4 tips to grow your fuel business

As a fuel supplier, growing your business depends on growing your customer base. This means either finding new customers in your area or expanding your service area or product offering. The old adage "You have to spend money to make money" applies more than ever these days - with expensive advertising and time consuming email and sales calling campaigns. With new advances in technology, it has become possible to reach a wider audience with a lower cost.

Find buyers in your area who need your products

Traditional methods of finding customers are costly and inefficient.
  • Local business directories allow you to find the types of businesses that are likely to have fuel needs. You pay your sales force to contact them and establish a relationship so you can find out if and when they want to make a purchase.
  • Most mailing lists of upcoming construction projects are expensive and are out of date by the time they get to you.
  • Advertising is both expensive and inefficient since it isn't sufficiently targeted to your service area and customer type.
The fact that more and more buyers are moving their fuel procurement online creates an opportunity for suppliers. By participating in an online marketplace you are notified when buyers are requesting bids. Some systems can even send you an email when a buyer in your area needs fuel(s) that you provide

Make your bid response reflect the client's needs

Of course low prices are important but they are only a piece of the puzzle. It is important that you understand your clients' requirements and business model so you can offer a package including prices, services and information that meets their needs. Historically it has been time consuming to gather this information.

Luckily, some of the same online marketplaces that bring clients to you also bring detailed information about the client and their needs. Be sure to review this information carefully. You don't want to lose a deal just because you forgot to provide a piece of information the buyer requested such as evidence of insurance coverage. Suppliers who provide a detailed response to the buyer are more likely to win the business.

Build relationships through long term contracts

Long-term contracts can be a win-win for both you and the buyer. You receive a steady stream of revenue without the cost of finding new clients and the buyer doesn't have the headache of coordinating bid requests. The key to a successful long-term relationship is continued excellent customer service and a pricing mechanism that allows both parties to enjoy fair prices.

With index pricing, you commit to providing fuel at a price that is a specified amount above or below a known index. Usually the index is one published by third-party such as Platts or OPIS. The buyer defines which index they want to use - for example, they might select the price from the fuel racks nearest to their locations.

Expand your service area or product offering

In the past, it has been difficult to decide to expand your service area or product offerings. However, some online systems allow you to view historic bid requests and awards. This information allows you to determine if extending your footprint would be a good business decision since you can see the amount of business available and judge the competitiveness of the environment.