PDA

View Full Version : 2011 pricing


jbturf
12-13-2010, 10:31 AM
hey guys, just seeing if anyones decided
too keep there current prices
or increase/decrease for next year?

my last increase was in 2009 at roughly 2-3%

looking ahead, its seems material costs are already on
the rise and will be at least for the start of the season
for most
this will perhaps be the biggest expense factor in my consideration,
but i think i have increased my price enough over the past few years
to still be comfortable with a minor increase in materials

suprisingly enough- i saw a 10% growth in gross sales this year
with no xtra help, and lower total expenses to boot

so i am leaning towards no increase for 2011,
opinions?

grassman177
12-13-2010, 10:49 AM
it really is depending on your unique situation, but we are not raising prices as we also raised them in 09 and since then prices of materials have gone down and have not reached the point to where they were then for us so profit is the same really.

that and we keep finding ways to save time or money on materials ingeneral to help keep prices down and more competitive.

rcreech
12-13-2010, 11:38 AM
If I do a price increase it will not be across the board.

Thinking about raising my smaller lawns (under 10 k) by 5%.

I am not going to raise my larger lawns at this time. If I did it would only be a couple %.

DA Quality Lawn & YS
12-13-2010, 11:40 AM
Keeping current customer's prices same as 2010, although I know I will take a small % hit by doing so with gas prices likely going up vs 2010 and inputs esp. fert going up.

However, I am in the growth stage big time and expect to nearly double my cust. base each year. New customers get 'current' pricing based on current market conditions. Old customers will get bumped up every 2-3 years or so in small increments.

grassman177
12-13-2010, 12:15 PM
i have found that many other companies are raising prices on at least fert apps.

it will be intersting on how many are going to risk increases in a down economy. this will very likely effect the bidding this winter and spring for sure. we are dedicated to making money, but also finding the ways to get the best prices we can to our clients.

i hope to make 2011 the biggest year we have ever had, but so much is a variable. so far we have been very lucky i think that we have grown every year and never stood still on growth or even lost. it is getting tougher though with so many newbies and young lco's pricing cheap.

hunter140
12-14-2010, 10:43 PM
i m not going to raise prices this year for existing customers however new ones will pay a little more because i did not raise prices last year due to the real bad economic conditions in our state. (2or3 highest unempyoyement rate in the country.) RI is hurting but Mass. is doing well.we are lucky to work in both states. we are also trying to grow alot this year.

RABBITMAN11
12-14-2010, 11:10 PM
I think you guys are crazy. How can you not raise prices if your costs go up? We will see a.big cost increase this year.
Posted via Mobile Device

jasontimm
12-14-2010, 11:20 PM
I think you guys are crazy. How can you not raise prices if your costs go up? We will see a.big cost increase this year.
Posted via Mobile Device

What costs are going way up for you, you already bought your fert for next year at or close to this years price.

americanlawn
12-14-2010, 11:20 PM
First off, I'd like to thank rcreech for his hand in enabling us to compare/shop around for the most competitive prices regarding cost of products.

We will NOT raise prices in 2011, yet I think our small lawns are "under-priced". Mainly due to the difficulty & the time it takes to treat these small lawns. All too often, we can treat a 15,000 sq ft lawn in the same time it takes to treat a 3000 sq ft lawn.

I think most of you know what I mean. My 2 cents.

turf hokie
12-15-2010, 08:54 AM
What costs are going way up for you, you already bought your fert for next year at or close to this years price.

Fuel, labor, insurance, rent, equipment, milk, bread, butter, hamburger, hotdogs, etc.

phasthound
12-15-2010, 08:59 AM
Fuel, labor, insurance, rent, equipment, milk, bread, butter, hamburger, hotdogs, etc.

Eat fewer hot dogs. :)

Seriously, one strategy that has worked for me is to raise prices only for low margin accounts.

ted putnam
12-15-2010, 09:36 AM
[QUOTE=phasthound;3824357]Eat fewer hot dogs. :)


Agreed!

