Station markup - Of course some of the money you spend at the pump does go to the service station. While some consumers blame high prices on station markup, service stations typically add on a few cents per gallon. There's no set standard for how much gas stations add on to the price. Some may add just a couple of cents, while others may add as much as a dime or more. However, some states have markup laws prohibiting stations from charging less than a certain percentage over invoice from the wholesaler. These laws are designed to protect small, individually-owned gas stations from being driven out of business by large chains that can afford to slash prices at select locations. Quoting a DOE article here
What happens when not if, many gas stations can't be getting cheap gasoline from refinery as costs or overseas charging more cause futures markets have doubled or tripled and cardholders bought these cards a buck or more from current price and very few stations are honoring these cards any more? The small station owners are not going to go into debt and lose their stations. It is going to end up being like chips at a casino and they not honoring them any more for past two years. One of the huge reasons gasoline costs way it does is state taxes, PA highest at 50.4 to lowest AK 12.25cnts per gallon and federal taxes of 18.40 cents per gallon. And you can expect these taxes going to increase as states going bankrupt. http://taxfoundation.org/sites/taxfoundation.org/files/docs/GasTaxMap-01_0.png The other flip of the coin, when crude oil tops and instead of fast drop, could be 3-4 years decline, consumer will be losing as they could have bought way too high and take years/decades before price that high again. As far as the company itself, every dollar collects interest and the 3%, but at some point all those who bought cards will ask for redemption, so better have slick lawyers. This could be profitable business for few years till it is not good, then the states can start suing you if you don't allow redemption. Plus I don't know regulations of dealing with buying commodities like gasoline as in a way the consumer becomes a trader and company can be considered an exchange? It is not like buying $50 Gift card at Starbucks, I am not locked into a price of cup of coffee.
back again, why hasnt this been done? it has been done and everytime the company either miscalculated certain things or their model wasnt best,,, for example my gallons had in dollars still, pricelock had it where customer can use cards anywhere, first fuel bank has it only for local customers, when i launched this back in CA i got more demand than i was able to handle,,,, dont forget your opinion and my opinion is not what the consumers opinion is,,, then i realized that iam into something thats much larger than life and what i needed is automation and technology which is when i decided to retreat, regroup and reformulate TO RECAP I NEED A COUFOUNDER WITH A TECH BACKGROUND the main hurdles are nothing that has yet been mentioned and all of the hurdles are not ENOUGH to derail the entire business WHATS NEEDEDS 1.COBRAND 2.AUTOMATION were not reinventing the wheel here, were just doing it better, i mention once again, facebook wasnt the first social media, yet they became the best
iam not sure how this is related to THE GALLON CARD,,, were not doing anything with pricing, were just fixing it,, customer can pick up any gas station
electric cars will eat into the customer base in the future, but were far from that so far, 360 million gallons a day In AMERICA alone so far
overnight, this is exactly what happened to pricelock, they got ranover by arbitrageurs,, there is a fix for this problem, its not end of the world or the business, the fix is simply the same algorathim the bank uses when u travel to unknown location that ur not usually there, the first thing they do is either stop ur card or alert u, now here we wouldnt stop the card,,, our cards work everywhere doesnt mean the customer can constantly take advantage by saying they are in texas but card constantly showing up usage in ca,,,, for those who travel in between or go nationwide they can buy at the average of their two locations and the national average for others, truck drivers for example that drive nation wide,,,, additionally if this becomes a major issue the cards could be made to work in certain metro areas only,(thats a feature already) there is always a consumer that will attempt to do what ur saying above thats true but not everyone will be doing so,,,, the problems you bring up are all valid and accurate but what iam trying to get at here is they are not catastrophic to end the entire business,,,, risk measures and guide lines that will be introduced which will of course evolve over time will reduce that to minimum,,, just like with any business there are pitfalls,, and there are many here but like i said these are not enough to terminate the whole thing additionally u keep looking at it from the top down, versus bottom up which is where business start in,,, simple fix to this problem if gets too wild is launch in certain markets only and stay there,,, the pie is very big
THIS IS ACTUALLY ONE OF THE MOST IMPORTANT THINGS,,,, to clarify that statement what i meant is in his example where he said 10 million gallons sold at price 2 and assumes it goes to 1 dollar a agallon,,, i was referring to static example cuz in the real world the scenario wouldnt be clear cut like that,,, when prices drop demand for gasoline from everywhere and from us increases which means more consumers purchases and more member ship fees and more gasoline spread,,,, what iam saying is where the money is made from is not only from member ship fees but also from spread on gas we sell to the consumer it self,,, not every consumer will buy gas at lets say 1.4 when its 1.2 at the pump,,, but for some it will be worth it since WE fix that price for them for as long as they keep their member ship,,, longer duration means longer member ships to be collected from those who dont redeem right away and use cash instead or buy even more from us,,, longer duration means money sits longer with the corporation allowing it to generate even more and earn more both on interest and time decay of options that we would be deployed for gasoline we intend to purchase any ways on behalf of consumers,,, so for the example above 10 million sold at 2 dollars a gallon, thats static,,, whats dynamic is that we know if we sold 10 million at 2 then at 1 dollar we sell lets say 20 million gallons and based upon that puts would be shorted, if they expire in the money were gonna buy any ways if they dont then thats extra profit added,,,,,,, also dont forget,, consumer pays full price, we pay only margin req on futures,,, thus the extra money can be deployed on strategies within the company such as the puts selling or hedging thats above and beyond the basic hedge of just buying a CONTRACT... now u bring up an important thing which is do i know the cost to hedge to an unknown time,, i dont expect to know precisely the exact number because the unknown variable here is when will the customer redeem??? since they have no expiration thats constantly changing but inflows and outflows can offset that where it builds a matrix,,, we might lose on one customer here and lose on another there,,,,, at its most basic form, we can increase prices premium we charge for any new customers that want to purchase,,, of course this will make some NEW CUSTOMER shy away or existing ones from not buying more,,, but the lower the price the less sensitive the customer is about it since he is mostly concerned about his expectation of future prices and uses us to lock in his price