The Jobber/Dealer Who Are They? Remember the term “jobber” from the section about racks? They resell fuel – it’s a revenue center for their business. Their customer base is varied. It’s not just retailers. Jobbers also resell fuel to end users such as municipalities and government entities. A jobber/dealer buys at the rack or on the spot market, if they have storage capacity to buy bulk volumes. They then own a variety of stations, many of which may carry their own brand (ex: “Sam the Jobber’s Gas”). This is considered an “unbranded” outlet. They may also purchase station real estate and station assets outright from a major and sign an agreement to fly that major’s brand flag for a specific period. Large resellers are among the most sophisticated of fuel buyers and are, in essence, oil companies without the “hardware,” (i.e., the refinery) with supply, trading and marketing arms. They are frequently called “superjobbers.” How Do They Buy Their Fuel? Jobber/dealers buy their fuel based on rack indices and buy fuel on the spot market level. That sets the basis for their retail price levels. The Open Dealer Who Are They? This type of retailer, typically, is a private, independent station owner. Sometimes, they become a jobber and redistribute fuel, but most of the time they are just retailers that own their own real estate. They own it all – the land, the pumps, everything. Most times, they get supplied from local resellers and do not pull their own fuel at the rack. They usually have a contractual supply agreement with the local jobber, but unlike the jobber or the lessee dealer, their contract terms are usually shorter in length. How Do They Buy Their Fuel? The open dealer usually buys fuel from a jobber, who charges a “delivered” price to get it from the rack to the station. The open dealer will use that delivered cost as their basis and add in their own margin. A big challenge for these retailers is that they usually do not get help from their supplier in times of tight supply or when margins contract the way a retailer with a branded supply deal might. So, for them, competition is EVERYTHING! Fuel Buying 101, Part 3: Retail Markets | Oil Price Information Service (OPIS) © 2020, all rights reserved 23