The gas used in cars, trucks, and SUVs can be branded or unbranded. The branded gas is found at big name-brand retailers like Valero, Alon,
and Phillips. Unbranded gas is found in every other fuel retail location that does not display a major retailer’s logo. When you are deciding which supply to purchase, it’s important to understand what unbranded fuel is. There are some benefits and challenges as a retailer to selling unbranded fuel. A retailer can benefit greatly from understanding this information in the industry.
What is unbranded fuel?
All gas comes from the same refineries regardless if it’s branded or not. US government standards on factors like octane, quality, sulfur content and lead content are the same for all fuel.From the refinery, the fuel runs through a pipeline into a wholesale terminal, combining with fuel from other refineries. From this central terminal, the supply moves through another pipeline to storage facilities around the country. By the time the fuel reaches the storage facility, there is no way to tell which refiner produced which gas.
The differences in branded and unbranded fuel are the additives the major brands add and the advertising they do to differentiate themselves from each other. Aside for those two factors, the gas is essentially the same.
What are the benefits and challenges of selling unbranded fuel?
Unbranded gas is usually cheaper for consumers to buy, which creates more immediate profit for retailers. There is usually no contract involved with this type of gas. The retailer purchases supply as needed. Without a fuel contract, the retailer can find the best price or negotiate the best deal. Also, this gas retailer does not have the overhead costs of advertising that branded retailers bear.However, there can be challenges with being an unbranded retailer. If supplies get low, these retailers could end up out of product. Branded retailers have a guaranteed supply. When unbranded supply gets too low, the normally low prices can go up rapidly, causing a price inversion. This price inversion happens rarely, but can last a few weeks.
Whether you decide to offer branded or unbranded gas, you need a reliable wholesale fuel supplier to help you. Give us a call at Kendrick Oil, (806) 250-3991, or send us an email. We’ll be happy to answer any questions you might have about our services and products. For more information about our company, check out the About Us page.
