The most expensive assets on all fuel retailers’ books are their land and equipment. Retailers often spend more than half their gross profits (fuel retail prices depending) to pay off these assets through mortgages, interest, rent and other long-term capital expenditures.
Despite the inflated costs for these assets, only a few station owners track or measure daily utilization. Every minute a pump stays empty, you’re not using your land and equipment to their full capacity, effectively leaving additional operating income on the table.
We call this capacity utilization. It’s a fundamentally different way to think about your business. When you increase capacity utilization, the financial results speak for themselves.
Capacity utilization:How much of a potential “pump hour” is spent actively pumping gas |
Calculating capacity utilization
At Upside, we use transaction data to analyze on-site activity for an entire 12-month period to get a holistic view of your site’s overall performance. Here’s how it works:
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Average capacity utilization: First, Upside determines a site’s maximum capacity. To do this, we process their hour-by-hour transactions over a year and identify the single hour with the highest number of transactions or gallons sold. From there, we tally the number of transactions or gallons sold every other hour the station is open and divide the total number by the max capacity.
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Rush hour capacity utilization: Upside calculates a separate average for these high-volume sales times to get a clearer picture of daily performance. To do this, we identify the three hours (often non-consecutive) with the highest volume of transactions or gallons sold, tally up the totals and divide by maximum capacity.
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Remember this formula for how to calculate capacity utilization: |
How Upside helps you increase capacity utilization
With access to transaction data from more than 30,000 retailers across the nation (roughly 20% of all gas stations), Upside found that average capacity utilization is only 24% on a given day. This means retailers, on average, have 76% of total capacity going unused.
This is a problem set we work through every day at Upside. We use data and machine learning to generate personalized promotions that drive customers to your location.
Because Upside fills your spare capacity with profitable, incremental transactions from this larger draw of customers, there are no extra operating costs. So revenue earned falls straight to your bottom line.
Visit www.upside.com/business/gas to learn how Upside can help you:
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Connect with our growing network of 30M+ consumers nationwide
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Capture new customers, gallons and c-store transactions
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Take back market share from your competitors
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Monitor performance in real-time
Endorsed by top fuel brands like Shell, Valero, P66, 76, Chevron and Circle K, Upside’s top-rated app and partner network bring nearby customers to your business. We base our personalized cash-back offers on the data you already have and your profit is guaranteed.
