In the United States, newspapers are challenging to sell in convenience stores. The news cycle moves and expires quickly, margins are low and the price is fixed (printed right on the front page).

Scan-based trading (SBT), a business model where product is owned by a vendor until it is sold at retail, became a way to make the newspaper business work in convenience stores. With SBT, newspapers are the property of the publisher, and the retailer keeps a percentage of the profit after the sale. The publisher is responsible for stocking and removing any papers that don’t sell.

Ice, propane and novelties also benefit from the SBT model. As SBT continues to grow, it could play a larger role in the future of c-store retailing, according to executives from Fintech and Circle K.

Garry Carter, Circle K’s director of center store, said that the retailer is finding success with SBT as a tool to customize and experiment at the local level, with the insights funneling to the Circle K team. It’s also a way to work with smaller vendors in specific areas and create hyperlocal experiences for customers.

SBT retail sales at Circle K have increased in the past 10 years, up about six-fold in that time as new categories such as general merchandise and floral open up to SBT.

SBT can be used for “almost anything in the store outside of tobacco and alcohol,” said Mark Landgren, Fintech’s senior vice president and general manager of SBT. “We’ll do bananas, for example, or donuts. It’s primarily DSD products, but we do chips, salty snacks. We’ve done some packaged beverages.” He said that retailers with as few as 25 stores have successfully used SBT.

SBT also helps a retailer become nimbler: Less inventory means more money for other needs. Inventory and real estate are among a retailer’s largest assets, “and since they’re illiquid, it keeps a lot of cash that could be used for stronger ROI out of the convenience stores’ hands. As soon as you put products on SBT, it opens that up,” Landgren said.

For suppliers, one key benefit is better control over product merchandising. “They are the subject matter experts. It gives them more autonomy to work locally with the retailer to customize assortment on a store-by-store basis,” said Carter of Circle K. This can benefit hyper-localized merchandising strategies, as a store in one neighborhood may require different products than a store a few miles away.

Illustrating the benefit, Landgren shared an example of how a propane vendor using SBT can determine when product needs to be replenished, and plan supply routes based on data shared by the retailer. As a bonus, the propane company does not have to rely on a store employee to count the product.

Grocery stores and other retailers also are expanding the use of SBT. “It’s becoming commonplace with the suppliers, so it’s not as odd of an ask as it used to be,” said Tad Phelps, CEO of Fintech.

Landgren believes SBT will help c-stores evolve. Should a retailer begin selling more merchandise on the forecourt, SBT could be a way to experiment with different products while leaning on the expertise of a supplier partner. For example, selling seasonal products like firewood that rely on small local vendors to source.

Carter stressed that SBT should be a win-win. “With control in the hands of people who know their business best, they have a path to succeed. We’ve seen that happen.”