“Spend your weekend in Sam’s Club Middletown, New York and take advantage of their terrific deals on gas purchases.” That was the marketing blurb of one gas station in Westchester County. Now that it has been changed, I wonder how accurate that is.
“We’ve changed the gas station in Westchester County from being open to the general public, to Members Only. We no longer sell gas to non-members, so we do not advertise a flat rate price without the member discount. Now, all pumps will display the Members discounted retail price along with the discount they receive for being a Member. The membership card is still available at our office in White Plains, but our customers now need a membership number to purchase gas.”
Gas prices at Sam’s Club Middletown, New York are a lot more reasonable than other areas in the tri-state area. But, is it really reasonable? There is the question of how it is determined by the company’s retail locations and other factors.
According to the gas station, the wholesale price of gasoline was $4.00 a gallon and the prices at the Sam’s Club gas station is actually about half of that at about fifty cents a gallon. It is an amazing difference when you compare gas prices in two different locations. And, that is just the wholesale prices. The actual retail prices found at the gas station are about twenty five percent lower than the wholesale gas prices reported in the media.
If the gas station’s ownership is worth a hundred thousand dollars and if a million dollar lease is involved then they would break even if the retail price was only forty five dollars a gallon. This means that a quarter of their revenues has been generated from selling gas at retail prices below the wholesale rate. It makes sense when you think about it. There are only so many places that you can get gas at for the same price as at the gas station and the competition among the gas stations is great.
In addition to the discounting at the Sam’s club store there are other discounts that are not available at these stores. At some of the stores the gasoline is cheaper than anywhere else. The other big difference is the service. It appears that they have the best service out there. In fact, I believe that this is one of the reasons that the gas prices are lower than anywhere else. It is a high class city with good service and the people are friendly and this accounts for much of the reason that the prices are lower.