How a Wholesaler Found the Dealers Its Own Prices Were Pushing Away
Use case Dealer & rack pricingFuel wholesaler, 180 dealers
How a wholesaler found the dealers its own prices were pushing away.
Every unbranded dealer paid the same margin over rack. Cortex compared each dealer’s street with the stations around it, and found prices costing volume in some markets and leaving margin behind in others.
The difference
Same question. Different results.
The question“Which dealers are we pricing out of their markets, and which can carry more margin?”
Claude / GPT / Public LLMs
Uploaded file
Answer
Every dealer is priced at the same margin over rack. Volume is down at 31 dealers, so consider allowances for them.
Just an answer.
Cortex AI
Connected intelligence
Cortex AI- Dealer street prices
- Nearby station prices
- Shared drivers
- Rack prices
- Road traffic
- Volume trends
- Allowance history
- Brand presence
- Local demand
- Weather
- 31 dealers 4.1¢ above their street
- 24 dealers 5.2¢ below everyone
- 2 branded rivals cutting hard
Answer
Price each dealer for its street. Lower the band for 31 squeezed dealers and raise it 1 to 2 cents for 24 with room. The other 125 are right. +$510K a year.
A decision.
01 · The challenge
One margin over rack, for every dealer, everywhere.
The wholesaler priced every unbranded dealer at the same margin over rack. It was simple to run and easy to explain, but dealers on competitive streets kept asking for allowances, and some quietly started buying elsewhere.
Meanwhile, dealers in markets with little competition paid the same margin as everyone else, even though their pump prices sat comfortably above every station nearby.
- Dealer volumeDown at a third of dealers
- Allowance requestsUp every month
- Dealer street pricesNot tracked
- InstinctGive allowances to the loudest dealers
02 · The finding
The same margin meant very different things on different streets.
Cortex compared each dealer’s pump prices with the stations that share its drivers, then worked back to what the dealer could pay at the rack and still compete. It added each dealer’s volume trend and allowance history.
The squeezed dealers were concentrated where two branded stations had been cutting hard. The underpriced ones were rural and highway sites with no close competitor.
03 · The decision
Price each dealer for the street it competes on.
- Set dealer margins in three bands, reviewed weekly against each dealer’s street.
- Replaced ad-hoc allowances for the 31 squeezed dealers with a lower band tied to volume.
- Raised the margin 1 to 2 cents for the 24 dealers with room, and gave account managers the street data to explain it.
04 · The impact
What changed.
Your price is your dealer’s cost. Price it for their street.
One margin felt fair. It was fair to our spreadsheet, not to dealers on competitive streets.
A dealer can only sell what the street will take. The wholesaler who prices for that keeps the dealer and the volume.
