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Fuel sur-charges

Discussion in 'Pesticide & Herbicide Application' started by tlg, May 27, 2008.

  1. tlg

    tlg LawnSite Senior Member
    Posts: 645

    A local landscape contractor called me today to ask about fuel sur-charges for his business. He wondered what we were doing about the rising cost and if we were adding an extra charge. My answer was no not really. We have about a 65 to 70 percent prepay on our lawn fertilizing accounts. I told him we won't try to collect a fuel charge on a prepaid account or on our bill at time of service accounts. I explained that the price we quoted in Feb of 2008 was good and we will continue to honor that price. I don't feel right about charging more for fuel if we did not tell our customers in advance that it could happen. Let's face it a customer that's pre-paid is all paid up for the season and trying to bill for fuel cost is in my opinion wrong. Who would ever think fuel would be where it's at today and increase so quickly. Not me. We are however, adjusting our pricing as needed for any new accounts this year. What do you think and are you adding any fuel charges? How much are you charging and do you have a formula to come up with an amount or percentage?
  2. cbtexas

    cbtexas LawnSite Member
    from texas
    Posts: 17

    I agree with you on honoring your prices you set back in Feb. for prepays. It does make you cringe that your cost has gone up some, but it is not the customers fault. Just adjust your prices for new accounts going forward. If you try to go back and collect on a prepaid customer it is going to leave a bad taste in their mouth. Just for grins, if the unthinkable happens and gas goes back down to 1.50, then you wouldn't go back and give your prepays money back. It works both ways. I am still wrestling with the idea of a fuel surcharge. I don't like to see them on my invoices. I see it as extra nickle an diming although it is understandable buy why should it be limited to fuel. If your mower craps out and you unexpectedly had to purchase a new one, would you add a new equipment surcharge. I would rather my vendors and myself hide my cost of doing business in my service charge and not look like I am adding extra fees because my cost of doing business is going up. You don't see fuel surcharges at the grocery store because it cost them more to get the product delivered. They just raise the prices. Am I the only one that feels this way?

  3. gorknoids

    gorknoids LawnSite Senior Member
    Posts: 316

    I addressed this in another thread, but I think it bears repeating. Every increase in your outlay needs to be taken into account if you intend to raise prices. Tagging on a $5.00 surcharge per visit still leaves the average operator in a loss situation if tires, belts, grease, filters, blades, bearings, beer and hooker charges increase at the same time.
    Gas prices will go down, (As will hookers!) but the parts won't. Does anyone expect to send out a refund if gas prices drop in the middle of the month?
    Gas prices are just the most talked-about indicator of our current economic issues. take a look at ALL of the things effecting your bottom line and adjust your prices accordingly. Otherwise you're screwing yourself, AND thinking you're making a killing. We're paying about the same real price for gasoline today as they were in 1922.

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