If you rely on fleets or other fuel-powered vehicles to keep your company running, moving to wholesale fuel may make a significant improvement on your operations and your profitability. H&S Energy can help your business analyze the impact of implementing a wholesale fuel program for your business.
What is the difference between wholesale and retail fuel?
Retail fuel is priced to sell directly to the consumer. Because the sale of retail fuel is in limited quantities (generally filling one vehicle at a time), the time and
labor costs for the retail station are high. The retailer puts a markup on the fuel they receive from their wholesale distributor to recover the costs of fuel station operations–including everything from the storefront utilities to insurance expenses, plus make a profit.
There’s another option that businesses need to know about–purchasing wholesale fuel. Distributors sell fuel to commercial consumers at prices much lower than retail. This is possible because they lower their costs substantially by selling in bulk and coordinating repeat deliveries.
How does a wholesale fuel program work?
Businesses participating in a wholesale fuel program install on-site storage tanks and a fueling station. The wholesale distributor schedules routine deliveries to fill the tanks. Rather than purchasing enough fuel for a single vehicle, the business is buying hundreds or thousands of fuel from the distributor at one time.
The business then selects how to get the fuel from the tanks to the vehicles. For example, a company using fuel to keep forklifts and on-site vehicles operating may have a process where each vehicle visits the fueling station daily. On the other hand, the business may also install a card lock system where fleet vehicles use an identification card to access the fuel 24/7/365, allowing the business to track refueling information, including how many units were distributed to which vehicles at what times of the day. Card lock adds additional security and reporting to the program that many companies find valuable.
What are the benefits of a wholesale fuel program?
Companies with gasoline or diesel fleets or fuel-powered equipment may realize many benefits from implementing a wholesale fuel program.
- Decreased inventory costs. The most obvious benefit is the reduction in per-gallon cost when a company moves from purchasing at retail prices to wholesale costs. Often, contracted rates are negotiable and may depend upon factors such as industry, forecasted sales amounts, and delivery schedules.
- Increased efficiency. It may be eye-opening to analyze how much time fleet drivers and machinery operators spend refueling their vehicles at retail fuel stations. Time and money are wasted when drivers go additional miles to refuel and then wait for their turn at the pumps. With a wholesale fuel program, the fuel is already on-site, and the process is quick and straightforward to perform.
- Improved productivity. When your fleets and vehicles are spending less time refueling, it means they have more time to get their work done. Having fuel available at headquarters keeps drivers on the road for more hours each day. Additionally, with automated delivery options or tank monitoring systems, all the legwork for ordering fuel is taken care of, keeping maintenance work off the task lists of your administrative staff.
- Priority deliveries. Another key benefit of setting up a wholesale fuel program is that you can often negotiate a priority delivery schedule. That means that in a shortage, you can be assured you’ll receive fuel before other businesses in your area. Priority deliveries will take much of the burden off your shoulders when planning for emergencies.
- Better reporting and budgeting. With a wholesale fuel program, you are no longer reliant upon collecting receipts from drivers or coding charge card purchases to track your fueling costs. Modern software solutions connected to onsite refueling units can track how much fuel was received from the distributor and the amount pumped into every fleet vehicle or machinery unit. Trends and exceptions are simple to detect, so you’ll instantly know if costs exceed the budget or other suspicious situations exist.
Contact our team at H&S Energy Group to learn more about wholesale fuel programs for your company.
Our professional team works with business owners like you to develop plans and strategies to achieve success. Whether you’re interested in learning how a wholesale fuel program can benefit your company or you want to upgrade your cardlock facilities, we have the expertise to guide you through the entire process. Our goal at H&S Energy Group is to make crossing the finish line of goal achievement easily within your reach. Contact us today to get started!