How is the Price of Gas Affecting Your Business?

On our sister Website at http://www.marketnews.ca/, Lee Distad looked at the price of gas and how it's affecting the custom installation business; and gave some tips on how to help your business save money. Installation staff and salespersons are most certainly feeling the heat, since they're quite often on the road visiting clients. But there are other areas of the CE business that's feeling the gas gouge just as hard, if not harder.

Sales representatives are the first people that come to mind, many of whom work independently, and spend a huge chunk of their time driving from store to store. At my last fill-up in Toronto, gas was more than $1.30/litre! This has to put a dent in their wallets, not to mention cause their visits to become few and far between. Can this lead to strained relationships with dealers? After all, if Bob the Sales Rep used to visit every week, and now all of a sudden he's only in once a month, can this be wrongfully interpreted?

Then we get to delivery guys. Can retailers, especially small independents, continue to offer free delivery services to customers when the price of gas keeps inching higher and higher? Where will these extra costs be placed? On the price of the product itself? Or will retailers simply have to "eat" the extra few bucks per delivery? It might not sound like a lot, but it adds up.

That leads to the manufacturers/distributors who often ship products through third-party courier services. Are they charging additional transport fees to the retailers? Will couriers increase prices to offset the growing numbers at the pump?

As you can see, the rising price of gas affects more than just the consumer. So if you're buying a big ticket item and have to pay for delivery when you never had to before, don't blame the retailer, at least not during these trying times. And if you don't have to pay, appreciate that offering even more now. As for retailers, if your sales rep is skimping on visits as of late, it probably has nothing to do with your relationship, or your importance as a business partner.

Let's hope that pricing comes down to a reasonable level soon. Thankfully, it's summer in Canada, so we're bound to see more and more bicycles and roller blades on the streets anyway. And with the current price of gas, we might see more of these alternative means of transportation than ever these days!

Price of Gas Could Reach $2.25!

Hybrid vehicle sales might soon skyrocket as Canadians stare in awe at the continuallly rising gas prices. A new report released by CIBC World Markets predicts that we won't see an end to this rise any time soon, with prices potentially reaching as high as $1.80 this summer, and up to a whopping $2.25 by 2012!

CIBC says that tight oil supplies are the cause, given that production has not increased for more than two years, while oil consumption has no doubt increased.

"Whether we have already seen the peak in world oil production remains to be seen, but it is increasingly clear that the outlook for oil supply signals a period of unprecedented scarcity," explained Jeff Rubin, Chief Strategist and Chief Economist at CIBC World Markets. "Despite the recent record jump in oil prices, oil prices will continue to rise steadily over the next five years, almost doubling from current levels."

From an industry standpoint, there will be plenty of folks feeling a major hit. On the road sales reps and other professionals. Field workers and installation staff. And even just those who commute into the office from out-of-town homes. $2 a litre could easily mean more than $80 just to fill a standard-sized vehicle!

Hopefully something changes soon, or we'll definitely be seeing a lot more hybrid electric cars and bicycles on the road, along with a public transit system that's even busier than it is now. Not that any of these is a bad thing, but it simply isn't feasible for some.

As an aside, the whole situation reminds me of a cartoon I saw once (not the one above) that depicted a man pumping gas while removing his arm and leg for payment. Indeed.