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What to Consider Before Switching to Bulk Fuel Purchasing

What to Consider Before Switching to Bulk Fuel Purchasing

Fuel is one of the biggest expenses of any business. In your industry, chances are high that you rely on fuel for some purpose that is essential to your operation. Buying fuel piecemeal can rack up your company’s energy bill, leading to a desire to find a more affordable fuel option. Wholesale fuel, or bulk fuel, could be the answer you’ve been looking for.

Use this guide to purchasing bulk fuel for success in your latest fuel endeavors. You need to know what to consider before moving to bulk fuel purchasing because it’s a bit different than how you’ve been getting your fuel up to this point. With the right practices and tips for buying fuel in bulk, you’ll be on your way to enjoying many new benefits for your business.

What Is Bulk Fuel?

Bulk fuel is different than retail fuel you’d buy from a gas station or retail fuel delivery service. Businesses purchase retail fuel when they need small amounts of fuel to meet their needs. Whether they lack on-site storage tanks or only have a small fleet to keep going, their needs make buying retail fuel the best option for them.

Yet purchasing retail fuel comes with some added costs — in other words, you’d be paying a higher price than the fuel is actually worth. Businesses raise the price of the retail fuel they sell to include taxes, overhead costs, and other expenses they need to cover. When you purchase retail fuel, you’re footing these costs. This increased price can cause fuel to take up even more space in your budget, especially for businesses with a need for large amounts of fuel.

If your business relies on high volumes of fuel every day to stay operational, retail fuel prices may not be your best option. This is where wholesale fuel comes in, and it could be the answer to your business’s fuel needs.

Wholesale fuel is ideal for businesses with a great need for fuel to keep their fleets, products, and services moving. Wholesale fuel can meet two immediate needs for your business:

  1. You’ll have the fuel you need on hand the moment you need it.
  2. You’ll skip the increased price of retail fuel and enjoy fuel at a wholesale cost.

Those are two crucial aspects that separate wholesale fuel from retail fuel. You need fuel when it’s convenient for you without having to go through a retail seller with higher prices. Wholesale fuel will power your operations the same way retail fuel does but at a better price while offering more flexibility to meet your needs.

What Is Bulk Fuel?

Benefits of Bulk Fuel Purchasing

Your business will enjoy many positive side effects after switching to bulk fuel if you do it the right way. Here are some of the benefits of buying fuel in bulk for your business:

Benefits of Bulk Fuel Purchasing

1. Greater Efficiency

When you sign a contract to receive wholesale fuel for your business, you’ll enjoy greater efficiency because the fuel comes to you on time. You’ll set up consistent fuel delivery times so your storage tanks always stay full. You’ll be able to focus on your tasks at hand instead of focusing on acquiring fuel for your business.

Often, businesses that qualify for wholesale fuel have permanent storage tanks and dedicated gas pumps on their property. Keeping these assets operational with a constant supply of wholesale fuel will increase your company’s efficiency.

2. Less Downtime

You understand how crucial having fuel on hand is for your business. If you run out of fuel, your entire operation can come to a standstill. This downtime could be detrimental to your business and cause your profit projections to plummet in a given period.

Buying wholesale fuel for your business can remove this issue and give you the benefit of always having fuel on hand. Consistent fuel deliveries lead to streamlined operations and less downtime. Time is money, and you need to make the most of it in your business to turn the highest profits possible. You can achieve this with bulk fuel purchasing.

3. Lower Costs

Fuel is one of the biggest expenses of any business. The possibility of lower costs, then, is one worth pursuing as long as you use proper practices. In its simplest form, buying wholesale fuel for your business is more affordable than relying on retail fuel for your energy needs.

Part of the reason for this is the constant fluctuation of the global fuel market. Prices are always changing. Signing a wholesale fuel contract and locking in your price when the market is low can lead to exceptional savings over the course of your contract if fuel prices increase.

4. Emergency Preparedness

Buying bulk fuel for your business can also help you prepare for emergencies. Natural disasters, human-made events, and large-scale power outages can lead to fuel shortages. Purchasing bulk fuel gives you the opportunity to stock up on a reserve supply of fuel to make it through emergencies.

Part of your emergency preparedness plan should be to order enough fuel to last a determined amount of time without access to any more fuel. This measure will help you stay self-sufficient in the face of disasters. You’ll also be able to skip waiting in line for more fuel as other businesses and community members rush to get the fuel they need. Fuel prices can rise during uncertainties, making an emergency wholesale fuel supply another way you can save money for your business.

5. A Better Reputation

Buying wholesale fuel can even lead to you receiving a better reputation in your community as well as your industry. Word of mouth remains one of the best advertising tools, and wholesale fuel can help you achieve positive word of mouth in the following ways:

  • Affordability: The affordability of wholesale fuel can help you provide lower prices for your products and services. Many consumers look for affordability as well as quality, and lower prices can help you earn a better reputation.
  • Dependability: Your customers want to know they can count on you every day, including during emergency situations. If you have the means of staying open thanks to an emergency fuel supply, people will spread the word that your company is one they can count on.

6 Things to Consider Before Moving to Bulk Fuel Purchasing

Running your business on bulk fuel is a much different situation than relying on retail fuel. Use the following things to consider when buying fuel in bulk to make sure you’re making the right decision.

6 Things to Consider Before Moving to Bulk Fuel Purchasing

1. Your Storage Capabilities

Storing wholesale fuel on your business premises often demands large storage containers to make it worthwhile. If you have bulk fuel storage containers on-site, you’re a prime candidate for using wholesale fuel. If you lack the proper means of storage, you may need to look for a different fuel option.

