CEO Corner
Turn up the Volume for Higher Profits
Most fuel retailers try to increase the gross profits on their fuel sales by relying on higher margins. History has shown, however, that increasing sales volume can be just as effective. Let’s look at a few ways to pump up your volume and your profits.
Set Target Volumes
One of the best ways to increase sales and profits alike is to pinpoint where the opportunities for higher volume exist. For example, if your goal were to generate $10 million in fuel sales for a 10-store chain, simply targeting $1 million per location may not be the best strategy. One store might offer the potential for twice as much business as another. By analyzing data for each location proactively, you can determine store-level targets and then set volume goals accordingly.
Monitor Performance
Once you’ve established clearly defined target volumes, you can monitor the results by site, by region or across all locations automatically, using fuel pricing software. You’ll have data for your own fuel volume as well as price data of your competitors – and can make adjustments to maximize your profits as market conditions change.
Be Proactive, Not Reactive
Outside factors, like unforeseen changes in the economy or special promotions by competitors, can affect consumer demand—and sales—significantly. By proactively setting your fuel prices to accommodate short-term market changes, you can make a major difference in how much you sell and, as a result, push your profits higher.
The good news is that a variety of business intelligence tools are available today that can take the guesswork out of your fuels pricing decisions. With the right tools in your fuel retailing arsenal, you now can have the best of both worlds—more sales and more profits.
28 April, 2009