Online marketplaces are reshaping customer expectations for price transparency, speed, and convenience. While some FODs fear margin erosion and commoditisation, others see potential for access to new customers, lower acquisition costs, and streamlined order capture. This article will explore the facts, unpick misconceptions, and weigh the pros and cons, so SME FODs can make informed strategic choices.
What are online fuel marketplaces – and how do they work?
Online fuel marketplaces are digital platforms that connect fuel buyers (domestic or commercial) with multiple distributors. Streamlining the traditional fuel procurement process, these platforms enable customers to enter requirements such as their location, fuel type and quantity, and receive instant price comparisons.
The marketplaces typically manage quoting, order capture and payment. Importantly, the physical delivery always remains the responsibility of the fuel distributor.
Major UK and Irish platforms include:
- BoilerJuice: The UK’s largest independent heating oil marketplace, hosting around 200 suppliers and having processed over 1 million orders since 2004.
- ValueOils: A leading independent Northern Ireland price-comparison platform.
- HomeFuels Direct: National online heating-oil retailer with instant quotes and loyalty schemes.
- YAGRO Marketplace: Serving agricultural/commercial users through a blind-auction bid process.
Commission models differ widely, and many are not publicly available. Some platforms charge customers directly via a service charge, others add margin into the displayed customer price, while some charge suppliers “a fraction of a percentage” on successful bids.
The opportunity: volume, reach and efficiency
1. Volume gain and market reach
For many FODs, the biggest benefit is incremental volume through expanded visibility. Marketplaces connect suppliers to customers who may never have been aware of their brand – particularly digital-first domestic buyers and those outside traditional catchment areas.
Platforms are free to join, meaning customer acquisition costs can be significantly lower compared to PPC campaigns, comparison sites or traditional marketing.
BoilerJuice highlights this advantage directly: “We provide a way to compete that’s low-cost from a marketing perspective; no big PPC or search term bills.”
2. Lower administrative burden
Automated order capture, consolidated customer onboarding and service, and platform-handled payments reduce distributor admin.
For SMEs with limited office resource, this can free up time during peak periods.
3. Filling delivery gaps
Marketplaces are often used to fill quiet periods, offload surplus stock, or consolidate deliveries in new locations.
This is particularly useful for smaller FODs seeking to improve routeing density, free up working capital held in stock or take advantage of improved margins for urgent orders.
BoilerJuice notes that many partners use the platform to: “Consolidate deliveries, reduce miles per drop, increase average order size and optimise different delivery windows… significantly improving profitability.”
4. Flexible, selective use
Most platforms allow suppliers to join with no registration fee and no minimum order commitments and withdraw at any time.
This keeps control with the distributor: the platform becomes a tactical option rather than a binding channel and allows the distributor to prioritise direct sales methods when preferred,
The risks: margin compression, competition and lost relationships
1. Margin pressure
Fuel margins are already tight. Platform-imposed commissions, fixed service charges, or pricing bands can chip away at profitability – especially if distributors feel forced to price aggressively to remain visible.
Even when distributors are not charged fees with costs passed to consumers through service charges or other hidden costs, higher end-prices may deter customers from purchasing.
2. Loss of price ownership
Some marketplaces impose price ranges. With minimum and maximum price points, pricing becomes dictated by the platform reducing distributor control over pricing structure.
3. Intense price competition
Transparent, on-screen price comparisons mean FODs cannot rely on service differentiation alone. The pressure to compete on price alone can lead to decreased margin despite increased sales volume.
Smaller distributors may struggle to match the pricing power of large, multi-depot players with lower cost bases leading to potential domination by larger distributors, especially as SMEs may not be in a position to respond as swiftly as larger players to urgent delivery requests.
4. Loss of customer ownership
A key operational concern is that customer data is owned by the marketplace, not the distributor.
This limits a supplier’s ability to:
- build loyalty
- offer bespoke discounts
- offer relevant value-add services
- offer future discounts
- follow up on orders or resolve service issues directly
- differentiate through brand experience
This is not merely a commercial issue but a long-term strategic one for SMEs.
5. Operational and service demands
Marketplaces may require:
- tighter delivery windows
- specific routeing
- fast customer communication
- strict cancellation or refund processes
Smaller FODs may find these requirements challenging, especially during peak winter periods, and with some marketplaces imposing penalties for missed deliveries or service failures, this can add to operational costs.
6. Brand dilution
With limited brand visibility and lack of direct engagement, customers may remember the platform, not the supplier. This risks commoditising the market and weakening the role of local reputation.