Keep in mind that you can always install new fuel storage tanks on your property in preparation for switching to wholesale fuel. Hiring a fuel manager for your business could make this process easier. Or you can ask nearby bulk fuel suppliers if they have any insight or services to help you prepare for switching to bulk fuel for your business.

2. Your Fuel Needs

Take a look at your company’s fuel usage over the past several months, the last year, or recent years to get an accurate idea of your fuel usage. You can also take into account projected fuel usage for the upcoming fiscal year, as you may expect an increase or decrease in your fuel consumption based on several market factors.

Companies that need a lot of fuel on a regular basis would enjoy the benefits of having bulk fuel on hand at all times. To make good use of your bulk fuel, you’ll have to use it up before it reaches its expiration date. Knowing if your business has the means to use the bulk fuel you purchase is a crucial part of deciding whether wholesale fuel is right for you.

3. Your Budget

Many business decisions come down to money, and the same is true of your decision to buy bulk fuel for your business. Despite being more expensive per gallon, retail fuel’s benefit is that you can buy less of it at a time. This purchasing option is ideal for smaller businesses or companies with stricter overhead costs. Such businesses could be unable to put out the money for monthly bulk fuel orders that meet the minimum service fee requirements.

If you know you can make use of wholesale fuel quantities and you have the budget for it, you’re in good shape to take the next step toward buying it for your business. Buying bulk fuel may be a hefty purchase, but it can save you money in the long run, making it budget-friendly.

4. The Upfront Costs for Switching to Bulk Fuel

Besides the high overall costs of buying bulk fuel compared to smaller fuel orders, switching to wholesale fuel for your business comes with some upfront costs you should consider, including:

  • The purchase of fuel storage tanks
  • Fuel storage tank installation
  • Dispensing equipment
  • Fuel level monitoring systems
  • Other forms of third-party hardware or software to help you track your fuel usage and enhance your operations
  • The time it takes to make the transition from retail to bulk fuel

Enabling your business to receive and use bulk fuel is going to take time and money. Consider if you have the available resources to enjoy a successful switch to bulk fuel.

5. Your Ability to Manage Your Bulk Fuel Supply

Once you fill your business’s storage tanks with bulk fuel, the rest is up to you. Keeping the tanks clean, operational, and well-maintained is your responsibility. You must protect your investment, so make sure you have the means to manage your bulk fuel supply before making the switch. The last thing you want is for your tanks to malfunction, resulting in a lost batch of valuable fuel.

Anyone working with or near the fuel tanks will also need special certifications. The Occupational Safety and Health Administration (OSHA) has set regulations regarding the safe use and handling of petroleum-related products, including knowing how to handle a petroleum spill should one occur. Make sure you or a trained bulk fuel manager are ready to meet every requirement related to the storage and handling of petroleum products.

6. The Different Contracts Available

Understand the different bulk fuel purchasing contracts available to make sure you’re signing up for the right situation for your business. Familiarize yourself with the following two most common types of wholesale fuel contracts:

  • Cap-price contract: This contract features a small upfront premium and offers a locked-in maximum price. You may pay a lower price for fuel when the market value drops, and your price won’t go over the locked-in cap.
  • Fixed-forward contract: With this contract, you agree on a locked-in flat price for future fuel purchases.
  • Collar contract: A collar contract comes with a range of price protection that creates a floor and a ceiling for what you pay.

Tips to Get the Best Value When Buying Fuel in Bulk

One of the main reasons businesses switch to bulk fuel is to save money and increase their profit margins. You want a good deal on wholesale fuel, so be sure to employ the following tips for buying fuel in bulk to get the best value possible:

  • Research different bulk fuel providers: When you make the switch to bulk fuels, you should make sure you’re partnering with a provider that will meet your needs and work with you. Ask around town and read reviews online to be sure you’re partnering with a supplier you’ll be happy to work with.
  • Secure a fixed contract: If you can, sign up for a fixed contract to lock in your wholesale fuel price when the market is low. Then, you can enjoy the same prices even when the market fluctuates to a higher value. Those savings will open up your budget and give you consistency when planning for your bulk fuel deliveries.
  • Ask providers where they get their fuel: Knowing where providers get their fuel can give you insight into the possible volatility of their prices and service. If a provider sources all their fuel from a single, unstable region of the world, you could suffer consequences when fuel from that area becomes impossible to receive. Choose a provider with several fuel procurement locations to give you a better, more consistent value.
  • Follow the market trends and review your contract: Watch the changes in fuel market values to make sure you are getting the best price available. Even if you have a fixed contract, you can negotiate with your fuel supplier to rework your contract to enjoy lower prices if the market dips to a lower rate. Your fuel supplier should want to work with you to keep your business, so a contract restructure could be a viable option.

Contact Shipley Energy to Learn More About Our Commercial Wholesale Fuel Services

When you need a reliable, reputable wholesale fuel provider, Shipley Energy is the company to call. We’ve been in business serving regions in Pennsylvania and Maryland for over 90 years. We know bulk fuel, and we want to be your new commercial fuel provider. We serve many industries, so your business is sure to be one we can help.

Contact us online today for more information, or give us a call at 1-800-839-1849 to talk to one of our friendly representatives.

Contact Shipley Energy to Learn More About Our Commercial Wholesale Fuel Services