holesale fuel refers to fuel bought from a wholesale fuel supplier rather than being bought directly from a retail gas station. It is generally acquired at a cheaper rate in bulk by retailers such as c-store owners who, in turn, sell the fuel to their customers as and when they need it.
However, there are so many fuel wholesalers out there now that trying to partner with the right one can seem overwhelming. Equally, with the price of gas inflating more and more by the day, the importance of c-stores pairing with appropriate fuel wholesalers cannot be understated.
The fact that 54% of c-store shoppers purchase gasoline highlights the market potential for c-store owners which needs to be taken advantage of in order to increase profit margins. Ultimately, fuel retailers need to consider a variety of factors before choosing the right wholesaler for them.
It is important for c-stores to select fuel partners with a future-focused outlook. This is because they need to be able to adapt to meet the ever-changing needs of c-store consumers, keeping up with technological trends by adjusting their strategies. An example of this is the growing need for a ‘frictionless’ consumer experience.
One UK study showed that around 63% of people would prefer a pay-at-the-pump option rather than making a payment to a cashier. Equally, 72% prefer to pay by card or mobile app rather than by cash at the gasoline station. While these statistics are not US-based, they are representative of a wider trend that contactless payments are increasing in popularity across the world, and that this payment method is quickly becoming a blanket expectation.
Contactless at the gas pump is beneficial for a wide range of reasons, including security purposes as well as tackling lingering concerns from the COVID-19 pandemic whereby consumers generally prefer having minimal contact with both cashiers and cash itself.
With U.S. consumers quickly moving to chip-enabled credit cards, some gas stations are still playing catch-up. For instance, only 300 of Chevron’s 8,000 gas stations were able to accept mobile payments pre-COVID.
However, Glenn Johnson, general manager for Americas products marketing sales and services at Chevron states:
We are thrilled to innovate in the area of retail fuel transactions by making the customer experience for payment and loyalty as smooth, seamless and secure as possible…Offering Apple Pay to our customers further solidifies our commitment to delivering high-quality products and services while in a secure and convenient manner
This points to a larger demand for mobile payments and shows that fuel wholesalers are trying to create more future-focused strategies as time goes on. Thus, c-stores and wholesalers that are making use of this technology are more likely to see increased growth than those that are not.
Another major trend c-stores and fuel wholesalers are seeing is the need to build a level of trust with their customers. This is now particularly relevant with smartphones due to the capabilities of mobile loyalty apps in which returning customers can build points over time to spend on items in-store or to receive reduced fuel rates.
Offering these rewards is now a huge part of a consumer-brand relationship which is becoming increasingly vital to customers who want to feel as though they are contributing to a fuel brand they can rely on. Therefore, c-stores need to pair with fuel wholesalers who are willing to these types of relationships with customers in order to develop and keep a faithful clientele.
When deciding where to buy gasoline, 74% of c-store shoppers consider the brand to be “somewhat or very important”. Thus, fuel companies are starting to understand that they must fight for consumer attention by offering such creative methods to produce a feeling of personal connection with consumers.
Finally, the importance of fuel wholesalers is also huge in the sense that as well as looking out for their customers and their needs, c-stores also need to partner with wholesalers who are equally as willing to support the c-store themselves.
For instance, fuel brands like Motiva Enterprises have proven track records of helping c-stores out when they are in need such as during hurricane difficulties and fast-tracking EMV at the pumps when waiting lists for installation were long.
Likewise, Motiva is currently developing a new digital fuel ordering service designed to improve the ordering process for its wholesale customers which executive vice president of marketing and sales at the company, Bill Spurgeon claims will be ‘the Uber for the fuel delivery business’. This platform will allow c-stores and retailers to track their fuel deliveries, streamline invoices and help to reduce human error.
This points toward a new era of fuel seamlessness and c-stores should aim to partner with suppliers who are developing such schemes to get ahead of the game.
Overall, the importance of fuel wholesalers is greater than ever for c-stores in the current fuel situation as they allow retailers to offer customers a range of benefits including ease of technology, rewards apps, and a positive relationship with customers.
Retailers and c-store companies that regularly collaborate with suppliers demonstrate higher growth, lower operating costs, and greater profitability than their industry peers.