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View Full Version : What percentage increase you doing with fert prices?


colawn
02-06-2008, 05:22 PM
As we all know fert prices are much higher on a year over year basis. I am starting to put together prices for 08 and was wondering how much you guys are going up this year. I talked with suppliers today and our prices are about 60-70% higher on a year over year basis. So what are you guys going to do. I know we can't eat it as this is too much but the client may not be willing to pay the 70% increase to keep margins. I will most likely go up more on fert only clients and a little less on the full service clients since we are already there so our margins are quite good already on those accounts.

ted putnam
02-06-2008, 06:05 PM
As we all know fert prices are much higher on a year over year basis. I am starting to put together prices for 08 and was wondering how much you guys are going up this year. I talked with suppliers today and our prices are about 60-70% higher on a year over year basis. So what are you guys going to do. I know we can't eat it as this is too much but the client may not be willing to pay the 70% increase to keep margins. I will most likely go up more on fert only clients and a little less on the full service clients since we are already there so our margins are quite good already on those accounts.

I went through this about a month ago. Just keep in mind that % in fertilizer price does not equal % increase in price. If you want to keep your profit margin about the same put a $ figure on what everything has increased and try to get your % increase in price to match that $ figure.

ant
02-06-2008, 06:33 PM
I increased 100 lawns that needed it this season 7% and so far 7 dropped me.

colawn
02-06-2008, 07:32 PM
I went through this about a month ago. Just keep in mind that % in fertilizer price does not equal % increase in price. If you want to keep your profit margin about the same put a $ figure on what everything has increased and try to get your % increase in price to match that $ figure.

that is very true I was just trying to get a feel for what others are doing as we have not had to deal with this kind of price increase really ever. I know fuel has gone up but when it comes down to it that is easy to pass along b/c the customer knows and sees that. Fert on the other hand is kinda indivisible to the customer

ted putnam
02-06-2008, 08:39 PM
that is very true I was just trying to get a feel for what others are doing as we have not had to deal with this kind of price increase really ever. I know fuel has gone up but when it comes down to it that is easy to pass along b/c the customer knows and sees that. Fert on the other hand is kinda indivisible to the customer

You are right...It is a tough call to make...I know most of the LCO's around here went up at least 7% and if I was a betting man I would say they probably went up better than 10%. My brother-in-law, a dentist by trade, had an interesting piece of advice for me last summer. He said "Ted, If they aren't bitching about the price, you aren't charging enough." I don't know that I would actually carry it that far but I do know I had a substantial raise in price and I've only lost 12 customers so far, and no bitching yet!

James Cormier
02-06-2008, 10:33 PM
As we all know fert prices are much higher on a year over year basis. I am starting to put together prices for 08 and was wondering how much you guys are going up this year. I talked with suppliers today and our prices are about 60-70% higher on a year over year basis. So what are you guys going to do. I know we can't eat it as this is too much but the client may not be willing to pay the 70% increase to keep margins. I will most likely go up more on fert only clients and a little less on the full service clients since we are already there so our margins are quite good already on those accounts.


I am not raising my prices on current customers. New sales have a different price structure then current customers so I will increase those prices.

Im in the mind set that you dont raise prices when things are bad and everyone else is raising prices. When things are good is when I raise prices, customers dont notice it as much. Back about 5 or 6 years ago I had a major price increase, but because times were good no one noticed.

So my current contract that just was mailed out a few weeks ago says " unlike many service companies in our area we are not raising our prices due to increase fuel and fertilizer costs" People are thanking me and signing up!

rcreech
02-06-2008, 10:43 PM
You are the first person that I have heard that has taken this route!

Hope it works for you!

I raised my current customers 6% and new customers (signing up from now on) 8%.

I send a letter that stated EVERYONE will be raising their prices due to the increased cost of fert and fuel.

So far so good! Have not lost one yet!

EA Quinn
02-07-2008, 11:05 AM
I went up between 17-18%.

Grassbuster
02-07-2008, 11:56 AM
I am not raising my prices on current customers. New sales have a different price structure then current customers so I will increase those prices.

Im in the mind set that you dont raise prices when things are bad and everyone else is raising prices. When things are good is when I raise prices, customers dont notice it as much. Back about 5 or 6 years ago I had a major price increase, but because times were good no one noticed.

So my current contract that just was mailed out a few weeks ago says " unlike many service companies in our area we are not raising our prices due to increase fuel and fertilizer costs" People are thanking me and signing up!

I like your approach...:usflag:

LIBERTYLANDSCAPING
02-07-2008, 01:55 PM
I am not raising my prices on current customers. New sales have a different price structure then current customers so I will increase those prices.

Im in the mind set that you dont raise prices when things are bad and everyone else is raising prices. When things are good is when I raise prices, customers dont notice it as much. Back about 5 or 6 years ago I had a major price increase, but because times were good no one noticed.

So my current contract that just was mailed out a few weeks ago says " unlike many service companies in our area we are not raising our prices due to increase fuel and fertilizer costs" People are thanking me and signing up!

I've seen where that can get out of hand, however. In some subdivisions where I have multiple properties next to each other & neighbors talk, they can get upset wondering why you are "screwing" them , if you price their's more than the neighbors, just because they are a newer customer.

I guess I figure if they complain & drop you over a legit price increse, then they weren't a very good cust, or you are doing that great of a job anyway;)