gas stations

[squashington]

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.

[mmctrab]

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.

[spex x]

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.

[David H]

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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?

[Thremp]

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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?

[Quercus]

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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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[JJSCOTT2]

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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.

[SanONeill]

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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.

[JJSCOTT2]

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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.

[tolbiny]

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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.