Yah, hey.
With the cost of ethanol now exceeding the cost of unleaded gasoline, and with the ethanol mandate, your Grandma's going to have to move, at least to your side of the woods, if she expects to see you soon.
Unless, of course, you are retailing that gasoline at a guaranteed gross margin of 6%, or wholesaling that gasoline at a guaranteed gross margin of 3%.
What does that mean? Well, 6% of $2.75 is 16.5 cents/gallon. 3% is 8.25 cents/gallon.
Your basic PDQ store pumps about 5,000 gallons/day, for a guaranteed gross margin of $825./day. That's a lot more interesting than 6% of, say, $1.75 (10.5 cents) or $525./day, eh?
And if you have two cars, and you drive 25,000 miles per year total, and you get 20 MPG between them on average, you're going to purchase 1,250 gallons of Corn-a-Hole. At these margins, you're giving the Man Who Wears the Star about $75.00/year--a $28.00/year raise from last year's $1.75/gallon contribution.
Has your gasoline vendor hugged you today?
Er, that's at least a 9.18% profit at the retail level in an increasing-price market. It's the HIGHER of 9.18% above the average terminal (wholesale) price or 6% above what the station paid.
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