How Much Money Do Gas Stations Make?
How much money or profit do gas stations and owners make? Gas stations are always a good business idea because this commodity is always in demand. This article will give you an in depth look into gross and net profits.
It is very hard to determine exactly how much you can make. It all comes down to the following variables:
- Real Estate involved?
- Cost of rent
- Cost of loan payment
- Location (high or low traffic?)
- Premium or Discount Supplier?
- Independent or Franchise?
- Number of employees
- Cost of Utilities
These are just some of the factors that will help to determine how much a station can make. It is different for every station as the scenarios and costs of doing business will be different for each one. The truth of the matter is that the oil companies take home the lion's share of the profits. The independents owners make a very small percentage of the profits on the fuel they sell but make most of their profits on convenience and lottery sales.
Let's say the cost in a Florida station is $ 2.62 per gallon. You can expect to make around 5 percent of that which may come up to around 13 cents per liter. Some owners make even less than that. Now the bulk of the profits are made by selling tobacco, chocolate bars and other convenience store items like lottery tickets. Stores typically make 30 percent of these types of sales in the form of gross profit and anywhere from 5 to 15 percent of lottery ticket purchases.
A ball park figure for most high traffic premium gas stations would be a gross profit of $ 800,000. After paying out operating expenses, you could be left with around 10 percent in net profits of around $ 63,000 to $ 80,000.
In the end it will be up to you to weigh the pros and cons of business ownership. Gas stations are not small ventures that are easy to start up. There is a large start up cost involved and nowdays it can be challenging to find lenders for this type of industry.
It will be a large commitment of money and time. Most high traffic station owners work 50 to 70 hours per week and have to hire full time and part time employees in order to pick up the slack.