James Hiatt

San Diego, CA (USA)
Role(s):
Founder/Owner/Principal

Gas Plus Vending

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Location: San Diego
Industry: Other
Year Founded: 2012
Number Employees: 1-10 people
Business Stage: Creation/Idea
Entity Type: Limited Liability Company
Description: Angel Investor Capital Required: $1,000,000 Required Follow-On Funding: $0 Internal Rate of Return (IRR): 91% Net Present Value (NPV): $16,566,273 Forecasted Investment Period: 5 years Forecasted Multiple of Return to Investors: 82X Gas Plus Vending - Bringing the convenience store to the customer. Think about the last time you were filling up your tank. Some folks fill their time by washing windows or checking their phone, but mostly we just stare blankly at the gallons ticking by. Now what if there was a touch screen right next to the hose with a picture of different cold drinks? All you would have to do is tap the picture of the beverage and one will pop out right there. No convenience store lines, no parking lot chaos, no added time at the station. The Gas Plus Vending solution is a no cost way for gas stations to increase their profit by targeting the cashless customer who does not traditionally enter the convenience store. We do this by bringing the convenience store to the customer. Problem Everyone with a car makes, on average, 1.3 visits to a gas pump weekly. The current reality is that the gas stations they patronize realize a profit of only 2 to 4 cents per gallon on “pay at the pump” credit or debit card transactions. Much higher profit margins are realized from any non-fuel purchases that may be captured in connection with the fuel stop. Unfortunately, due to the increased use of cashless fuel transactions, time constraints, children in the vehicle or a multitude of other reasons, customers are becoming less and less likely to leave their vehicle to enter the convenience store upon completion of a fuel purchase. In fact, only about one third of the pay at the pump customers currently makes non-fuel purchases during their stop. Research has indicated that many of the other customers would be willing to make retail purchases if not for the added hassle. While fuel sales account for over two-thirds of the gross revenue across all convenience stores, they only account for a little over one-quarter of the average store’s profit. Given that the average pre-tax profit from fuel sales per station is only around $40,000, profits from non-fuel sales are not only significant but can be critical to the overall success of the business. Solution The Gas Plus Vending solution brings the convenience store to the customer by placing vending machines filled with cold beverages on the pump island. The system allows consumers to select, purchase and receive a beverage while fueling their vehicle. This gives the gas station a way to capture incremental profit from those customers who would not otherwise make a non-fuel purchase. In fact, the system is more than just a vending machine in a new location. Each vending machine is controlled by a touch screen interface at the pump that catches the eye of consumers as they fuel their vehicle, leading to higher customer conversion rates than a passive vending machine. Consumers make both planned and unplanned purchases, but it's the unplanned purchases that are most susceptible to influence by effective, well-executed marketing and advertising. The relatively large amount of time that the consumer spends at the pump creates a prime opportunity to engage this captive audience. Business Model The core value of the Gas Plus Vending system is to add incremental revenue to the gas station without financial risk to the station owner. We do this through a combination of proven recurring revenue models: beverage sales, gas station advertising and collecting consumer data. Currently we have access to the only vending machine that is UL approved for use on a gas station island, the Royal GIII Gas Island Vendor To find out more contact us. (URL removed) Jim Hiatt – Former USMC Aviator (MBA, University of Chicago) Ben Folkers – Former US Navy Aviator (MBA, UC San Diego)