Reconciling Gas Station Profit Margins

[masmia]

Working on a gas statinon appraisal (business & real estate) for owners private use. According to owner his station has a profit margin on fuel sales of +/- $.24 per gallon. Recent sales all have gas profit margins of +/- $.12 per gallon. Problem I'm having is I'm not too happy with the differenct between the value indication by say price/SF lot size, price/fueling position, price/C-store size and the value indication by Gross Profit Multiplier. I know it is not unheard of for a station to have a $.24 per gallon margin in the subjects market, it's just than none of the recent (18-24 mos) sales have similar fuel margins. With all the changes in the economy and especially the gas station market that have happened in the past two years I really don't think getting older sales would be reliable.

I'm tempted to leave the results as they are and just reconcile the different value indications. I just wanted to see if anyone out there has a different idea on how to handle the situation.

Thanks.

 

[Vernon Martin]

Have you looked at price/gross sales?

 

[Howard Klahr]

Most stations have a contract that stimulates the margin on gas. If you check out the web sites that market gas stations you should be able to get this info for the ones in your area listed for sale. Most of them are priced based on this margin plus c-store sales volume, repair bay revenue, if any and other revenue sources such as car wash tunnels.

 

[murray stroupe]

Re;Whole sale & retail gas

Most stations have a contract that stimulates the margin on gas. If you check out the web sites that market gas stations you should be able to get this info for the ones in your area listed for sale. Most of them are priced based on this margin plus c-store sales volume, repair bay revenue, if any and other revenue sources such as car wash tunnels.

===============
Amazing how much it varies, asking price anyway;
even in the same county, same brand.More change when you cross the county line .

Hopefully appraiser T Shields comments on this;
he keeps up with many parts of oil business.

 

[CANative]

I think perhaps the profit per gallon is a red herring. If they're selling 10,000 to 20,000 gallons per day the difference between 12 cents and 24 cents is trivial compared to the amount of in-store business being boosted by less profitable gas sales.