Fuel Volume Studies
by Kovra Pay Inc.
that oil companies actually use.

The closest fuel terminal is not always the lowest-cost supply point.

A terminal farther away can carry a rack price low enough to more than cover the extra freight. Where you buy fuel sets your cost on every gallon you sell.

From the field: I once saw fuel in San Diego run $0.30 a gallon below the rest of California for a full month. Stations as far away as Fresno could have trucked from there and still come out ahead after freight. I have seen the same thing with discounted fuel in Salt Lake City that could have been trucked to Reno.

Your study evaluates: terminal options, freight, and delivered cost.

Ask yourself: Do you know which terminals can reach your site, and what fuel costs at each one today?

A busy road does not guarantee gallons.

A 30,000-car road can underperform a 15,000-car road. Visibility, the left turn in, direction of travel, and the condition of the site decide whether drivers stop.

From the field: I have seen many stations that were one block from success. Some sat just off the road most people drive, so motorists never knew they were there. Others had large trees hiding the entire front of the site, while the station down the street had low shrubs and a canopy you could see lit up from a distance. One had brand new high-flow dispensers. The other still ran dispensers more than twenty years old. Drivers notice.

Your study evaluates: visibility, access, traffic direction, and customer mix.

Ask yourself: Can a driver see your canopy in time to make the turn?

The fuel brand can change the economics of the location.

Premium, value, licensed, and unbranded programs each bring different customers, costs, incentives, and obligations. On a street full of unbranded stations, a brand can let you set your own price instead of getting pulled into a price war. The right brand on one corner can be the wrong brand on another. We model the location, not the logo.

From the field: I branded an unbranded station selling 50,000 gallons a month to a major premium brand. Volume jumped to 100,000 gallons, then settled at a steady 80,000. That is the power of the right brand. I have also seen two stations with the same brand at opposite ends of the same street perform very differently, and it usually came down to the nicer facility, especially the restrooms. A traveler who finds a dirty restroom at a brand they trust will not stop there again.

Your study evaluates: brand fit for the site and the trade area.

Ask yourself: Are you choosing a brand because of the incentive check, or because of what it will do for your gallons?

Your competitor's street price does not tell you their margin.

Two stations posting the same price can earn very different margins. Rack price, freight, rebates, supply contracts, card fees, and taxes all differ. Copy a competitor's price and you may copy their losses.

Your study evaluates: competitor pricing and where your street price should sit.

Ask yourself: Do you know what your nearest competitor actually pays for a gallon?

Gallons and margin must be evaluated together.

Maximum gallons is not always the goal. Neither is maximum margin. The goal is the strongest economic position for this specific site, using the same risk-versus-return discipline used in investment management.

Your study evaluates: the price position that balances volume and profit.

Ask yourself: Do you know the price point where your site makes the most money, not just the most gallons?

This is not a real estate appraisal.

An appraisal tells you what a property is worth. It does not tell you the expected gallons, how a brand will perform, what your fuel will cost, or how competitors will respond. We evaluate a station the way a supplier's branding manager does.

From the field: I once saw a rundown unbranded station on a busy corner next to a highway. Buyer after buyer walked the site and passed because the price looked too high for the sales. I knew it was a good site, so I pushed for a premium brand. The brand came in, the site was cleaned up, and volume doubled. It also had a truck island the previous owners never marketed to truckers. Most buyers judge a station by its old numbers. The better question is what it could sell with the right brand, a clean store, spotless restrooms, and a well-trained staff.

Your study evaluates: the site as a fuel business, not just as real estate.

Ask yourself: Are you judging this site by what it sells today, or by what it could sell?

The least expensive time to discover a problem is before you build.

Know what the site is realistically capable of doing.

A study for a New-to-Industry build is $2,200. The station it evaluates costs millions.