View Full Version : Guarantee mark-up

John Deere
03-18-2001, 10:58 AM
My guarantee 5 years ago use to be 40% above the cost of my plant.

Example: Colorado Blue Spruce - My cost $99.00
40% added for the guarantee (just the guarantee) would be $138.00. I am going to raise this price this year considerably, so what's the going rate?

03-18-2001, 11:11 AM
A lot of that depends on how much landscaping you do, and how much material you buy, I figure we lose just under 5% of the plants we install. We then use this as a business cost (this is based on dollars not each plant). Shrubs we almost never lose, certain ornamentals we lose more than others, trees have a lower loss rate than evergreens.
This is experance rate, so evergreens get marked up higher than than trees and shrubs. Of course time of year on the plantings makes a big differance too, spring or fall and or losses are less, midsummer and they are higher. With these factors we price evergreens higher (now 2.5 times markup) so your spruce would cost installed 247.50 but we would just round it up to 250.00.

John Deere
03-18-2001, 11:41 AM
Thanks for the response Paul. One thing I see with that is you say $250 installed. Now you are figuring your cost of labor in that as well if I'm correct. How much of your mark up there is labor and how much is your guarantee?

03-18-2001, 12:11 PM
On a typical planting job for us it takes about 15 minutes for planting a plant this size, I have install times for all types of plants and equipment that we use, one thing you have to remember is we are working on clean slate jobs, not installations where we worry about ripping up sod or other plants that might be in the way.

That 15 minutes is for digging the hole by machine, moving the plant to the hole and finishing with mulch. Most jobs we do plant material is delivered to the job by semi load. My guys make too much money per hr to do it any other way.

Broken down labor for installation is $23.00
cost of plant $99.00
loss factor $ 5.00
overhead $17

John Deere
03-18-2001, 01:19 PM
I'm sorry that I'm not with the program on this, but now you have me confused. In your earlier post you quoted a price of $250 to install that tree w/ guarantee. Then in your breakdown it only comes to $144? Where am I wrong or what am I not understanding? Thanks for your help on this.

03-18-2001, 01:36 PM

What I've listed is my costs not profit, or things like future equipment funds, officer salaries, bonuses, company taxes, leasing..... all these things make up other parts of the company, but losses (plant material dieing) are figured in to the cost of the job that 5%, your not going to water that plant every time it needs it are you? that guarantee is a cost to replace it IF it dies!! not to maintain it.