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<p>[QUOTE=&quot;Heavymetal, post: 26533296, member: 96124&quot;]Retail markups are huge in the good ole USA. It’s what keeps the consumer economy going. A few pennies at grocery checkouts is irrelevant. And clothes, candy, soda, tobacco, alcohol all have enough in the listed price to even give discounts, as needed for competitive advantage. And gasoline could be sold at near wholesale for convenience stores and it might even help their in store traffic. And furniture, just wow. Reality is different from common perception.</p><p>Overview</p><p><br /></p><p><br /></p><p>+5</p><p><br /></p><p><br /></p><p>The average retail markup on a gallon of gasoline is about </p><p>35 cents, but this is a gross margin that includes various costs like credit card fees, utilities, and labor. After these expenses, the net profit is typically much lower, around 10 cents per gallon. A significant portion of a gas station&#039;s profit comes from in-store sales, which have higher profit margins than the fuel itself. </p><p><br /></p><p>Gross margin</p><ul> <li>Average markup: Around 35 cents per gallon, which includes all costs associated with selling the fuel.</li> <li>Variability: This gross margin can fluctuate based on location, competition, and other factors. For example, one recent estimate shows a gross margin of 43 cents at an average price of $3.64 per gallon. </li> </ul><p><br /></p><p>Net profit</p><ul> <li>Average net profit: After all operating expenses are deducted (like credit card fees, rent, labor, and utilities), the net profit is closer to 10 cents per gallon.</li> <li>Low margin: This net profit margin is very small, meaning gas stations often rely on in-store sales to stay profitable. </li> </ul><p><br /></p><p>In-store sales</p><ul> <li>Higher profit: Items like snacks, coffee, and prepared foods sold inside the convenience store have much higher profit margins than gasoline.</li> <li>Loss leader strategy: Many retailers use low-margin gasoline to attract customers to the station, hoping they will come inside and purchase higher-profit items</li> </ul><p>[/QUOTE]</p><p><br /></p>

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