As the lines between traders, suppliers and traditional petroleum marketers become less clear, resellers (those selling product to other marketers) are at the forefront of a supply chain in which communication is key—to customers, margins and better efficiencies. For resellers, it is imperative to meet their expanding customer base with industry tools and strategies, while keeping customer relations at the center of your operation.
Defining a Space
Resellers have an important, growing role in the refined-fuels industry. Providing a convenient, cost-effective alternative for customers, resellers are often the most attractive option for buying fuel. But resellers also face a slate of unique challenges and must ensure they stand out at the top of a customer’s list while protecting razor-thin margins.
In today’s market, resellers aim to drive a profitable, sustainable business by acquiring fuel to sell to other companies. These companies demand the added assurance of partnering with a trusted reseller that will provide them with the best option, paired with a seamless transaction. Resellers and their customers shop for value and are charged with surveying the market for the best deal that will create a strong supply and profit in sales.
Customers desire hassle-free transactions they can quickly and confidently complete with ease. They require their pricing, invoices and now bills of lading (BOL) be received electronically, as they do from major oil companies. With the expansion of services previously used only by suppliers, this expedites everyone’s process, improves accuracy and enhances the overall customer experience.
The electronic BOL is especially having an effect. As trucks load product, the exact representation of what is loaded can be sent to both the reseller and customer, often before the driver leaves the terminal. Resellers can invoice customers without waiting for more supplier paperwork, speeding up cash flow and allowing them to have tighter financial control in the pricing and payment process. Faster invoicing allows the buyer to invoice their own customers accurately and efficiently.
Ensuring Supply
While price is the biggest factor in the buying decision, confidence that the product is available is still critical. Because most of the product sold technically belongs to others, resellers must have solid supply relationships while watching daily availability. Buyers won’t buy if you don’t have supply. Protecting volume is possible using product allocations that allows for reserving gallons needed for deliveries, gallons for contract customers and the rest for uncommitted buyers.
Using more advanced tools such as allocation systems and viewers helps manage and track daily availability from supply sources in real time. Resellers can know who pulled what and when, long before an unhappy phone call from a customer or paperwork arrives. When alerts or allocation viewers can share this with customers in advance, their confidence in buying from you increases tenfold.
Because resellers sell product directly at the terminal to customers lifting on their accounts (most often with other suppliers), they are met with a significantly greater risk for buyers to exceed credit limits. Using the same tools as suppliers, they should impose credit allocations along with product on prearranged controls to manage that risk in real time across all terminals regardless of the operator.
Building Trust
Providing customers with convenient, advanced tools that are easily usable, matched with superior communications, is invaluable. Resellers provide solutions that are most effective when the communications are streamlined. Using effective, honest communication to foster a positive relationship with customers is key to sustaining a reselling business.
To maintain strong business relationships with customers, resellers should be aware of available inventory so they don’t miss out on an opportunity. Transparency with customers is the most effective way to build trust. Prioritizing volume for top customers is another way a reseller can strengthen loyalty.
Managing risks while gaining a competitive advantage is how a reseller stands apart. Resellers aspire to be the trusted partner with available quantity and up-to-date, timely information on product and existing credit.
From creating seamless transactions to improvement in product and credit management, resellers use industry tools and strategies to gain a business advantage and reduce their risks. These added benefits will not only make resellers more marketable to consumers, but also will help manage workloads and profit and keep business moving forward.
Cathy Duncan is vice president, downstream oil & gas, for Schneider Electric. Reach her at cathy.duncan@dtn.com.
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