Owning a convenience store and gas station is one of the most popular small-business investments in North America. With steady customer demand, recurring revenue streams, and the ability to diversify services, this business model attracts first-time buyers and seasoned investors alike.
But while it can be lucrative, purchasing a gas station and convenience store requires due diligence, financial planning, and a clear understanding of industry data. In this guide, we’ll explore why investing in a gas station convenience store is profitable, key financial stats, what to look for as a buyer, and how to close a successful deal.
Why Buy a Convenience Store and Gas Station?
- Steady Consumer Demand – Fuel is essential, and convenience items (snacks, beverages, tobacco, lottery tickets) generate consistent sales.
- High Frequency Purchases – Unlike other retail businesses, customers return multiple times per week.
- Cash Flow Business – Daily sales mean steady cash flow compared to seasonal businesses.
- Upselling Opportunities – Buyers can add car washes, fast food franchises, or delivery services for extra revenue.
Industry Statistics – Why the Market Matters
According to IBISWorld and NACS (National Association of Convenience Stores):
- The U.S. convenience store industry generated $906 billion in total sales in 2022.
- More than 148,000 convenience stores operate nationwide, with gas stations making up about 80% of the total.
- Fuel sales account for ~60% of total sales revenue, while in-store items (snacks, coffee, alcohol, lottery) make up the rest.
- Average convenience store sales per year: $2–$4 million (depending on fuel volume and location).
- In Canada, convenience and gas station stores represent over $30 billion in revenue annually.
Key Advantages for Buyers
1. Recession-Resistant Business
Fuel demand remains steady even during economic downturns. People need gas to commute, and convenience stores thrive on small, daily purchases.
2. Multiple Revenue Streams
- Fuel sales
- In-store products
- Lottery and tobacco
- ATM and bill payment services
- Food service, coffee, and quick meals
3. Real Estate Potential
Many gas stations include property ownership. Real estate value alone often appreciates, making it a dual investment.
What Buyers Should Consider
Before you buy a convenience store and gas station, evaluate these critical factors:
1. Location
- High-traffic intersections or highways are ideal.
- Proximity to residential areas ensures recurring customers.
2. Fuel Volume
- Stations selling >80,000 gallons/month generate significant margins.
- Understand supply contracts with fuel distributors.
3. Inside Sales
- Profits on in-store items often exceed those from fuel sales.
- High-margin products: coffee, snacks, and prepared foods.
4. Environmental Concerns
- Ensure tanks are up to regulatory standards.
- Conduct an environmental site assessment (ESA) to avoid liability.
5. Financial Records
- Review 2–3 years of sales data.
- Check profitability by separating fuel vs. convenience store earnings.
Financial Snapshot for Buyers
- Gross Profit Margins:
- Fuel: 8–12 cents per gallon (small margin, but high volume).
- Convenience items: 25–35% average margins.
- Business Value Multiples:
- Typically valued at 2.5x–3.5x EBITDA (Earnings Before Interest, Taxes, Depreciation, Amortization).
- Down Payment:
- SBA loans (U.S.) require 10–20% down payment.
- Return on Investment (ROI):
- Average ROI for a well-run gas station: 15–25% annually.
Steps to Buy a Convenience Store and Gas Station
1. Research the Market
Analyze locations with high traffic, low competition, and strong community demand.
2. Secure Financing
Options include SBA loans (U.S.), bank loans, or seller financing.
3. Conduct Due Diligence
Review:
- Sales and profit history
- Fuel supplier agreements
- Employee costs
- Property lease terms
4. Hire Professionals
Engage a business broker, accountant, and lawyer with gas station transaction experience.
5. Negotiate and Close
Finalize purchase price, transfer licenses, and establish supplier relationships.
Opportunities to Increase Revenue After Purchase
- Add a car wash service.
- Partner with food brands (Subway, Tim Hortons, Dunkin’).
- Introduce delivery and mobile payment options.
- Expand product lines to include fresh food and groceries.
- Invest in EV charging stations to prepare for the electric vehicle market.
Risks and Challenges for Buyers
- Thin Fuel Margins – Most profits come from in-store sales, not fuel.
- Rising Competition – Competing stations and wholesale clubs (Costco, Walmart).
- Regulatory Compliance – Fuel storage, alcohol/tobacco sales, and employment laws.
- Staffing Issues – Recruiting and retaining employees in a 24/7 business.
FAQs About Buying a Convenience Store and Gas Station
1. Is buying a gas station profitable?
Yes. A well-located gas station with high fuel volume and strong convenience store sales can generate consistent profits. While fuel margins are low, inside sales provide strong profits, and property ownership adds long-term investment value.
2. How much money do I need to buy a convenience store and gas station?
The cost varies widely. Smaller rural stations may sell for $500,000–$1 million, while urban stations with property can exceed $5 million. Buyers typically need 10–20% of the purchase price as a down payment for financing.
3. What are the biggest risks in owning a gas station?
Key risks include environmental liabilities (underground tanks), fluctuating fuel prices, and heavy competition. Buyers should invest in due diligence, purchase insurance, and diversify income with strong convenience store sales to reduce risks.
4. How do convenience stores make the most money?
Convenience stores profit most from high-margin items like coffee, snacks, prepared foods, and beverages. While fuel draws customers in, most of the profits come from in-store sales, which often provide margins three times higher than fuel.
5. Should I buy a branded or independent gas station?
Branded stations (Shell, Exxon, Esso) offer name recognition and strong supply chains but come with strict contracts. Independent stations allow more flexibility in pricing and sourcing but require stronger marketing to attract customers.
6. How do I increase sales after buying a gas station?
Add complementary services like car washes, food franchises, or EV charging. Improve store layout, run loyalty programs, and market promotions on fuel discounts tied to in-store purchases to boost revenue and attract repeat customers.
7. What is the ROI on buying a gas station convenience store?
ROI depends on location, sales volume, and management. On average, owners see 15–25% annual returns. The business’s dual-income structure (fuel + retail sales) makes it an attractive investment for long-term profitability.
8. How important are environmental checks before purchase?
Critical. An environmental site assessment (ESA) ensures underground tanks are safe and compliant. Failing to check can result in liability costs in the hundreds of thousands, which may fall on the new owner if not addressed before purchase.
9. Can I run the business without prior experience?
Yes, many first-time business owners succeed. However, training in store management, fuel systems, and inventory is vital. Hiring experienced staff or working with the seller during a transition period can smooth the learning curve.
10. What future trends should buyers consider?
Electric vehicle (EV) charging, digital payment systems, and expanded fresh food options are shaping the future. Buyers who adapt quickly—such as adding EV chargers and modernizing their convenience offerings—will have a competitive edge.
Conclusion
Buying a convenience store and gas station can be one of the most profitable investments in today’s market. With steady demand for fuel and everyday essentials, these businesses offer reliable cash flow, strong ROI, and long-term real estate value.
For buyers, success depends on location, due diligence, and maximizing in-store sales. By understanding industry data, managing risks, and adding modern services, investors can transform a gas station into a thriving, multi-revenue business.
The information provided in this blog is for general educational purposes only. While we have included industry data and financial insights, figures may vary depending on location, market conditions, and individual business performance. We do not claim exact accuracy of all data points. Readers should conduct independent research and consult qualified professionals before making investment or purchase decisions.