price hike

Discussion in 'General Industry Discussions' started by garth1967, Apr 29, 2006.

  1. garth1967

    garth1967 LawnSite Senior Member
    Posts: 640

    petrol here in aus hit $1.40 per litre.when i first started my business it was$.90 cents .i think its time to put prices up .have any of you guys needed to do it and how do you approach your customers about it
     
  2. stuffdeer

    stuffdeer LawnSite Bronze Member
    Posts: 1,557

    Well, According to my Caculations,

    We are at around .81 cents in here America.

    1 gallon = 3.7 Liters

    1 gallon of gas = 3.00 / 3.78(Liter in a gallon) = .81

    Hope that is right
     
  3. Evergreenpros

    Evergreenpros LawnSite Bronze Member
    Posts: 1,155

    Actually if he's talking AUS dollars they're only $.75 per 1 USD. So they're about $3.50USD per gallon of gas.

    $1.40 x 3.33 x 0.75 = $3.50USD or $4.66AUS per gallon.

    And I don't really believe in raising prices for a fluctuation in gas prices. It's kind of naive to believe $1.00 gas will ever return. We're stuck with $2 gas in the winter and $3-4 gas in the summer, same as the previous number of years.

    It costs about $1.80 per gallon for the crude to make gas and you only get 19 gallons of gas out of a barrel (42 usg) of oil. This doesn't count refining costs, transportation costs, taxes, retail markup, etc. As long as crude is above $50 a barrel we're stuck with $2+ gas. And remember tax is almost 50 cents a gallon in most states.
     
  4. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    Wow, that's really misleading. You make it sound like the only thing refineries get out of a 42 gallon barrel is 19 gallons of gas. The other 23 gallons are not lost in the process. There are many, many products that come out of that liquid carbon including oils of every type and description, fertilizer, plastics and thousands of other products.
     
  5. garth1967

    garth1967 LawnSite Senior Member
    Posts: 640

    Lads This Is Not Meant To Be An Argument About The Conversion And What Have You ,please Read The Other Half Of My Question
     
  6. Green-Pro

    Green-Pro LawnSite Bronze Member
    Posts: 1,420

    I budgeted for gasoline to go up to $4 per gallon this year. I then raised my prices accordingly prior to the season start. I don't like fuel surcharges and I'm sure my customers don't either. Personally I think its better business to plan for higher costs (even off the scale, so to speak) and then set price structure based upon that rather than spring surcharges and increases on customers during the season.
    JMO
    P.S. Every one of my suppliers frome the stone yards to the fert & pesticide folks never put a surcharge on last year. They did raise prices this year across the board for product and delivery, but I'd bet my first born there will be no surcharges again this year.
     
  7. garth1967

    garth1967 LawnSite Senior Member
    Posts: 640

    so you mean you look at cutting costs in other areas
     
  8. ArkansasLawns

    ArkansasLawns LawnSite Member
    Posts: 93

    I went up on the bottom half of my customers last year. The ones that I was charging less per cut. This year I went up on the ones that did not get the increase last year.

    I just told them straight up, face to face, that I was going to have to go up in price. This was back in early March. Most had no problem with the increase. They just smiled and said they expected it.

    I have one customer that I went up 25%, $10. Should of gone up last year. I have mowed for her 4 years and she even moved once with no increase. She went out and got the best lawn fertilizer service in town and now her grass grows like crazy. I never had to bag her back yard but now I need to bushhog it first and then bag(not really but it seems that way) to make it look good. Still have her yard.

    If you lose a customer over the increase you will find others to take their place. Especially if you do the quality work like I know you do. Referrals and word of mouth, keeps my phone ringing.
     
  9. garth1967

    garth1967 LawnSite Senior Member
    Posts: 640

    thanks mate good post
     
  10. The Kiwi Lawn Ranger

    The Kiwi Lawn Ranger LawnSite Member
    Posts: 34

    Garth , I am accross the ditch our gas is at $1.71 a litre. I have a little comfort padding but if the price goes to $2.00 per L which they are predicting i am sure going to have to raise the price .

    The Lawn Ranger
    Taupo New Zealand
     

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