ORIGINAL: MikeEast
This is tough. For my LHS guy, we have talked a lot about this and his thing is, he cannot afford to sell stuff any cheaper and stay in business. He HAS to sell the fuel at a 50% markup because he does not sell enough. He sells screws, nut and bolts and stuff for about 5x what I can get it from
www.mircofasteners.com . For a small town LHS, there is no choice, so on those things that are a 1 time purchase I go to him, that includes buying an ARF. BUT, when it comes to fuel I must admit that I will not pay $25/gallon when I can get the same stuff for about 40% less from other places. I understand why he has to do it, but when I am spending up to $800/yr at $15/gallon, it would be foolish to spend more for me. Now if I only burned 10 gallons a year, eh, I think I would stick with him.
I did a quick calculation. Due to his stubbornness, he's losing out on about $80 a year in income, just from you. Sticking with his 50% markup means he brings in about $8/gallon. However, this markup prevents you (and probably plenty of other people) from buying there. So, he get $0 from you. If he'd go with a lower markup, perhaps sell to you 10%, and use fuel as a way to get you into the shop, he'd bring in $80. The important thing he probably doesn't even realize is it's amazing how many of us will walk into a shop for something like fuel and walk out with a new plane, radio, engine, etc. Heck, I went to a motorcycle shop for an air filter one time and ended up buying a new bike! Prices for supplies like fuel should be set at a price to encourage people to stop by.
The other thing is that my LHS does not carry what I prefer to use in fuel and other stuff. I have suggested companies for him to switch to that would save him on cost and he could get the same markup $$/gallon. Also,he would sell more because we would buy it even if it were a few bucks more per gallon, if he carried the right fuel at the right price. But he just downright refuses. This goes for covering and some other stuff too. He refuses to carry anything that he cannot get from "one supplier".
It's amazing how many people will choose to make their lives easier rather than making the customer happy. Of course it could be that his volumes are not large enough so he has to stay with one supplier to be able to meet their minimums, or some threshold to give him a certain discount.