April 7, 2021 • Sticky Post

Choosing the Right Fuel Supply Contract

Your wholesale fuel supply contract can set the bar for success in your business. As a gas station owner, the challenge is finding a flexible agreement that offers you fair gas prices and opportunities to improve your business, like store branding and imaging. Learn the different aspects of fuel supply contracts you should consider before signing your name.

Contract Terms

For one thing, make sure you know about the security deposit that will be required in your contract. Then, determine the type of credit you will receive from the agreement and the amount before you make the payment. Be sure to carefully review the contract terms and ensure this information is stated in the terms.

Carefully review the rack price (the amount that is paid when the truck receives the fuel at the terminal) and what the markup is, so you know your profit margins. This margin is your handling fee, and you need to know all these numbers before you decide to sign a specific contract with a branded or unbranded fuel supplier.

Inquire about commodities such as schedules and volume commitments. Just about every company will set minimum requirements and you want to know what you are getting into before you sign on the dotted line.

Which Brand to Choose

Remember, when you choose a brand to display at your station, you are choosing an organization you will be working with for a long time. You may have some specific restrictions about the brands you can work with, such as proximity to other stations, for example. But you can do your own research to decide which brands you’re most interested in working with and which ones are available to you.

Consider the benefits of each brand including increased sales volume, technology, industry innovation and even the best reputation amongst customers and potential customers. All of this is going to help you decide which brand will give you the best return on your investment. Not to mention you should consider that a gas station is no longer just a gas station. Instead, the customer expects to have an engaging experience and that is where you can make a big difference with things like mobile apps, mobile payment, loyalty cards and a whole lot more. Choose a brand that will make the most for you along the way.

What Does the Brand Offer?

If you make the decision to enter a branded fuel supply contract, be clear of what you’re going to getting in exchange for signing that contract and paying the fees. Are you going to get branding items with the contract or do you have to pay for those separately? All of this should be in your fuel supply contract, so make sure you read through it carefully. Plus, keep in mind that you may need to upgrade your station in order to fit the brand requirements. Does the agreement cover store imaging costs for new canopy fascia, lighting, signs, gas pumps and more?

Konnect General Services now offers flexible and fair wholesale fuel supply contracts with recognized fuel brands like Phillips 66 and Conoco, delivered right to your station. Contact our team and see if you’d qualify for 100% funding for branding and even store improvements!