I've also found that people appreciate not being "kicked" when they are down.

And I can tell you from looking at my A/R every day that people are down. JMO. If not careful, some customers who are very loyal can suddenly become "price" shoppers. I really hate when that happens.

jasontimm
12-15-2010, 09:48 AM
Fuel, labor, insurance, rent, equipment, milk, bread, butter, hamburger, hotdogs, etc.

All the above prices fluctuate year by year, i believe 2008 was highest fuel prices i can ever remember diesel around here was $4.80/gal gas was near or at $4.00/gal., i'm sure many raised rates then, so, when those prices go down, do you charge less the next year? I agree at some point you have to do an increase because of the cost of living increase, but you still have to be smart about it, and find ways to not raise prices during these hard times. Its a double edges sword.

Patriot Services
12-15-2010, 09:49 AM
I have always tried to keep increases to a minimum on my loyal long term customers. They are the ones that toss me the full service extras that pay well. New customers bear the brunt of any increases. I would rather lose a bid to a lowball than try to get an increase later.
Posted via Mobile Device

grassman177
12-15-2010, 09:58 AM
I have always tried to keep increases to a minimum on my loyal long term customers. They are the ones that toss me the full service extras that pay well. New customers bear the brunt of any increases. I would rather lose a bid to a lowball than try to get an increase later.
Posted via Mobile Device

i think this is an excellent strategy

ted putnam
12-15-2010, 10:10 AM
i think this is an excellent strategy

***I do too!***

Ric
12-15-2010, 10:49 AM
Because of the Economy I have not had a price increase since 2005. Even during the Price Spike of Fertilizer I ate the Margin loss and didn't raise prices or drop quality of Product. My margin is still good and I am not planning any increases. Fact is I feel Guilty that I make so much for so little work.

Bottom line is. A Commercial Pesticide license in Florida, is a License to Steal. I was talking with a Ag inspector just yesterday about that very subject. It was the inspector who made the point IF YOU KNOW WHAT YOU ARE DOING. His point was he investigates a number of cases where the company must pay to replace sod or plants. We both agreed that the smaller companies who pay attention to Education and staying current were making the great margins. The Theory here is pretty simple. You can spin your wheels with a few thousand accounts and a half a dozen idiot employees and starve to death as a TG/CL wannabe giving out a ton of misinformation. Or you can bare down and actually learn something and use that knowledge to give great service at a very nice profit with a much more laid back life style.

Main reason we have a favorable margin is the requirement to become Certified in Florida. In effect we have a closed or semi closed industry that every Yard Boy tries to illegal capitalize on. They are in fact stealing work from those who paid their dues, Learned the material, passed the test, and became licensed. IMHO stealing is the worst crime any one can do against their fellow man.

Tom Kline
12-15-2010, 11:08 AM
As a wholsale distributor here in Michigan, we are already getting material cost increases of at least 5% or more! One mfg. (lebenonTurf) has already informed us of one increase in effect this month of a addition $1.00/bag increase on blended material with another possible increase by 4-1-2011 !!! If you feel your 3-5% is enough consider the market and GM on your service, so you don't feel like your losing ground. Communication to your supplier is going to be very important.

Patriot Services
12-15-2010, 11:20 AM
Because of the Economy I have not had a price increase since 2005. Even during the Price Spike of Fertilizer I ate the Margin loss and didn't raise prices or drop quality of Product. My margin is still good and I am not planning any increases. Fact is I feel Guilty that I make so much for so little work.

