gas stations

[gonebroke2]

[ QUOTE ]
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

[/ QUOTE ]

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.

[john voight]

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.

[dazraf69]

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.

[john voight]

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)

[dazraf69]

[ QUOTE ]
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)

[/ QUOTE ]

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.

[MrBlue]

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.

[Jimbo]

[ QUOTE ]
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.

[/ QUOTE ]

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

Jimbo

[Thremp]

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

[gordongecko]

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.

[Ps3tn0NcYk]

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.