Ben Gilbert

The gas is a pure commodity.

You're selling against other gas stations in the area.

This is where you can actually make some real margin dollars.

Wow.

Now, there is still that one term of the deal that was, we will always sell a gallon for a dollar.

That starts to become problematic with inflation.

You want the ability to change the price at some point over several decades.

And so it's pretty interesting to think about the two sides of the coin of having to sell it at $1 in perpetuity.

The con is obviously, well, inflation's going to happen, and so our margins are going to get squeezed, where it's just going to cost more and more and more to make Coca-Cola.

The bet that they basically were making is, well, since we can't raise prices at all, we need to scale to amortize all of our fixed costs and get greater and greater economies of scale on manufacturing.

And so it sort of forced them into this massive scale mentality that they were already sort of in.

They wanted to be the one Coca-Cola for the world.

But this really backed him into that strategy as you don't have another strategy.

Your economies of scale in manufacturing need to outpace inflation.

So get going.

Which is so funny you say pricing power because it's not more expensive.

In fact, it's most often far less expensive than the competition.

Yep.

Coke can be profitable at way lower end consumer prices than the other subscale companies.

It's like they actually have pricing power that they're not using.