Immigrant C-store Owners Team Up for Buying Consortium
NEW YORK -- More than 50 Turkish immigrants that own convenience stores across New York and New Jersey joined to form a buying consortium, and if successful, will create their own brand of convenience stores, reported the Herald News.
The idea for a Turkish-run consortium began four years ago, but came to the forefront as gas prices rose, Fenerbahce Salim Gorur, the group's leader, told the Herald. The group's first effort is securing supplies such as packaged snacks and beverages directly from a distributor, regardless of which brand of gasoline they are affiliated with.
"The first step is to save our business. We are suffering. A lot of people are losing their businesses," said Gorur, whose stations are located in the New York metropolitan area. "The small guy gets killed, and the (oil) company gets billions and billions."
"If we eliminate the middle man, we'll have direct buying power, and that way, our profit margin will be much bigger than it is today," he said.
"The most important part of this project is to start by being a wholesaler in the convenience store part," Gorur said. "The gas part is very hard -- that will be the second part." If the beginning plans are successful, the group would seek to buy and distribute gas among Turkish-owned stations, he said.
Over the last 10 years, Turkish immigrants have become a significant player in the tri-state convenience industry, according to Gorur. He noted that dealer-owned stations and those with flexible leases with that allow operators to choose their own brand of store would have an easier time joining the consortium than those that are not.
The idea is profitable for some gas retailers in the area. Mehmet Ibis, a Gulf-branded gas station in Piscataway, N.J. is eager to join such a group. "It's a good idea, just to stick together. I have to buy from somebody, and if you have an organization like that, I'd rather buy from them," he told the Herald.
But some who want to join the group cannot, due to their station's lease agreements. "I'd want to join, but in my position, it's hard; it's impossible," said Sebahattin Dogan, operator of a Gulf station in Wayne, N.J. His restrictive lease with the oil supplier makes him ineligible to join the group. He noted that the environment in New York makes it easier to join, because many operators own their property, while in New Jersey, many lease.
The trend of creating buying consortiums was big 10 to 20 years ago, when restrictions and accounting principles were more lenient, according to Mike Zielinski, president of the Royal Buying Group. "There was no scrutiny from the government, there were a lot of people that tried to put together programs," he told CSNews Online.
"Now the barrier to entry is a lot greater. It's not that they can't create one, but in order to get respect and attention from the supplier community, they have to do things right," he said, noting that there will be many attempts at creating such groups.
Consortiums must register as a corporation and pay taxes, are subject to audit and must correctly follow promotional spending, Zielinski said. "It takes a lot to make it happen. Anyone trying to start a group, without those controls in place, might have hard time getting noticed by the supplier community," he added.
He noted that smaller groups, like anything else, have to continuously grow to become successful. "I'd say smaller groups are failing more than they are succeeding, because they need to be so large."
Even if many independent operators join the group and plans are successful, the real challenge is accommodating everyone, said Jack Tabibian, who owns stations in Little Falls and Fairfield, N.J. "I even thought about doing something like this, but the kind of people we are -- gas station owners -- everybody's a boss," he told the paper.
"Anyone who is successful doesn't really want to hear from other people how to do stuff," he added.
The idea for a Turkish-run consortium began four years ago, but came to the forefront as gas prices rose, Fenerbahce Salim Gorur, the group's leader, told the Herald. The group's first effort is securing supplies such as packaged snacks and beverages directly from a distributor, regardless of which brand of gasoline they are affiliated with.
"The first step is to save our business. We are suffering. A lot of people are losing their businesses," said Gorur, whose stations are located in the New York metropolitan area. "The small guy gets killed, and the (oil) company gets billions and billions."
"If we eliminate the middle man, we'll have direct buying power, and that way, our profit margin will be much bigger than it is today," he said.
"The most important part of this project is to start by being a wholesaler in the convenience store part," Gorur said. "The gas part is very hard -- that will be the second part." If the beginning plans are successful, the group would seek to buy and distribute gas among Turkish-owned stations, he said.
Over the last 10 years, Turkish immigrants have become a significant player in the tri-state convenience industry, according to Gorur. He noted that dealer-owned stations and those with flexible leases with that allow operators to choose their own brand of store would have an easier time joining the consortium than those that are not.
The idea is profitable for some gas retailers in the area. Mehmet Ibis, a Gulf-branded gas station in Piscataway, N.J. is eager to join such a group. "It's a good idea, just to stick together. I have to buy from somebody, and if you have an organization like that, I'd rather buy from them," he told the Herald.
But some who want to join the group cannot, due to their station's lease agreements. "I'd want to join, but in my position, it's hard; it's impossible," said Sebahattin Dogan, operator of a Gulf station in Wayne, N.J. His restrictive lease with the oil supplier makes him ineligible to join the group. He noted that the environment in New York makes it easier to join, because many operators own their property, while in New Jersey, many lease.
The trend of creating buying consortiums was big 10 to 20 years ago, when restrictions and accounting principles were more lenient, according to Mike Zielinski, president of the Royal Buying Group. "There was no scrutiny from the government, there were a lot of people that tried to put together programs," he told CSNews Online.
"Now the barrier to entry is a lot greater. It's not that they can't create one, but in order to get respect and attention from the supplier community, they have to do things right," he said, noting that there will be many attempts at creating such groups.
Consortiums must register as a corporation and pay taxes, are subject to audit and must correctly follow promotional spending, Zielinski said. "It takes a lot to make it happen. Anyone trying to start a group, without those controls in place, might have hard time getting noticed by the supplier community," he added.
He noted that smaller groups, like anything else, have to continuously grow to become successful. "I'd say smaller groups are failing more than they are succeeding, because they need to be so large."
Even if many independent operators join the group and plans are successful, the real challenge is accommodating everyone, said Jack Tabibian, who owns stations in Little Falls and Fairfield, N.J. "I even thought about doing something like this, but the kind of people we are -- gas station owners -- everybody's a boss," he told the paper.
"Anyone who is successful doesn't really want to hear from other people how to do stuff," he added.