l F O N
BUSINESS OPERATIONS
www.fueloilnews.com | FUEL OIL NEWS | NOVEMBER 2014 29
Hedging and marketing are two key pursuits that can be
honed through effective use of the Internet. Fuel oil deal-
ers can make a consistent, predictable profit margin "and
never put their company in harm's way," said Gary Sippin of
Destwin Fuel Solution, a software program for fuel marketers.
"The tools to do that largely exist on the Internet."
In his talk at the conference, Sippin focused on price pro-
tection as a sequence of events that "begins with consumer
demand and ends up somewhere at a risk desk or a supply
manager's desk, for hedging. We've connected those dots,
created a continuity that binds that entire system together
in one linear fashion," Sippin said. "One vital component to
maintaining a risk -free environment is indexed pricing. Any
type of program has to be taken from an index. In the case of
heating oil it's going to be the NYMEX or the CME, which
means as prices move up or move down, consumer prices will
float with those prices."
That accomplishes two things: it protects the dealer the
moment prices go up; and it benefits the consumer if prices
go down, Sippin noted.
The software enables "incremental hedging," Sippin said.
"As you sell, you continue to buy on a daily or semi-weekly
basis to maintain sales and hedging in lockstep. Without the
tools of the Internet that's very difficult to do. Combined with
the Internet, the software allows those tasks to be performed
in automated fashion,"Sippin said.
"For those dealers who have decided that they need to do
price protection programs, the capped price programs are
much better for the dealer and the consumer," Sippin said.
"The most profound benefit of a cap is that once you've
overcome the hurdle of explaining the cap and justifying the
fact that there's a fee—from that day forward you cannot
deliver anything to your customer other than good news."
Another speaker, Megan Smith-Gill of Gill Marketing
Group, talked about the Internet's value to marketing one's
business, especially in micro-focusing down to the indi-
vidual consumer. "There's a shift in marketing from push-
ing content out to consumers, and hoping they react to it,
toward engaging with individual customers with meaningful
information or guidance at the right moment," Smith-Gill
said. Marketing automation software—a software applica-
tion that is laid over a website—captures email addresses
and markets to individuals based on what that person has
done on the website, Smith-Gill stated. Customer service
personnel can also be trained to market on a website's live
chat site, she noted.