Industry principles: what “good” marketplace participation looks like
From the analysis and FON’s discussions with the sector, several important considerations must be emphasised:
- The end customer belongs to the distributor and should be treated no differently from any other customer. Even if orders come via a marketplace, service obligations remain the same.
- Marketplaces provide a platform to connect distributors with customers; they are not, themselves, “the customer”.
- Distributors who are members of UKIFDA are bound by the trade association’s Code of Practice, reflecting consumer legislation.
- Marketplaces themselves should also adhere to all marketing legislation – including the requirement not to mislead consumers on pricing, market pressures, service standards etc.
- Distributors must only bid for what they can realistically deliver and not overextend their capability.
Platforms should operate consistent principles:
For example: If a distributor rejects a delivery for safety reasons, the customer should not be made available again until issues are resolved.
Marketplaces provide a valuable service, but it only works if everyone is clear on their role and responsibilities and the end customer is treated the same as one secured through direct sales.
BoilerJuice: Addressing industry concerns
BoilerJuice is the UK’s most prominent fuel marketplace, and we spoke with Zoe Blackhall, Chief Supply and Operations Director, to address the questions most commonly raised in our conversations with the distributor community.
Spotlight: A closer look at the UK’s largest online fuel marketplace
As the UK’s most established online heating-oil marketplace, BoilerJuice offers a useful lens through which to understand both the opportunities and concerns surrounding platform-based models. To help inform this article, BoilerJuice provided detailed responses about their role, how suppliers use the platform, common misconceptions, and the innovations they are bringing to the market. Their contributions help clarify how online marketplaces see their place within the wider distribution ecosystem.
BoilerJuice’s role in the market: “A complement, not a replacement”
BoilerJuice emphasises repeatedly that they do not view online marketplaces as a substitute for traditional distributor–customer relationships. Instead, they position themselves as a complementary channel that helps distributors connect with a “wider, digitally engaged customer base”.
They argue that consumer expectations have shifted rapidly toward instant pricing, online ordering and convenience – and that for some distributors, especially smaller operators, meeting these expectations independently can be resource-intensive.
BoilerJuice states: “Online marketplaces are increasingly becoming a valuable complement within the fuel distribution ecosystem. Rather than replacing traditional relationships, they work alongside them to help distributors connect with a wider, digitally engaged customer base.”
They suggest that technology and efficiency are key to supporting distributors in “meeting evolving customer expectations at lower cost while maintaining focus on their core business”. They also highlight their growing investment in AI-driven tools intended to help distributors “diversify offerings, reduce cost-to-serve, and enhance customer experience.”
Which distributors benefit most?
BoilerJuice believes that distributors who treat the marketplace as part of a deliberate strategy tend to see the strongest results. Their view is that the platform delivers more than just orders: it also offers efficiencies that can protect or enhance margins when used correctly.
“Distributors who embrace BoilerJuice as part of their existing business strategy often see strong returns… optimising delivery schedules, building routeing density, reaching new markets and unlocking efficiencies that offset margin pressure.”
They emphasise that benefits are not limited to large national players. Many smaller independents use BoilerJuice to:
- reach customers outside their traditional radius
- trial new areas or delivery options without major marketing spend
- increase drop density in less busy weeks
- fill tankers more efficiently
The platform maintains that its supplier model is highly flexible, allowing each individual distributor to tailor participation to their objectives.
Addressing the margin question
A recurring industry concern is the risk of margin erosion when operating in a price-comparison environment.
BoilerJuice acknowledges the concern but argues that focusing only on displayed prices overlooks the total economics.
“Competition will always exist, but we provide a way to compete that’s low-cost from a marketing perspective. We also manage the customer service and card processing costs, reducing overhead for distributors.”
By taking on customer service, payments, and some operational admin, they argue that distributors can reduce cost-to-serve – which partially offsets competitive pricing pressure.
They also stress that price is not the only lever suppliers can use on the platform. BoilerJuice highlights that many suppliers increase profitability by optimising:
- variable delivery windows
- tanker size options
- routeing and schedule consolidation
- average order size
As they note, “distributors know their business and know the market” and balancing efficient, flexibility, service and margin is “no easy feat”. The distributors who perform best often combine competitive pricing with operational excellence.
What are the biggest misconceptions?
BoilerJuice cites two primary myths they frequently encounter:
Misconception 1: “BoilerJuice is entirely price-driven.”
Their response rejects this characterisation: “One common misconception is that BoilerJuice is purely a price-driven model. In reality, our focus is on creating value… convenience, trust, and operational efficiency.”
They point to tools that allow suppliers to maintain healthy margins through operational optimisation rather than solely through price competition.
