Friendly rival, supplier give Michigan retailer chance to make its own name

June 1, 2012 By    

Forty miles down and 40 miles back. That’s the drive Harry Michael used to make to a competing retailer two to three times per day back in 1987, when he first ventured into propane for his expanding family business.

“We didn’t know anything about propane then except that we wanted to get into it,” says Michael, whose father, Stan, founded Michael Oil Co. in 1948 in Big Rapids, Mich. “We found this family-owned business about 40 miles away, so we made a deal with them.”

The deal entailed this: Michael Oil & Propane would not approach the friendly competitor’s customers, and the friendly competitor would not approach any new customers Michael landed. In return, the competitor would supply truckloads of propane to Michael, who bought a used bobtail to haul propane back to his tank.

Over those years hauling back and forth, the business caught the attention of several suppliers, including one who agreed to provide Michael with an 18,000-gallon tank and piping in exchange for Michael Oil & Propane’s business. A few cents of every gallon Michael Oil & Propane sold also went toward the business’ bulk tank until it was paid in full.

Shortly after the business’ first bulk tank was installed, Michael put a second bobtail on the road and later added a second bulk tank.

“A person getting into propane should have the wherewithal to survive the first years because it’s going to cost them money,” Michael says. “You’ve got trucks to buy, insurance premiums and tanks you either buy or lease. You’ve got to stay on top of all these things.”

Michael has stayed on top of safety during his 25 years in propane, as well. He jokes that his business may be the slowest company at setting tanks, but its servicemen are slower, he says, because they take the necessary precautions to complete a job.

One precaution Michael takes is to put two men on a job when possible.

“We do this not only for safety but for legal ramifications,” he says. “This way we have a witness to what’s being done and said.”

Safety for Michael extends beyond his own customers. Take the case of a competitor’s customer whose tank had been overfilled and was venting. The customer could not reach the company servicing it, so Michael Oil & Propane took the call.

“We didn’t have to step in and take responsibility in that case,” Michael says. “But we went out and stopped the venting so the customer felt safer. It’s not just this one homeowner you have to consider in cases like these. They have neighbors to consider, as well.”

TEAM: Pictured above, from left, Don Ottobre Jr., Gail Bailey, Sally Gamble, George Geib, Robert Grove, John Viers and Harry Michael.

LOCATION: Big Rapids, Mich.




PROPANE SALES: About 600,000 annual gallons, plus about 400,000 annual gallons of heating oil

Centennial celebration
LP Gas Magazine is celebrating the propane industry centennial by honoring longtime retailers with our Blue Ribbon Gas Man award and enduring dealership businesses with our Retailing Honor Roll. Look for the complete list of these owner-operators and dealerships in a coming issue, and read about some of them here in Snapshot. Michael Oil & Propane appears on our Retailing Honor Roll, and owner Harry Michael appears on our Blue Ribbon Gas Man list.

This article is tagged with , and posted in Current Issue

About the Author:

Kevin Yanik was a senior editor at LP Gas Magazine.

Comments are currently closed.