In the Know is a monthly partnership between LP Gas magazine and Propane Resources. Our focus this month is on winter preparation, addressed by consultant Cooper Wilburn.
Q: What steps should retailers take to finalize their readiness for the 2016-17 winter?
A: Hopefully retailers throughout the country have spent their time wisely this summer, contacting new leads, setting tanks, cleaning up collections and getting rolling stock ready to go for the upcoming winter. By now, these tasks should be nearly complete. But there are other must-do items equally important that may have fallen through the cracks.
While you may have spent the summer setting tanks, there are always those customers who do not want a new tank set before they need more gas (or until they use up the gas they’ve already purchased). As a retailer, this means you are setting tanks September through December. Have tanks on the lot, painted and ready to go for these customers.
Rolling stock should be in tiptop shape. Losing a bobtail in the middle of winter can be devastating to profits and customer service. Having a bobtail go down in a normal winter can cause headaches. Having these assets in good shape before winter deliveries hit can help to reduce those risks.
Get ahead of the game and plan your winter events now. Schedule driver safety training six months in advance. Prepare new customer packets so they are ready to hand out. Most importantly, prepare for how you plan to adjust your pricing and operating cost between a normal winter and a warm winter. This means preparing monthly financials and gallons for the upcoming winter and reviewing them monthly to see if your budget was met. If not, you have time to adjust it so your company’s profitability is what you expect.
Speculation is speculation. Cover the pre-buys you sold this summer. Don’t get caught in a situation where you need to buy higher-priced gas than what you originally anticipated; lock in those margins now. We all have short memories, but don’t forget what happened in the 2013-14 winter when prices spiked to more than $4 per gallon. On that note, if you haven’t already, fill your storage tanks before that first cold spell. When the weather turns colder, customers will begin calling for fall fills, if you don’t have them scheduled already.
Contact non-gas suppliers and get showroom and display items ready for winter. Having items on deck ready to view and purchase when a customer wants or needs them will increase the likelihood of a purchase versus waiting for the items to be ordered and shipped. Work with vendors to reduce lead times on restocking items that sell quickly.
Make sure employees are trained to answer questions. Most importantly, train them to respond to “What’s your price?” and “I smell gas.” These types of questions and statements will present themselves throughout the year. Making sure your customer service representatives know how to respond correctly is critical. Your employees’ responses will reassure your customers they are safe, and answering the price question well will, without a doubt, increase gallons sold.
The supply crisis happened several years ago. Hopefully since then you’ve found a couple of reliable suppliers. If not, call around, complete credit applications and possibly lock in a portion of your supply with someone other than your normal supplier. It never hurts to have a backup.
Speaking of backups, are you prepared for a driver’s absence or the need to deliver significantly more gas than expected? Finding drivers is a challenge under the best circumstances. It’s never a bad idea to keep a couple of drivers’ résumés in the desk drawer in case of an injury or a really cold winter. Maintain those relationships with prior seasonal drivers. People move, get injured and quit every day, so be prepared for someone to step into those positions when this happens. You don’t make money when your bobtail isn’t making deliveries.
Lastly, pray that La Niña brings back the polar vortex and that you are prepared to enjoy a cold winter.
Cooper Wilburn is a consultant at Propane Resources. He can be reached at email@example.com or 913-262-0196.