Bottom line is. A Commercial Pesticide license in Florida, is a License to Steal. I was talking with a Ag inspector just yesterday about that very subject. It was the inspector who made the point IF YOU KNOW WHAT YOU ARE DOING. His point was he investigates a number of cases where the company must pay to replace sod or plants. We both agreed that the smaller companies who pay attention to Education and staying current were making the great margins. The Theory here is pretty simple. You can spin your wheels with a few thousand accounts and a half a dozen idiot employees and starve to death as a TG/CL wannabe giving out a ton of misinformation. Or you can bare down and actually learn something and use that knowledge to give great service at a very nice profit with a much more laid back life style.

Main reason we have a favorable margin is the requirement to become Certified in Florida. In effect we have a closed or semi closed industry that every Yard Boy tries to illegal capitalize on. They are in fact stealing work from those who paid their dues, Learned the material, passed the test, and became licensed. IMHO stealing is the worst crime any one can do against their fellow man.
Florida needs a super thorough all inclusive education program in this field. They regulate and monitor the other contractor fields and hammer the hacks. This field has has the fewest enforcers but the most potential to do harm. Go figure.
Posted via Mobile Device

rcreech
12-15-2010, 11:49 AM
All the above prices fluctuate year by year, i believe 2008 was highest fuel prices i can ever remember diesel around here was $4.80/gal gas was near or at $4.00/gal., i'm sure many raised rates then, so, when those prices go down, do you charge less the next year? I agree at some point you have to do an increase because of the cost of living increase, but you still have to be smart about it, and find ways to not raise prices during these hard times. Its a double edges sword.

Very well put and I agree!

I remember in 08 every company I dealt with was adding a fuel surcharge...and guess what, they still are today.

Every time I see it listed it totally pisses me off!

If gas goes up to $4 again will they increase the fuel surcharge? :hammerhead:

Ric
12-15-2010, 12:40 PM
Florida needs a super thorough all inclusive education program in this field. They regulate and monitor the other contractor fields and hammer the hacks. This field has has the fewest enforcers but the most potential to do harm. Go figure.
Posted via Mobile Device

Patriot

100% agreement

I had to get a College degree to qualify to sit for the hardest CPO test in the nation and be legal. Yet any Idiot can get away with illegal applications and our supplier like JDL encourage them to create more sales. Unlike being seen running a stop sign by a Policeman, the burden of proof is so great that Ag enforcement officers must also video tape the mixing and spraying of Pesticides etc to get a conviction. Yet when it comes to a CPO, they can fine you for smiling wrong.

jbturf
12-15-2010, 04:01 PM
thanks for all the input,
i will maintain current pricing thru 2011,
if anything -slight increase on new accts

i agree i do not want to pass any price increases on to
budget strapped customers right now--as it is, lawn care is
a luxury most people will cut 1st in a budget crunch

my 1st trailer load of product for next year will be the same price i
paid in 2010--i hear predictions imidicloprid products will be very aggressively
priced in 2011 due to stiffening competition--mop pricing volatile?

garydale
12-16-2010, 10:54 AM
We didn't raise prices in 2010.
Like most business today, we cut every possible expense to the bone.

For 2011, we looked at our records on each and every lawn and priced based on those records.

Taking in our experiences we each account, we raised some as high as double while not rasing the better clients.

My two cents.

Patriot Services
12-16-2010, 11:25 AM
We didn't raise prices in 2010.
Like most business today, we cut every possible expense to the bone.

For 2011, we looked at our records on each and every lawn and priced based on those records.

Taking in our experiences we each account, we raised some as high as double while not rasing the better clients.

My two cents.
I am curious of 2 things. Were these accounts priced too low initially or did customer demands go up? Secondly what verbage do you plan on using to explain a doubling in price?
Posted via Mobile Device

garydale
12-16-2010, 11:40 AM
Hi Patriot,
The answer is everything was the reason:
Complaints(unjustified)
Changes to Property
Added dog
Not taking our recommendations
Call aheads
Under priced

Prepays mailed 12/01/2010, about 20% returned todate.
A couple of cancels
A few have prepaid with no questions?

Labor being our biggest expense so, anything that increases time onsite is factored.

