Revenue and Expenses
Calculating the monthly profit margin of a gas station is essential to determine potential earnings. First, total all revenue, including sales inside and outside the store. Do not count discounts or refunds. Next, add up all expenses like payroll, utilities, taxes, and fuel costs. Subtract expenses from revenue to get monthly net profit.
Location and Gross Margin
A station’s location significantly impacts its bottom line. The average gross margin on gasoline is 15 cents per gallon. After expenses like rent and labor, about 2 cents per gallon profit remains. Convenience store sales generate higher profits than gasoline. Additional contributors are car wash services and food sales.
Profit Margins and Owner Income
Gas stations average a 1% net profit margin. With gas at $3.50 per gallon, they net 3.5 cents profit per gallon sold. West Coast owners average $60,000 in annual profit. Midwest owners average $61,000. South owners average $66,000. Building a new four-pump gas station costs $500K. Upgrading an existing station costs $200-300K. SBA loans best finance stations. Starting a profitable gas station takes significant effort and capital.
Gas station owners can earn between $40,000 – $100,000 per year depending on location, size and type of gas station, and additional services offered. With slim profit margins on gas sales, additional services such as a convenience store, car wash, mechanic services, or food options can enhance profitability.
For gas station owners in the Northeast, you could expect to earn an average of around $69,000 per year.
Gas Station Profit Per Gallon
How much do gas station owners make per gallon? After credit card fees and other operating costs, net profit for gasoline sales averages 3 cents a gallon.
Canadian Gas Station Profits
Regarding profit on fuel sales, most gas stations in Canada will manage an average of 3c a litre profit after expenses. The gas station industry in Canada is worth $30 billion annually, and there are 6,613 gas stations serving the market.