.

Re: gas stations
 

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The profit margin on gasoline is extremely low. That's not where you make your money if you own a gas station. The money is made in the convenience store, especially on cigarettes.

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ORLY? Retail markup on cigarettes is about 8%.. Cigarettes are the primary sales driver of convenience stores but not the most profitable product by itself.


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A few members of my family have ran gas stations over the past 25 years or so and I worked at one when I was younger. Smokes were always the highest profit item in the store. While true that other items might have higher margins nothing sells in the store part in the volume that smokes do. On my shifts I'd probably sell a carton of smokes for every drink/chocolate bar sold and we did push them.

That said back when I worked there we didn't have the whole convenience store setup like a lot of places now. More like a booth with a fridge and some racks with candy/chips.

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Yes, in volume it's true, I think something like 38% of all convenience store sales are cigarettes, I'm just disputing margins.

Re: gas stations
 

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The competing station is always two to ten cents more expensive per gallon

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One possibility is if the area has extremely high traffic 2-3 times a day, but low traffic other times they could be just raking in the 2-10 cent extra when there are very high amounts of traffic. If you consider that they offer no other services they are going to be able to funnel many more cars through their area just filling up.

On the other hand it could well be a front for a money laundering operation.