In a moment of inspiration Donall launched an online business to plug a gap in a technologically Evolving world, and Value Oils was born. Margaret Major, Fuel Oil News editor spoke with Donall, managing director, and Andrew Higgins, marketing manager, to find out more about the move to online fuel marketing.
Andrew begins the story: “Value Oils was founded in 2006 by its current owners – over 17 years ago! Initially the business was set up to plug a gap in the market for an on-line provider in fuel distribution. Given the run-away success of the Easyjet and Ryanair models, and armed with more than 20 years of traditional fuel distribution knowledge, the opportunity was clear.
“It’s hard to believe but, way back in 2006, internet usage was still very much in its infancy and smart phones and 5G were unheard of. However, as we saw the technology improving, and being adopted in greater numbers, the concept for setting up ValueOils.com was to automate the sales process, reduce associated overheads and offer home heating oil at competitive market prices.
“Now trading under the registered brand name ‘ValueOils.com’, the company runs a successful, independent online home heating oil price comparison website across the whole UK. The business originated in N. Ireland with the brand subsequently rolled out across the whole of the UK in 2012.”
Still rooted in experience
“The initial founders are still very much involved in the day to day running of the business,” Andrew notes. “Supported by a small team of highly experienced professionals with a broad range of skillsets. The team has extensive industry knowledge and unparalleled experience of marketing and selling to the online heating oil market.”
Donall shares his own path into the industry: “I was involved in our small family solid fuel business in my younger days whilst at Queen’s University Belfast,” Donall explains. “In 1985 we established ‘Connors Fuels Ltd’ which was very successful in N. Ireland and was sold to Maxol Group in 2001.
“At that time, we operated circa 35 tankers and employed more than 100 employees. I then moved to Maxol Group, who were a great company to work for, before setting up ValueOils.com”
The time he spent in a traditional distributor business helped guide Donall in setting up Value Oils, as well as establishing good relationships with the distributor businesses it represents as he explains: “During the era of Connors Fuels, we had a great team of people and a management team who were excellent, innovative and had a great approach to customer service. We were the largest Jet / Conoco (now P66) branded distributor in N. Ireland.
“For many years, I was a member and Chairman of the Jet Distributor Council where I developed many great relationships and made many contacts across the whole UK oil distributor industry. My extensive market knowledge of the majors and mini majors as well as at distributor level was invaluable.
“This made setting up a great network of varied, quality fuel oil distributors not just easier but also very enjoyable.”
Is knowledge of the industry essential?
Andrew replies: “Our team’s in-depth experience as successful traditional fuel oil distributors has given a unique insight and understanding of the issues faced by suppliers in general. This is reflected in the design of our online systems.
“We appreciate the importance of margin to distributors, and we seek to enhance rather than erode this vital part of the formula for everyone’s benefit. Over the years, we have continuously enhanced our systems and supplier portals while striving to keep everything as user friendly as possible. This optimises time resource and enables suppliers to secure orders at attractive margins.
“Our online systems are designed to obtain all relevant information from customers to ensure that deliveries run as smoothly as possible for both suppliers and customers.”
What is Value Oils’ role in the sector?
“We see our role within the fuel industry as providing suppliers with an easy to use “bolt-on” to their own traditional and online offerings which secures supplementary sales on favourable terms,” Andrew continues. “We will continue to work well with our supplier network.
“We believe that our bespoke software is at the cutting edge of the online fuel market. We predict further consolidation in the on-line sales channel as this remains an obvious direction of travel for the key players in the market.”
How do you work with the distributors?
“After an initial consultation with the supplier, we tailor a set-up to suit their specific requirements. The supplier then simply inputs their prices and delivers the fuel!
“ValueOils.com has developed a recognised brand which is highly optimised across the UK for online heating oil searches. We also have a very substantial email database to whom we regularly market. The front end of our website allows customers to place their heating oil orders in just a matter of minutes using a mobile phone, laptop or traditional computer.
“We believe that our strengths lie in our trademarked brand, excellent reputation, customer database and supplier network.”
Are some reluctant to come on board?
“By this stage we have developed an established, mature supplier network,” Andrew answers. “We deal with a core network of quality, reliable, no-nonsense fuel oil distributors.
“There are some suppliers who chose not to work with third party channels to market and we respect their position. However, ValueOils.com is always interested in suppliers who genuinely want to work together for mutual benefit. We are always up for a chat and suppliers can easily get in touch.”
Why sell through Value Oils?
“There are many benefits for suppliers selling oil through our website, including:
• They are in complete control of the pricing and delivery windows they offer and can easily update these as required to obtain lucrative orders.
