New cylinder exchange delivery model increases convenience

October 2, 2018 By    
Propane cylinder delivery saves customers time and adds convenience to the cylinder exchange market. Photo courtesy of LPG2U

Propane cylinder delivery saves customers time and adds convenience to the cylinder exchange market. Photo courtesy of LPG2U

Exchange cages at local gas stations, hardware stores or retail propane operations are fixtures in the propane cylinder exchange market.

Customers bring their empty 20-pound cylinders to the cages and swap out the empty cylinder for a full one. But is there a way to make this process even more convenient? The short answer: Yes. Home delivery service is adding an element of convenience that some end users are gladly welcoming.

The Propane Guys, an operation based in Anchorage, Alaska, delivers residential and commercial pre-filled propane cylinders. Robyn Forbes, the managing partner for The Propane Guys, says the company was founded in 2015 based on this delivery model.

“We felt there were more conveniences we could add,” Forbes says. “We really just looked at that niche that wasn’t being serviced and thought we could add a different level of service to that, as well as some cost savings.”

Since 2015, The Propane Guys have provided home delivery of 20-pound cylinders and forklift cylinders to some small businesses in the area. According to Forbes, the operation currently serves about 350 customers and has used about 45,000 gallons of propane over the last 12 months.

In the Phoenix area, Wayne Wersal, the owner of LPG2U, saw a way to add an element of convenience to the cylinder exchange market and stepped in.

“You see people paying for convenience in everything around us,” Wersal says. “That is who I am marketing to: People who are looking for convenience.”

Forbes and The Propane Guys are targeting a similar group of customers.

“The customers we are looking for are the younger demographic – people who are busy, people who don’t like propane rolling around in the car,” Forbes says. “Instead, you are having a DOT and hazmat-certified driver coming in a market vehicle and delivering it while you are at work. You get home and it’s there. It is as simple as that.”

Marketing is a major aspect of this market. Converting customers to delivery as opposed to cage exchange can be challenging, but convenience is the main selling point.

Wersal says his prices are a couple of dollars more than if a customer receives a cylinder at an exchange cage, but that works with his business model.

Wersal isn’t targeting a customer who is searching for the cheapest price on propane cylinders. Instead, he is looking for the customer who is willing to pay a little more for the convenience of home delivery.

Forbes says converting a customer is sometimes a struggle for his operation.
“People want to know why [the customer] gets this value and it doesn’t seem like [The Propane Guys] get anything back,” he says.

Forbes explains that his prices are slightly below the prices of the gas station exchange cages in his area and the company can provide extra cylinders to assure there is no shortage of fuel. Sometimes customers do not understand why The Propane Guys provide such services at a different price, he adds, but it works for the company and the customers eventually warm up to the idea.

“The feedback has been so astronomically positive,” Forbes says. “Every customer we have had the chance to deliver to and work with has been absolutely thrilled with the service.”

A unique aspect of this delivery model is the digital presence of each operation.

LPG2U does not have a storefront or a physical location. Instead, Wersal receives all orders online and organizes a delivery schedule to zones around his service location.

During the summer months, he might only run a delivery to a certain zone once or twice a week. During the winter months, he runs a lot more, depending on the order volume.

The Propane Guys handle orders in a similar way, although Forbes says the company will take emails, phone calls and even text orders, depending on the customer. The company also offers next-business-day delivery.

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About the Author:

Joe McCarthy was an associate editor at LP Gas Magazine.

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