Think Your Profit Margins Are Bad? You Could be a Gas Station Dealer
NEW YORK CITY — Financial information firm SageWorks points out despite the high price of gas, just how little gas station dealers (franchisees) make on pumping gas compared to all other types of private companies.
The average private company is making roughly eight cents of profit for every dollar of revenue brought in," says SageWorks' Libby Bierman. "The owners of privately held gas stations, however, are making less than three cents for every dollar," declares the analyst. "In fact, for at least each of the past ten years, the industry has had a net profit margin of less than 3 percent, at times as low as 1 percent. Those are slim margins for gas station owners to work within, and any unexpected expense could be crippling to their income statement. To make money, gas stations must rely on volume of sales like your typical grocery store. While it may seem like the price of gas is high, it isn't the case that the extra money consumers are paying is passing through to gas station owners as profit."
According to Sageworks, Inc., private gas stations in 2012 made less than three cents of profit for every dollar of revenue received.