Inventory Reconciliation

Multiple tanks and dispensing combinations may require changes to how the station tracks fuel inventories.

Keep in mind that inventory reconciliation using two tanks and up to five different dispensing combinations can become complicated. A station may have to make some changes in how it tracks its fuel inventory. Most point-of-sale systems that support blender pumps will also provide the appropriate information for balancing inventories, but in some cases those reports have to be activated.

One of the issues experienced by retailers who offer E85 as a “stand-alone” product is that the time between deliveries of the fuel sometimes leads to a fuel cost that is not in line with other products. For example, an E85 retailer who purchases 3000 gallons of E85 at a time, but takes several weeks to sell that amount could see the price of other products rise or fall dramatically in the time between loads. That leads to situations where the retailer has to decide whether to follow other retail prices and make much higher or lower margins, or to sell based on cost, making the product expensive in a “down” market or dramatically inexpensive in an “up” market.

When E85 or ethanol is sold through a blender pump, because it also becomes the ethanol sold in E10 and any other blends offered, its turnover is closer to that of the other products. Additionally, its cost stays more in line with those other products, giving the retailer the ability to market E85 in much the same way they previously sold premium or midgrade.

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