If you’re reading this, you’re probably interested in buying a Speedway convenience store. Convenience stores offer many advantages, but they also have a few disadvantages. Let’s take a quick look at who owns and operates these stores, and the risks involved in purchasing one.
These are the lucky souls who buy and sell goods at a good price with minimal overhead. They are typically the smaller operators, so the margins of error are much higher. Still, even the biggest and most established chains in the industry lose money just to stay in business.
The chains generally outsource their convenience store operations to smaller, independent entities, which take on a significant amount of the risk themselves. Some of these stores turn a substantial profit, while others lose a lot of money. That’s why the chains don’t want to put all their eggs in one basket by owning a whole bunch of these small stores, since this introduces too much risk.
The Regional Chains
Regional chains are the middleman in the industry, acting as both the supplier and the retailer of last resort. They buy from the independents at a good price, sell to their own customers, and then make a small profit to help cover the costs of the operation. This minimizes the risks for both sides, but it also limits the diversity of the products available at a given location.
The chains have every reason to keep expanding, as this reduces costs and allows them to offer more convenient shop locations.
Supermarkets are the ultimate combination of retail and wholesale, acting as a one-stop shop for all your shopping needs. The convenience of having everything in one spot is the reason why millions of people use supermarkets on a daily basis. These days, supermarkets also have convenience stores inside of them, providing a faster service for their customers. The downside is that the supermarkets have to cover all their expenses, including rent and payroll, so the prices are a little higher than usual.
The margins are still high thanks to the volume of business that these stores generate. As a result, the smaller the store, the more significant the profit margin. This causes some of the smaller, independent operators to either shut down or pull out of the industry completely. The chains have to protect their interests, so they can’t be seen to be offering a lower price than a supermarket.
In addition to covering all the costs of operation, franchises help owners get the most out of their investment, by providing them with an already established customer base, staff, and a physical location. The disadvantage is that these stores need to follow a strict protocol with regards to pricing, as their very existence depends on it. The profit margins are also much higher than usual, which makes them more vulnerable to changes in the economy. Still, the returns on this type of investment are usually very high.
The Smaller The Better
The smaller the business, the more flexible they are with regards to price and product, as there’s a lower chance of them going out of business. This makes it easier for them to negotiate a good price, and it also provides them with a higher degree of autonomy. The downside is that the smaller the business, the more limited their customer base. This puts them at risk of not being able to serve all their customers, or at least some of them, in the case that some unforeseen circumstance forces them to close up shop.
As you can see, there’s a lot of risk and vulnerability associated with owning a Speedway convenience store. The good news is that you can find a ready-made business that’s already established, with high profit margins and minimal start-up costs. All you need to do is to find a suitable location, get the proper permits, and get to work.