Five Myths about Owning a Gas Station or Convenience Store
By Richard Parker: President of The Resource Center for Buying a Gas Station/C- Store™ and author of How To Buy A Good Gas Station/C-Store At A Great Price© .
There are lots of common misconceptions about what it means to buy a gas station or buy a convenience store.
Let’s take a look at each of them, so you can make a more informed decision before moving ahead with your purchase.
Myth #1: Rising gas prices mean that you will make a lot more money on every gallon of gas that you sell.
Sadly, this is bunk. Even though gas prices have been surging, those price increases have not impacted the pool margin (profit per gallon) that station owners make. Most stations most still make 12-15¢ for every gallon of gasoline they sell – just like they did 10 years ago. (Remember that credit card fees and other expenses eat into that pool margin too.)
Myth #2: People are going to stop buying gas when it gets too expensive.
Not soon! To date, rising gas prices have not caused consumers to cut back – except for “sticker shock” periods when recent price increases cause them to reduce their driving temporarily. So gas sales have been, and should continue to be, relatively immune from any long-term slumps due to rising prices.
Myth #3: Any economic downturn will make people stop driving and buying gasoline.
Unlikely! Gasoline sales are relatively recession-proof, because gas is a necessity for most consumers. People might carpool to their jobs or cut back on the amount of vacation driving that they do, but they still need gas to work, shop, pick up their children at school, etc. So economic woes will not translate into dramatically slumping sales for owners of gas stations.
Myth #4: Fuel-efficient cars will blow the bottom out of gasoline sales.
Not happening anytime soon. To date, fuel-efficient cars have had a negligible impact on gas station profits. And the reason is clear: the majority of cars on the road still fall well short of the gold standard of 30 MPG or more. Back in 1992, the average fuel consumption for a car on America’s roads was 21.0 MPG. At present, the latest statistics indicate that figure had risen to only 22.9 MPG. (Those statistics are from the U.S. Department of Transportation.) So clearly, car makers’ claims about astonishing fuel efficiency are lagging behind reality.
Myth #5: Fuel-cell cars and other innovations will make gas stations disappear.
These innovations will make gas stations change, but not disappear. Existing gas stations – like the one that you buy - will be converted to serve as distribution points for alternative fuels, quick electrical charging and other “fuels of the future.” As you have noticed, ethanol-enhanced gas is being sold at the same stations that sell regular petroleum-based fuels. So your station will be part of the distribution networks of the future – and not cut out of the action. Why would Petroleum companies build whole new distribution systems for new fuels, when they already have distribution networks in place? That would make no sense.
In summary . . .
Don’t let myths and well-intentioned advice distort your view of the benefits and hazards of buying the gas station/convenience store of your dreams! You need the solid, realistic advice you’ll find in our complete guide, How to Buy a Good Gas Station/Convenience Store at a Great Price.
This article represents a fraction of what you’ll learn in How To Buy A Good Gas Station/C-Store At A Great Price© - the most widely used reference resource and strategy guide for anyone thinking about buying a gas station. Read a detailed listing of what you'll learn.