costs rising- are YOUR PRICES rising?

Discussion in 'Pesticide & Herbicide Application' started by hobbsd, Mar 16, 2008.

  1. hobbsd

    hobbsd LawnSite Senior Member
    from west wi
    Posts: 448

    With fertilizer and fuel prices going through the roof, prices for our service SHOULD be going up.

    What are people doing to their prices? I'm afraid to raise if my competitors don't. I don't want to lose my business because of competetion staying cheap...

    What are you doing?

    Are fuel surcharges an option?

    I think we could probably all benifit if there was a mutual rising of prices/.

    What are your thoughts?
     
  2. Ric

    Ric LawnSite Fanatic
    Posts: 11,957

    hobbsd

    Each Market area is different as each Businessman is also different. I am a semi retired operator and only work part time. Yes my margin is going down as are my competitors. At present time I am lucky enough to network with a Mower guy who is sending me enough business to make up the margin. I am now working more and making less per job, but the same bottom line. My competitors are not raising their prices and I am already higher priced. Given the Economy and the bad forecast that things are going to get worse before getting better. I am staying with my old prices and eating the lower margin. I am happy to have work at this point since many of my friends don't have steady work. BTW I feel in my market, the service industry will hold up because we are a retirement community. However I think the America economic hay day is over and I blame it on Globalization.

    Your market area I am sure is different. You must do what you feel is best. But Don't ask others to follow because each have their own cross to bare.
     
  3. boats47

    boats47 LawnSite Member
    Posts: 244

    For us we set our pricing for this year, so it is a little to late for our rollover customers. New ones on the other hand might see a fuel surcharge if things do not calm down. Now that there is talk of a depression (from wallstreet) upgrading for a recession, who the hell knows what is in store for us after all we are a luxury service.
     
  4. GreenN'Clean

    GreenN'Clean LawnSite Bronze Member
    Posts: 1,512

    Where are people going to get the money to pay for your increased prices after the rise of gas,food,mortgage,insurance etc. You'll be lucky if people will even pay to have any services done this year
     
  5. Runner

    Runner LawnSite Fanatic
    Posts: 13,494

    I have crunched and crunched We are leaning down in aLOT of ways this season. Different fert. formulations, more selective use of product(s), trimming on routing for efficiency, and a few operational tasks will be more down pat. Despite all this, I am STILL looking at about a 15% increase in the overall customer price. Some of this is increase in stop fee, the other is for fert. increase. that is all I can do. i can NOT make less per account than I did last year. Bread and milk have gone up.
     
  6. Ric

    Ric LawnSite Fanatic
    Posts: 11,957

    Runner

    I am still applying my high priced fert cocktail and don't want to slack up on quality. However I am Planning my route better as to not use as much diesel @ $ 4.00 a gallon. No more applying on special days because of irrigation regulation. I do estimates out of my personal truck @ 27 MPG and start new accounts only when their neighborhood is due. Everything is bought and paid for, so my overhead is low. As a one man band, I am hoping to survive these bad times.
     
  7. Mr.GreenJeans89

    Mr.GreenJeans89 LawnSite Member
    Posts: 59

    Thats the way im thinking.This is a luxury service,one of the 1st things that will be cut back in a depression.I have switched my supplier in fertilizer/pesticide and found a cheaper just as good product.These are things we have to do to keep prices close to our customers.I searched and searched for cheaper quality products.Im trying hard not to raise but im afraid of what the fuel prices are gonna be.
     
  8. muddstopper

    muddstopper LawnSite Silver Member
    Posts: 2,342

    I started raising my prices last year. I dont care if the guy down the street is cheaper than I am. I have already seen three competitors in my area sell their equipment and quit altogether. I also set minimums pricing, cant pay the minimum, get someone else. This year all bid packages I summit have provisions for adjusting prices according to the price of materials and fuel. Some jobs I bid havent even had construction started yet and could be several months out doing the actual work. No way am I going to give todays prices on tomorrows work. I can go broke watching television at home easier than sweating in the field.

    As for lowering overhead, you cant do that by using paidfor equipment as an excuse for keeping your prices down. That paid for equipment will need replaceing someday and if you dont charge for it now, you will pay for it later. The only thing you are really doing with the "paidfor/ low overhead excuse" is lowering your future income.
     
  9. ted putnam

    ted putnam LawnSite Platinum Member
    Posts: 4,541

    Have done the exact same things you have done. I started my Round 1 the last week of Jan. I have gone so far as to tweek my fertilizer rates and types on a weekly basis trying to provide what the lawns need while minimizing costs. It used to be that you could just add fertilzer to the tank and go through nearly the whole round... those days are over. I feel like I am having to pinch every last penny.
     
  10. Ric

    Ric LawnSite Fanatic
    Posts: 11,957

    yo

    Guys you can go straight nitrogen and iron like TG/CL. But it will catch up to you in the long run. I feel eating the lower margin and applying the good stuff will help me keep my reputation and the upscale customer who can still afford service.

    BTW I have picked customer this season because of poor service by others. I am now working more and making less per yard but the same bottom line. I am afraid to raise prices because I feel I am at the price limit.
     

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