Welcome to the Kotke Ride Home for Tuesday, September 14th, 2021.

I'm Jackson Bird today.

How gas stations actually make money and their prospects for the future.

Steve Wozniak says, don't mess with space, and a timeless question for the ages,

how many smores could you make from the giant stay-puffed marshmallow man from Ghostbusters?

Here are some of the cool things from the news today.

You know the refrain that movie theaters don't make their money from the ticket sales, but rather from concessions?

That's not exactly true. The profit margins are much higher on concessions, sure, but they still make a lot more of their profit from ticket sales than people tend to think, especially ever since that secret fact started

getting thrown around. But one place that really does rely on their version of concessions for

profit, gas stations. According to Zachary Crockett in The Hustle, gas stations are only taking

home a small fraction per gallon of gas sold. And when the price of oil goes up, they might even

be losing money. Quote, according to Ibus World, gas stations make an average net margin of just

1.4% on their fuel. That's far lower than the 7.7% average across all industries and ranks

beneath other notoriously low margin

businesses like grocery stores at 2.5 percent and car dealerships at 3.2 percent, end quote.

First, Crockett points out that the majority of gas stations in the U.S. at least are owned by

individual operators who only own one station. So these are people who are franchisees for

name brand oil companies like Shell, Chevron, or Texaco, and some others run their own generic

places and buy gas themselves on the open markets. So when we're talking about operators

losing out on money here, we're not necessarily talking about the giant corporations, but kind of for some small businesses.

But how do they end up with such a small fraction of the profit?

Crockett breaks it down like this. Let's say you buy a gallon of gas for $3.18, a steel here in New York City.

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