Early order programs at Lesco... worth it or not?

Discussion in 'Pesticide & Herbicide Application' started by RCA, Dec 19, 2007.

  1. RCA

    RCA LawnSite Member
    Posts: 26

    I tried early order from Lesco for the first time last year. Ordered about $5000 worth of product December 06 and took delivery January 07 and got a 3% discount... that figures out to be about $150. Also got delayed terms until May, or something like that. I didn't really see an advantage after all was said and done, plus I had to store the product at my facility.
    I think this year I was told I'd get a $200 John Deere gift card and delayed terms for ordering early.
    Not sure if that's really enough incentive to commit to all that product. What do y'all think?
  2. ted putnam

    ted putnam LawnSite Platinum Member
    Posts: 4,539

    Myself and another guy did some figuring on that and we figured if you ordered enough and had to store it. If it cost enough and you were worried about it enough insuring it would eat up that 3%. The only advantage I see to it is paying today's market price vs. prices 3-4 months from now. I did the early order thing one year and well, I'll put it to you this way. If you make your payment at the times specified you're ok . If you let it slide a little(not talking about being late on your payments) just letting that balance go. You end up dealing with GE Capital and their 23% interest rate. Ever since, I've paid for my materials outright as I've needed them. I have much more peace of mind knowing it's paid for and I don't owe anyone for materials going into Winter and Christmas. However, I can see where it could be much more advantageous for a large company. My way works better for me.
  3. rcreech

    rcreech Sponsor
    Male, from OHIO
    Posts: 6,057

    I totally agree with Ted!

    If you have to borrow money at 7% and only get a 3% discount then it isn't that good of a deal at all.

    If you have the money in the bank and can get a 3% discount it is a good deal.

    This year I didn't get any discount, but I did get a BIG credit from JDL which is cool but can't use it until next year.

    Where you could save big this year (as mentioned already by Ted) was beating the increase. With the increases that have already taken place...I have saved over $11,000 on all the product I have in my barn!
    I now wish I would have bought a lot more and I could have sold it to the local guys and made really good money without even spreading it!

    That is more important then and "discount" you will ever get!

    If one doesn't have most or all of their fert bought I think it is going to be a lot of sleepless nights come spring not only due to price but availablity!

    BTW....this is also the first time I have ever had to get insurance on my fertilizer. Got to thinking...could you imagine losing that amount of fert then trying to replace it! That is an automatic OUT OF BUSINESS TICKET!
  4. rcreech

    rcreech Sponsor
    Male, from OHIO
    Posts: 6,057

    Forgot to add in my last post (just incase you guys thought I was rich or something) that I did borrow all my money at 7.45%. So I will have some interest cost after my 90 days free at Lesco. But should only have to borrow the money for about 5 months! Still VERY FAR ahead though on saving $$$$$!
  5. MStine315

    MStine315 LawnSite Senior Member
    Posts: 789

    I have done the Lesco early order thing in the past when I was smaller, and it worked out well. The downfall for me now, as was mentioned, is you have to take it all at once. For many, that equates to round 1, and maybe part of round 2. What I have found by dealing with other vendors, is that you can "book" your order for the next year and essentially lock in your price. You tell them when you'll accept delivery and they'll give you payment terms. I did this in the fall and locked in '07 prices for '08 without anything in my building. I have shipments staggered throughout the '08 season from March through Sept.
  6. rcreech

    rcreech Sponsor
    Male, from OHIO
    Posts: 6,057

    Are they going to do that this year? Most of what I have heard was "all deals are off" since the market has gone so crazy. Are you still dealing with Lesco at all?

    Lesco told me that I couldn't lock in any prices and that I had to take within the same month of ordering (which was around the middle of Nov)!

    But...I am really glad it is in my posession.

    I am not big by any means...but I have about 3.5 loads in my barn!
  7. FdLLawnMan

    FdLLawnMan LawnSite Bronze Member
    Posts: 1,182


    I received quotes from three suppliers and none of them would guarantee the price unless I received the shipment this year. I did the same thing Rodney did. I received my fertilizer today. I should have enough money to pay it off in 90 days or I will take a short term loan for a couple of months. I felt I needed to do this so I know what to charge for next year as I will be sending out my renewal forms in early February.

    Mike I
    Mike's Total Lawn Care
  8. rcreech

    rcreech Sponsor
    Male, from OHIO
    Posts: 6,057

    Hey Mike,

    Not sure what volume you are looking at...but do you have insurance on your inventory? Not something we usually have to think about, but it is cheap if you haven't done it yet! I have never had a barn burn down yet...but if it was ever going to happen, it would be when it is full of fert (aka gold).:laugh:

    Also you don't want to just get insurance on the fert... as you want to make sure the policy is for REPLACEMENT VALUE. Costs a little extra, but have to do it to cover the spread in what the new cost would be to replace it!

    Yes I do think too much!!!!
  9. FdLLawnMan

    FdLLawnMan LawnSite Bronze Member
    Posts: 1,182


    Thanks for the info. I will call my insurance man. I rent the pole building and I will also talk to the owner.

    Mike I
  10. Marcos

    Marcos LawnSite Gold Member
    Posts: 3,720

    You guys talk about insurance for your fertilizer in your barns!

    You ought to hear the outrageous stories that the truck driver contracted from Morral tells me about the security measures that have to be taken at the liquid fertilizer plant; to stave off all the FREAKS trying to steal raw ingredients for their METH LABS!

    :dizzy: :dizzy: :dizzy: :dizzy: :dizzy: :dizzy: :dizzy: :dizzy: :dizzy:

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