Fuel surcharge

Discussion in 'Lawn Mowing' started by svlandscape, Mar 8, 2003.

  1. svlandscape

    svlandscape LawnSite Member
    Posts: 48

    Have any of you started to charge a fuel surcharge? Regular unleaded is currentely at about $2.05 a gallon here.

    I am really thinking about charging an additional $5.00 a month to each client for fuel.

    If you do charge it, what king of response have you recieved form your clients? Have you lost any over this?

    Thanks for your help.
  2. roscioli

    roscioli LawnSite Senior Member
    Posts: 749

    I don't know if you want my advice, as I have never charged it, but as a consumer a "fuel surcharge" is the LAST thing I want to see on a bill, I have called at least 3 companies to complain about these. I think it is absolutely the "BS"iest way to charge more. Just raise your prices and write a letter explaining "due to the increase in operating costs, I regret to inform that I must raise your price by $5/ month. Please note this increase only amounts to about $1.20/cut.. blah blah" but don't sneak it in as a "fuel surcharge" AND, don't commit suicide by saying "due to increased FUEL costs, blah blah" because then when gas prices go back down, everyone will call asking why the price didnt. You know?
  3. 65hoss

    65hoss LawnSite Fanatic
    Posts: 6,360

    I don't agree with the above post. Why? If you communicate it to the customer first then it isn't a problem. Many of my customers asked me last time fuel prices went up when I would charge a fuel surcharge. A surcharge doesn't seem permanant in their minds. A rate increase does.

    Either way, I think the key is communication with your customers.
  4. Premo Services

    Premo Services LawnSite Bronze Member
    Posts: 1,516

    I agree with hoss!!!
    I started raising 1/2 customers on one year, and the other half the next year.
    It is a fact, fuel, insurance, parts, mulch, well everything is going up. So I decided to use the surcharge for the 1/2 of customers that had raises last year. I sent letter with the propasal/agreement about how everything has went up, bla,bla,bla, and I would keep the price the same and absorb the fuel costs until it reached x.xx per gallon. Then I would be using a surcharge until it goes down. I had some customers call about the proposal, but not one mentioned the surcharge to me. With the raising price of fuel I needed a raise, but I have the customers up to a price where I am making pretty good per hour. I also believe that you could raise some of them and they would pay the increases to get the quality work, but I think if you keep raising some others, you will price yourself out of a job. The half that didn't get the raise last year, will get a weekly raise this season to help with the raising prices of everything..

    I think that communication with the customer is the best thing one can do to help a business out. If you communicate with them, then you are not sneaking something in on them.
    Again with some customers, you can price yourself out of work. Others will pay for the dependability and quality. You need to know what type of customers they are.
  5. svlandscape

    svlandscape LawnSite Member
    Posts: 48

    Thank you all for your replies, very helpful:) I think I will just do an "increase due to cost of doing business has gone up" letter to most of my clients who I believe will be willing to pay for the quality work that I provide. Even if I lose one or two, with the increase I will make just as much gross with less work per month!

    Thanks all!
  6. lawn4life

    lawn4life LawnSite Member
    from SD
    Posts: 9

    we charged a fuel surcharge of about 1 dollar per cut a couple of years ago. I did not have a single person complain. I was really surprised. At the end of the year I sent them letters stating what the price would be for next year and asked what services they would like. Nobody said a word.
  7. jaybird24

    jaybird24 LawnSite Senior Member
    from midwest
    Posts: 623

    SVlandscape- I don't understand your rationale with that last statement. If you indeed are charging this surplus to cover the cost of gas prices- how are you making more with fewer jobs? The idea is to recover your costs not make more profit- just as cost of living is often figured in on salaries and wages, it's not a promotion but rather allowing you to maintain at the same level you are accustomed to.
  8. John Allin

    John Allin LawnSite Bronze Member
    Posts: 1,489

    If you do a cost analysis of just how much your "cost" per customer visit has increased... it's peanuts.

    If you need the surcharge to make a profit - you are not charging enough to begin with - IMO.

    That being said.... if you can get it... do it.
  9. 65hoss

    65hoss LawnSite Fanatic
    Posts: 6,360

    Yes Sir I Agree!!

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