• ValueOils.com processes the customers payments, so there is no credit risk and, importantly, no card processing or banking fees to be paid by the supplier.
• With an established customer database and excellent online presence, suppliers have the opportunity to pick up orders from customers who purchase exclusively online.
• Over the years, ValueOils.com have exclusively managed many Government, council and charity contracts, available only to our supplier network.
It’s been a challenging few years. How has this affected Value Oils?
“The past few years have certainly been a rollercoaster in fuel distribution,” agrees Andrew. “From working at home with record low prices, to back in the office with record high prices!
“As the old saying goes “out of adversity comes opportunity” and this has certainly been the case for our business. The challenges faced have brought about many successful enhancements to our systems and we often wonder how we managed before we made these changes.”
Do your suppliers look after direct customers first, when supplies are low, resulting in less supply for yours?
Andrew considers this before replying. “To be honest, not at all – maybe this does happen with other 3rd party channels to market but we do not experience this. I suppose the key is that we respect our suppliers, and they reciprocate by treating us fairly.
“Scenarios such as supply issues and long delivery lead times have always been part and parcel of fuel oil distribution, but more so in the past few years. These are the parameters that we operate under. The key again is mutual loyalty and having close working relationships with a trusted supplier network and adjusting our customer offering accordingly.
“A huge element of coping is good communication with the customers and suppliers – keeping them informed and not shying away from answering phones and, finally, by not ‘over-promising’ in the first instance.”
What other challenges do customers need help with?
“The big challenge facing customers over the past year has been the cost of the fuel itself. With many customers’ household budgets stretched, offering them flexible payment options has been a key factor in successfully helping our customers manage their monthly budgets and keeping them on-board.
“We are now also finding that many customers are ordering lower volumes than they would have done historically. Customers are running out, or low, much quicker than they would have done previously. Keeping up to date with our suppliers allows us to offer a range of reliable, prompt delivery options to aid customers running low or out of oil.”
How do new customers hear about you and how much has the business grown?
“We started the business by delivering to a relatively small area around greater Belfast in 2006,” Andrew says. “And many loyal customers continue to purchase their fuel from ValueOils to this day.
“In the early stages, we ran many traditional marketing campaigns – leaflet drops, calendars, newspaper, radio advertising etc. However, as the business expanded to full UK coverage, these methods became cost prohibitive. We therefore invested heavily in our online presence. With the online market for heating oil continuing its rapid growth across the UK, this investment has certainly paid off – we consistently rank highly for all the top heating oil searches across the UK. A quick scan of our positive online reviews from customers shows that they choose us for ease of placing their order, competitive prices, deliveries coming within the stated time frame and, by working closely with our suppliers keeping the customer up to date with delivery updates.”
With the growth in online marketplaces, has home heating oil has become more of a commodity over time?
“Price, service and relationship will always play a key role in the marketing mix of home heating oil. However, over the past year with the high price of fuel and the ongoing cost-of-living crisis, the price paid for the fuel has become the number one consideration for many customers.
“As the fuel industry moves rapidly online, the relationship with the customer has evolved and changed. We keep our customers up to date with any potential supply or pricing issues, helping them to order at the right time and at a competitive price. Of course, the old customer care values of being polite, friendly, courteous and respectful never fade whether in person, on the phone, via live-chat or email!”
What do you see as the main challenges and opportunities for the industry?
“Outside of the current high prices and supply issues, we see the main long-term challenge for the industry and society in general as being the road to net zero. Unfortunately, there is no easy answer to this challenge!”
“Within this challenge, however, lies great opportunities for fuel distributors and we are sure that liquid fuels will be a key part of the solution. From our own perspective, we have flexible software which is designed to easily offer new products and services. This coupled with a large database to keep consumers up to date with the latest developments will be crucial.”
What are the most enjoyable elements of your role in the sector?
“There are a number of elements that are quite unique to ourselves and keep things fresh and interesting on a daily basis. As we deal with a significant number of suppliers and the communication with them is always interesting – it’s always great to hear how things are going in different parts of the country.
“Importantly, the innovative work we do with our developers to enhance and improve the website is really enjoyable. It is so interesting when we review the many positive changes we have implemented over the years. Such improvements help suppliers, customers and of course our internal teams.”
What’s next for Value Oils?
“The fuel oil distribution market is mature and will consolidate further over the next 10-15 years but there is still a long way to go before alternatives take the lead.
“We always look forward and steadily improve the business performance year on year. We have a small team of excellent, innovative people who are experienced and very focused on developing the business to the next stage.
“At some point in the near future, we will no doubt diversify, go on the acquisition trail or be acquired – only time will tell!”