b'WPMA Associate News Calculating Capacity Utilization for Fuel RetailersHow many gallons are you selling every day, and how many could you be selling?By Kevin Hart, The most expensive assets on all fuelEvery minute a pump stays empty, youre notUpside Senior retailers books are their land and equipment. using your land and equipment to their fullVice President of Sales Retailers often spend more than half their grosscapacity, effectively leaving additional operating profits (fuel retail prices depending) to pay offincome on the table.these assets through mortgages, interest, rent, We call this capacity utilization. Its a fundamen-and other long-term capital expenditures. tally different way to think about your business. Despite the inflated costs for these assets, few When you increase capacity utilization, thestation owners track or measure daily utilization.financial results speak for themselves.Capacity utilization: How much of a potential pump hour is spent actively pumping gasAt Upside, we use transaction data to analyze on-site activity for an entire 12-month period to get a holistic view of your sites overall performance. Heres how it works:Average capacity utilization: Rush hour capacity utilization:First, Upside determines a sites maximum Upside calculates a separate average for these capacity. To do this, we process their hour-high-volume sales times to get a clearer pictureby-hour transactions over a year and identify of daily performance. To do this, we identifythe single hour with the highest number of the three hours (often non-consecutive) withtransactions or gallons sold. From there, we tallythe highest volume of transactions or gallonsthe number of transactions or gallons sold everysold, tally up the totals, and divide byother hour the station is open and divide the totalmaximum capacity. number by the max capacity. Remember this formula for how to calculate capacity utilization:Capacity = the maximum possible transactions in an hourUtilization = the average transactions in an hour divided by capacityHow Upside helps you increase capacity utilizationWith access to transaction data from more This is a problem set we work through every daythan 30,000 retailers across the nation (roughlyat Upside. We use data and machine learning to20% of all gas stations), Upside found that average generate personalized promotions that drivecapacity utilization is only 24% on a given day. customers to your location. This means retailers, on average, have 76%of total capacity going unused. Join the Upsidenetwork! Visit booth #527 at theWPMAEXPO show or visitwww.upside.com/business/gasto learn how Upside can help you profit at the pumps.S46 www.wpma.com / Winter 2022'