Gas Runners

A few days ago, I was driving home and saw a couple of gas stations with different gas prices.  The one station’s prices were “cash only”.  It got me thinking about a couple of things.  First off, I thought that there isn’t any incentive to go to a cash-only station if the prices are practically the same.  I wondered if it was a desperate concession for the station owner to implement surcharges for credit cards.  This led me to consider gas stations as a whole business.

With any business, you have income and expenses.  You can play with these elements in any possible way to create profit, that is, more income than expenses.  When you are selling gas, you have one income source – gas sales.  You would have many, many expenses – licenses, maintenance, labor, taxes, utilities, and on and on.  One of those expenses would be credit card processing fees.  Like I said, play with these sources to create profit.  Eliminate CC fees and you may make a profit, or more of a profit.

With larger gas stations – ones with integrated convenience stores – you would have multiple sources of income, including food/merchandise sales and possibly lottery ticket sales commissions.  Your other expenses may go up too, but we all know that buying anything from a convenience store is not the cheapest choice.  You are paying dearly for the convenience.

So, by having the C-store, your profits from one sector can offset the expenses from the other.  You can absorb the CC fees because your C-store sales are subsidizing them.  This made me wonder how gas stations could even survive without solid c-store sales.  Maybe this is why they have to sacrifice CC processing.

So now, on to my idea.  You have a gas station with customized gas pumps.  The pumps have a large touchscreen that performs as a kiosk.  After you swipe your card to activate the pump, the screen allows you to purchase items in the store.  Within the store are one or more “runners” that will pick and run the items out to you at the pump.  That’s it.  A simple idea.

But more than just simple, this is an improved form of convenience – you don’t even have to go inside the store.  You don’t have to run your credit card twice – your gas and purchases are combined on one receipt.  The store doesn’t even have to be customer-accessible.  It could be optimized for quick-picking.

The ordering kiosk software could remember people by their credit card numbers and provide frequent, recent, and favorite item lists to choose from.  As with everything modern now, you could tie it to an online profile where the customer could review purchases and create lists of favorite items to be shown on their next visit.

If you haven’t determined it by now, this is how a small station could compete with a large C-store.  You have the extra income stream of the merchandise sales, but a much lower overhead of running a large store, including maintenance, taxes, cleaning, utilities, and more.  And, in some ways, the service level would be higher.  With so many people in a rush, saving the time of going in, shopping, and standing in line to pay (again), all that time is saved.

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