Discounted fuel
28 November 2005 | 04:06 PM
#61
Originally Posted by Adam M
there is one thing I don't get, but then I never studied economics.
Can someone explain where I am going wrong please?
The sticking point for me is, what's the point? why would the petrol companies bother offering a discount to a select few who sign up for a free card? If it is because it guarantees the custom of those who use the card, then surely, if they can afford to sell at those prices, why not just drop their prices to everyone.
If one company were consistently 5p cheaper than another, apart from starting a price war, surely that would be enough in its own right to guarantee the petrol seller a much greater share of the market.
I just don't see why they need to give a guaranteed negotiated discount that is only worthwhile to them when the numbers are over a certain level, when a global price drop would pretty much guarantee them that exclusivity.
Can someone explain where I am going wrong please?
The sticking point for me is, what's the point? why would the petrol companies bother offering a discount to a select few who sign up for a free card? If it is because it guarantees the custom of those who use the card, then surely, if they can afford to sell at those prices, why not just drop their prices to everyone.
If one company were consistently 5p cheaper than another, apart from starting a price war, surely that would be enough in its own right to guarantee the petrol seller a much greater share of the market.
I just don't see why they need to give a guaranteed negotiated discount that is only worthwhile to them when the numbers are over a certain level, when a global price drop would pretty much guarantee them that exclusivity.
I guess it could be that the petrol companies don't want to start a price war and have to all drop their fuel prices thus minimising their profits globaly. If they find a group of determined folk who are prepared to commit to one company for a discount then I suppose they might rather have the business from that group of people themselves than allow one of their competitors to take it.
Just my thoughts in response to you questions...
Mick
06 December 2005 | 06:10 PM
#63
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Joined: Aug 1999
Posts: 7,957
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makes sense mick,
as does the example of the boots advantage card. perhaps you get a more guaranteed loyal following if you introduce a club memebership or a scheme. I am sure market research would show that people spend more when they feel privileged.
as does the example of the boots advantage card. perhaps you get a more guaranteed loyal following if you introduce a club memebership or a scheme. I am sure market research would show that people spend more when they feel privileged.
06 December 2005 | 06:46 PM
#64
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Joined: Sep 2005
Posts: 646
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From: 55 WRX Wagon
having thought about it, and looked into getting a shell business fuel card between me + a mate who also does big mileage, i don't think its going to work.
The shell card allows businesses spending at least £500 a month on fuel to get the card, but sells the fuel at pump price, even then you don't get a discount!
the benefit to the business is reporting, identified by registration etc and monthly billing.
i think we are better off buying fuel on a credit card which does cashback offers (i have Mint which does 1%) just make sure you pay the full bill every month to avoid interest charges.
the only cash benefit shell offer is the choice of pump price or national average price (only useful if you buy most of your fuel on motorways, where you would usually pay over the odd, but then you lose out if you buy from a pump selling at less than average)
so... probably a non starter i'd guess.
with fuel + tax prices so high at the moment there isn't much in the way of profit on fuel i hear
The shell card allows businesses spending at least £500 a month on fuel to get the card, but sells the fuel at pump price, even then you don't get a discount!
the benefit to the business is reporting, identified by registration etc and monthly billing.
i think we are better off buying fuel on a credit card which does cashback offers (i have Mint which does 1%) just make sure you pay the full bill every month to avoid interest charges.
the only cash benefit shell offer is the choice of pump price or national average price (only useful if you buy most of your fuel on motorways, where you would usually pay over the odd, but then you lose out if you buy from a pump selling at less than average)
so... probably a non starter i'd guess.
with fuel + tax prices so high at the moment there isn't much in the way of profit on fuel i hear
16 March 2006 | 01:55 PM
#65
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Joined: Dec 2001
Posts: 623
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Am dragging this one back up. I can't see the economics of this either, as I understand it there isnt 5p profit in a litre of fuel on most forecourts, so a discount of this magnitude seems unlikely.
Although I've seen Ben post alot on different forums, I've never seen him explain (or deny) the above discrepancy.
The latest email from Ben slips the date for action again to June now and his site now includes clickthroughs (presumable money-earning ones) to insuresupermarket, moneysupermarket and energywatch, all of which derive their business from clickthroughs.
Whilst I'm not being directly spammed, I'm now wondering if the above was the original intention of the site?
Although I've seen Ben post alot on different forums, I've never seen him explain (or deny) the above discrepancy.
The latest email from Ben slips the date for action again to June now and his site now includes clickthroughs (presumable money-earning ones) to insuresupermarket, moneysupermarket and energywatch, all of which derive their business from clickthroughs.
Whilst I'm not being directly spammed, I'm now wondering if the above was the original intention of the site?
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