Patriot Services
12-16-2010, 12:53 PM
Hi Patriot,
The answer is everything was the reason:
Complaints(unjustified)
Changes to Property
Added dog
Not taking our recommendations
Call aheads
Under priced

Prepays mailed 12/01/2010, about 20% returned todate.
A couple of cancels
A few have prepaid with no questions?

Labor being our biggest expense so, anything that increases time onsite is factored.

Enviable sales skills.
Posted via Mobile Device

ted putnam
12-16-2010, 06:00 PM
Hi Patriot,
The answer is everything was the reason:
Complaints(unjustified)
Changes to Property
Added dog
Not taking our recommendations
Call aheads
Under priced

Prepays mailed 12/01/2010, about 20% returned todate.
A couple of cancels
A few have prepaid with no questions?

Labor being our biggest expense so, anything that increases time onsite is factored.

Wow, you sent your prepay letters out 12/1...and I was thinking about printing mine up and getting them out this weekend but thought I might be rushing it a little. I normally try to time mine to hit mailboxes Jan 1 but would like to get them out a little earlier so I could do a little hunting right after Christmas. I give mine until Jan 31 to receive the discount. How about you??? I think you just helped me make up my mind.:)

garydale
12-16-2010, 08:09 PM
Hi Ted,
We give decreasing prepay discounts. The important thing is being sure you price the work to allow for discounts.

I prefer to use the clients money as opposed to borrowing. Also can early order and get cash discounts.

In general seniors love discounts.

Our structure is:
Mailed on 12/01/2010
10% if paid by 12/31/2010
7% if paid by 01//31/2011
5% if paid by 02/28/2011
Senior can take a one time senior discount of $5.00 when they prepay.

About 60% choose to prepay.

In most years the ready cash runs out in August, just as aeration / seeding money starts begins

timturf
12-16-2010, 09:32 PM
First off, I'd like to thank rcreech for his hand in enabling us to compare/shop around for the most competitive prices regarding cost of products.

We will NOT raise prices in 2011, yet I think our small lawns are "under-priced". Mainly due to the difficulty & the time it takes to treat these small lawns. All too often, we can treat a 15,000 sq ft lawn in the same time it takes to treat a 3000 sq ft lawn.

I think most of you know what I mean. My 2 cents.

And for this reason, plus fix overhead, my pricing structure has a stop fee, same price for all clients, plus a set fee per 1000 ft treated.

I determine the price I want, stop and $/m, and that is the prepay price, as with installment payee's, I increase the stop fee by ~ 10% and additional
$ 5.00 fee/m

I do 4 app program, March, June, Aug, Oct, and programs run from 8/1 to 7/31, or 3/1 to 2/28

I get ~ 50% prepay

The higher price fert increase don't seem to eat into your profit margin. When figuring fert/pesticide cost, I get quotes based on <1 ton, and add 25%.

Just my input and thoughts.

Frank Fescue
12-17-2010, 07:06 PM
the prices are getting crazy i have 88 fert accounts and im up to 6 bags of fert per round how can i not raise prices? the lesco spreader i swiped from some guatamalan spreadeing ice melt in 2003 hasnt had an agitator pin or air in the tires for a couple years now and if i dont have the oppertunity to do that again this year i might have ti buy a new one.

rcreech
12-17-2010, 07:40 PM
the prices are getting crazy i have 88 fert accounts and im up to 6 bags of fert per round how can i not raise prices? the lesco spreader i swiped from some guatamalan spreadeing ice melt in 2003 hasnt had an agitator pin or air in the tires for a couple years now and if i dont have the oppertunity to do that again this year i might have ti buy a new one.

I seen you posted on this thread and I couldn't wait to read it!

You always put a smile on my face after reading your posts!

Thanks!

RC

teejet
01-08-2011, 10:34 PM
Me, to I like Frank Fescue. You can tell he knows his stuff, but never takes him self to seriously.