How Does Sam's Club Keep Gas Prices Low Compared To Other Fuel Stations?
When gas prices are high, finding stations offering the best rates is a priority for virtually any motorist. If you have a nearby Sam's Club with its own gas station, you've likely noticed that its prices are relatively low compared to much of the competition.
You're not imagining the price difference, either. Industry professionals have found (via Consumer Reports) that gas at Sam's Club or Costco gas stations may be anywhere from five to 25 cents cheaper per gallon than other gas stations in the area. In some cases, Sam's Club gas stations may offer prices that are 70 cents lower than state averages. Analysis also indicates that these gas stations raise their prices more slowly than others.
Sam's Club can afford to sell cheaper gas because it's a way to get you to shop at a Sam's Club store. Retailers with their own gas stations, like Sam's Club and Costco, can justify lower margins than other gas stations because those low prices attract potential shoppers to their retail stores. This also lets them keep prices lower for longer, since they treat their low gas prices as a promotion.
How Sam's Club makes money off its low gas prices
Low gas prices attracting shoppers to its stores is just one reason businesses like Sam's Club can offer more affordable gas than others. These gas stations also tend to buy a large volume of gas. This, along with solid negotiating, means Sam's Club can buy gas for less than competitors, allowing it to pass these savings onto consumers.
That said, a business isn't a charity, and ultimately, offering lower gas prices may be better for Sam's Club's bottom line. The company knows that low gas prices can lure in shoppers who will then be more likely to spend money at its warehouses.
Of course, getting gas at Sam's Club or Costco isn't your only option for saving money on this necessity. If you use an iPhone, there are several iPhone apps to help you find affordable gas. Although you can't do much to stop gas prices from rising, you can still familiarize yourself with the many ways to reduce spending at the pump that extend beyond choosing a cheap place to fuel up.