Gas stations have long been synonymous with fuel and convenience store snacks. While these staples form the core of most gas station businesses, the evolving marketplace and changing consumer demands are presenting significant opportunities to further diversify revenue streams. By thinking beyond the pump and candy aisle, gas station operators can enhance profitability, attract new customers, and future-proof their business models. Nick Kambitsis explores innovative ways to expand offerings, such as car washes, co-working spaces, and partnerships with delivery services, while detailing the benefits of each.
The Need for Diversification
The traditional gas station business model faces increasing challenges. Fuel margins are often razor-thin, and competition from electric vehicles (EVs) is poised to disrupt fuel demand in the coming decades. Nicholas Kambitsis explains that convenience stores are experiencing competition from e-commerce and meal delivery services. To remain competitive, gas stations must diversify their services, catering to broader consumer needs and creating additional revenue channels.
Diversification not only cushions businesses against industry shifts but also enhances customer loyalty by transforming gas stations into multifunctional hubs. Below Nick Kambitsis shares some of the most promising diversification strategies for gas station operators.
1. Car Washes: A Tried-and-True Add-On
Adding a car wash is one of the most popular and effective ways to diversify revenue. Nick Kambitsis explains that it capitalizes on a natural synergy: customers already stop for fuel, so offering a car wash provides added convenience.
Benefits:
- High Margins: Car washes often yield higher profit margins compared to fuel and snacks.
- Recurring Revenue: Monthly subscription models for unlimited car washes encourage repeat visits.
- Bundling Opportunities: Car washes can be bundled with fuel purchases, enticing customers to spend more.
Considerations: Nicholas Kambitsis explains that operators must evaluate space availability, water and energy efficiency systems, and the type of car wash—automated, touchless, or hand-wash—best suited for their location and clientele.
2. Co-Working Spaces: A Modern Twist
As remote work becomes more common, co-working spaces are thriving. Nick Kambitsis understands that gas stations with larger footprints or those near urban areas can leverage this trend by dedicating part of their property to co-working zones.
Benefits:
- New Demographics: Attracts professionals and freelancers who may not otherwise visit a gas station.
- Cross-Selling: Co-working customers may purchase food, beverages, or fuel during their visits.
- Premium Services: Offering amenities like high-speed Wi-Fi, private meeting rooms, and quality coffee can justify higher fees.
Considerations:
- Initial Investment: Building and outfitting a co-working space requires upfront costs.
- Location Matters: Success depends on proximity to densely populated areas with limited co-working options.
3. Electric Vehicle (EV) Charging Stations
Nick Kambitsis understands that as EV adoption rises, installing EV charging stations is becoming essential for future-proofing gas stations. Though the revenue model differs from traditional fuel sales, charging stations can draw in EV owners who also need refreshments or amenities.
Benefits:
- Future-Readiness: Positioning your gas station as EV-friendly ensures relevance in a changing market.
- Cross-Selling Potential: Charging times encourage customers to explore the convenience store or other on-site services.
- Sustainability Appeal: EV charging demonstrates a commitment to sustainability, which resonates with environmentally conscious consumers.
Considerations:
- Partnerships: Collaborating with EV charging networks (e.g., Tesla, ChargePoint) can offset installation costs.
- Time Management: Charging takes longer than refueling, so stations must create engaging spaces for customers to wait.
4. Partnerships with Delivery Services
With the rise of e-commerce and food delivery apps, gas stations are well-positioned to become hubs for delivery drivers. Nick Kambitsis explains that offering services tailored to this demographic can drive consistent traffic.
Benefits:
- Increased Foot Traffic: Delivery drivers need a place to refuel, eat, and recharge their devices.
- Exclusive Deals: Partnerships with services like Uber Eats, DoorDash, or Amazon Logistics can create exclusive discounts for drivers.
- Additional Revenue Streams: Gas stations can serve as package drop-off/pick-up points, earning commissions from delivery companies.
Considerations:
- Space Allocation: Operators need to balance the needs of delivery drivers with those of other customers.
- Driver Amenities: Providing essentials like clean restrooms, parking, and quick meal options can make your location a go-to spot.
5. Food Service Upgrades
While many gas stations already offer snacks and beverages, upgrading to high-quality, quick-service food options can attract new customers. Nicholas Kambitsis explains that from partnering with fast-food chains to offering fresh, made-to-order meals, the possibilities are extensive.
Benefits:
- Higher Spending: Customers are willing to pay more for quality food.
- Daypart Revenue: Breakfast, lunch, and dinner offerings increase all-day traffic.
- Customization: Exclusive menu items can differentiate your station from competitors.
Considerations:
- Staffing Needs: Food preparation may require additional training and staff.
- Health Regulations: Compliance with food safety and health codes is essential.
6. Value-Added Services
Diversification doesn’t always require large investments. Nicholas Kambitsis has learned how value-added services like ATMs, propane tank exchanges, and lottery ticket sales can generate additional revenue with minimal risk.
Examples of Value-Added Services:
- Mobile Repair Stations: Offering basic vehicle repairs or tire air refills.
- Laundry Services: Coin-operated machines or dry-cleaning drop-offs.
- Pet-Friendly Amenities: Dedicated pet wash stations or leash-free zones for travelers with pets.
7. Community Integration: Events and Local Partnerships
Hosting events such as car shows, farmers’ markets, or food truck festivals can increase visibility and customer engagement. Nicholas Kambitsis explains that partnering with local businesses for promotions creates mutually beneficial relationships.
Benefits:
- Brand Building: Events position the gas station as a community hub.
- Customer Loyalty: Engaged customers are more likely to return for other services.
- Cross-Promotion: Partnerships with local businesses expand your reach.
Considerations:
- Marketing Efforts: Events require promotion to ensure strong attendance.
- Seasonal Appeal: Certain activities may be more successful in specific seasons.
Fueling the Future with Innovation
Diversifying revenue streams is no longer just an option for gas station operators—it’s a necessity in today’s competitive and rapidly changing landscape. Nick Kambitsis emphasizes that by expanding into areas such as car washes, co-working spaces, EV charging stations, and delivery service partnerships, operators can create resilient businesses that appeal to a broader customer base. The key to successful diversification lies in understanding your target market, evaluating your resources, and embracing innovation. Nicholas Kambitsis understands that with the right strategies, gas stations can evolve from traditional fuel stops into thriving, multi-functional destinations for modern consumers.
