How much does a Compressed Gas Cylinder Delivery cost to buy?

A typical Compressed Gas Cylinder Delivery sells for 2.5x to 4.5x annual revenue. With average revenue of $900K, expect to pay $2.3M to $4.0M.

How much does it cost to start a Compressed Gas Cylinder Delivery?

Startup costs range from $200K to $600K depending on location, equipment, and scale.

Route

Compressed Gas Cylinder Delivery

Q: What are the profit margins for a Compressed Gas Cylinder Delivery?

The average profit margin for a Compressed Gas Cylinder Delivery is around 28%. At $900K revenue: bulk gas sourcing runs 35–40% of revenue, delivery labor adds 15%, cylinder maintenance and DOT compliance adds 5–8%, and vehicle/facility costs add 8–10%. Net margins of 25–32% are typical for independent distributors. Cylinder rental income (often 15–20% of total revenue) carries near-100% margins.

The oxygen tanks, argon, and CO2 that every welder and brewery needs

Compressed gas distributors deliver cylinders of industrial and specialty gases — oxygen, acetylene, argon, nitrogen, CO2, and helium — to welding shops, breweries, restaurants, dental offices, medical clinics, and laboratories on recurring fill schedules. The cylinders themselves are leased to customers, creating a steady rental income stream on top of product sales. Switching costs are extremely high: customers don't want to return borrowed cylinders or reset accounts.

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Avg Revenue

$900K

Profit Margin

28%

Acquisition Multiple

2.5x - 4.5x

Startup Cost

$200K - $600K

Difficulty

3/5

How It Works

The distributor maintains a cylinder inventory (owned assets worth $100–$500 each), fills them at a bulk gas supplier, and delivers on scheduled rounds to business accounts. Customers pay cylinder rental fees ($10–$30/month per cylinder) plus product fees per cubic foot of gas consumed. A delivery driver covers a route of 40–80 stops per day. The cylinder rental model means revenue continues even when a customer's gas usage drops — the cylinders just sit on their dock generating rent.

Revenue Range

Low End

$400K

Typical

$900K

High End

$2.0M

Pros

+Cylinder rental income provides a revenue floor independent of consumption — customers pay to hold your asset
+Industrial and medical clients sign annual or multi-year supply agreements with automatic renewal
+Switching suppliers requires returning cylinders and re-qualifying new ones — most clients never bother
+Diverse customer base (welders, breweries, medical, restaurants) provides recession resilience

Cons

-DOT hazardous materials regulations govern transport, storage, and cylinder testing — ongoing compliance cost
-Large national distributors (Airgas, Praxair/Linde, Air Products) compete aggressively on price for large accounts
-Cylinder inventory is a significant capital asset that must be tracked, inspected, and recertified every 5–10 years

Best For

Route-minded operators who want a capital-asset business with recurring rental income and sticky B2B accounts

Operating Costs

At $900K revenue: bulk gas sourcing runs 35–40% of revenue, delivery labor adds 15%, cylinder maintenance and DOT compliance adds 5–8%, and vehicle/facility costs add 8–10%. Net margins of 25–32% are typical for independent distributors. Cylinder rental income (often 15–20% of total revenue) carries near-100% margins.