Misconception 2: “Suppliers have no influence over customer experience.”
BoilerJuice stresses that the delivery experience is owned entirely by the distributor – and the platform rewards high service standards.
“Timely deliveries and clear communication through our Order Management portal are key areas where distributors can differentiate themselves and we ensure this is rewarded through our bi-annual rebate.”
The platform sees itself as managing the digital front-end, while the supplier controls the element the customer ultimately remembers: the delivery.
How suppliers can use online marketplaces effectively.
BoilerJuice suggests that FODs achieve the best commercial outcomes when they:
- begin with a conversation to clarify goals
- configure coverage, tanker sizes, and delivery options deliberately
- engage actively with platform tools
- take advantage of monthly reviews
- use the platform for volume fill-in rather than wholesale dependency
Their guidance is simple:
“The more a distributor engages with us, the more benefits they seem to enjoy.”
They also emphasise that smaller businesses are not disadvantaged compared with larger distributors. Their model offers:
- equal visibility
- consistent tools across all suppliers
- no requirement for large marketing budgets
BoilerJuice strongly contests the idea of market dominance or supplier bias emphasising its provision of a “level playing field”.
Customer insight and data: How distributors can use it
While customer identity sits with the platform, BoilerJuice does supply partners with data-led insights that can improve planning and operational efficiency.
They highlight their efforts to offer distributors:
- postcode-level demand patterns
- seasonal buying insights
- order timing trends
- anticipated demand surges
- tools for adapting coverage and pricing
This is a growing focus for the company:
“This is a key development area for us in the coming years as we aim to bring these insights faster and more granular.”
Looking ahead: Innovation and future supplier tools
BoilerJuice outlined an ambitious roadmap aligned with supplier feedback. Upcoming and recently launched innovations include:
- enhanced KYC processes for business orders
- major upgrades to the Order Management Portal
- a fully configurable, self-serve Supplier Portal launching next summer
- support for additional fuel types
- expanded delivery options
- varied tanker sizes
- live demand insights
- notification centres
- new volume-management tools
- a new pricing initiative offering suppliers influence over platform marketing
The overarching theme is flexibility and efficiency – giving suppliers more control over how they participate.
BoilerJuice’s final advice to FODs
BoilerJuice encourages hesitant distributors to explore marketplace use without committing heavily.
“Exploring an online marketplace can be a low-risk way to grow your business – it costs nothing to explore.”
They position themselves not as a threat but as a strategic, collaborative partner helping distributors adapt to changing customer habits, reduce marketing spend, and access a large, engaged customer base at minimal up-front cost.
Summary: Menace or opportunity?
Online fuel marketplaces offer:
- access to new customers
- reduced administrative burden
- improved routeing density
- opportunities to fill delivery gaps
- lower customer acquisition costs
…but come with risks:
- margin pressure
- heightened competition
- loss of customer data and loyalty
- operational demands
- brand dilution
For some SMEs, these platforms can be a viable, profitable lead-generation tool.
For others, especially those already operating at full capacity or relying heavily on brand reputation, indiscriminate use may undermine differentiation.
Recommendations for SME FODs
1. Adopt a blended approach
Combine direct sales (for margin and relationships) with selective marketplace use balancing margin retention with market reach.
2. Trial participation in a controlled way
Choose a geography or customer type where delivery is efficient, improving your ability to compete.
3. Track margin and customer acquisition cost rigorously
Over a 3-6 month period, compare:
- base price
- commission/service charges
- delivery cost
- admin time saved
- acquisition cost vs. direct channels
4. Protect your brand and relationships
Maintain direct customers and enhance the appeal of conversion by marketplace customers by offering:
- loyalty incentives
- service enhancements
- value-added options
5. Only bid for jobs you can reliably fulfil
Safety, service quality and customer treatment must remain consistent across all channels.
FINAL THOUGHT
Marketplaces are neither a guaranteed menace nor a guaranteed opportunity.
They are a tool – powerful if used deliberately, risky if used reactively.
By understanding the way they operate, evaluating true cost-to-serve, and keeping tight control over customer experience, SME distributors can harness marketplaces to strengthen, rather than weaken, their competitive position.
Delivering Insight is your monthly business‑critical briefing for SME distributors, designed to give you clear, actionable guidance to help you work smarter and more profitably.
While larger distribution groups may have in-house HR teams, fleet managers, compliance officers and analysts, many SME FODs operate without those resources. Delivering Insight is your virtual support team – a growing knowledge base that builds into a valuable reference library, helping you make informed decisions that safeguard your business today and strengthen it for the future.
Image credit: iStock/ZeynepKaya
