1. Missed the live Ask the Expert event?
    Not to worry. Check out the archived thread of the Q&A with Ken Hutcheson, President of U.S. Lawns, and the LawnSite community on the Franchising Forum.

    Dismiss Notice

The Rent vs. Sell Thread

Discussion in 'Christmas Trees & Seasonal' started by tdf, Sep 18, 2008.

  1. tdf

    tdf LawnSite Member
    Posts: 127

    I would like to hear in detail how you guys operate.

    They way I do it is I charge a first year price for a decorating service which includes the "tools" used to decorate. The second year I charge 2/3 of the first years price as a discount for repeat business. I state on my contract that all of the "tools" used to decorate the home are my property and I will replace defective materials before reinstallation. So I guess I really don't rent or sell them. My total price includes the initial cost of the lights, labor,cost to replace the lights, service during the season, takedown, storage,overhead/profit,etc. So I am covered each year for replacing the lights and going back to service problems during the season even if I don't have to do either.

    I don't mind (actually I am glad to) replace product and give people service when needed because I have already charged them for it. I don't argue or try to get out of it, I take care of them and they are very happy with my level of service.
    I sell a decorating service not lights. Does anyone else operate anywhere close to this? I am kinda new to this (3 years) so if I am not thinking about something that might bite me later please bring it up.


    Thanks TF
     
  2. hotrod1965

    hotrod1965 LawnSite Senior Member
    Posts: 581

    I do it just like you do, except I'm at 70% for the second year, and am thinking about going to 75% due to crazy fuel prices and increased product costs.

    I dont separate out the bill though. I have a strand of lights priced at "x" depending what it is, and that price has everything lumped into it.

    Personally, I think doing it this way gives the best customer service.
     
  3. DeepGreenLawn

    DeepGreenLawn LawnSite Silver Member
    Posts: 2,372

    That is the plan that I have found to sound the best and what I plan on doing myself... how have the first 3 years gone so far?

    Any advice for someone who is working on starting their first year?
     
  4. tdf

    tdf LawnSite Member
    Posts: 127

    I don't seperate the bill either. I say approximately 250 ft of icicle lights across the front roof lines x dollars. Clear mini lights in 6 shrubs in the front yard X dollars. Wreaths with bows on 6 windows across the front of house X dollars. Then I total it at the bottom. If I install mini lights in the shrub and the customer calls and says he thinks it needs more lights in the 4th shrub I go and put more lights and the 4th shrub. In other words, I don't count lights and say I put 8 thousands lights on those shrubs like the contracts says. I sell him the shrubs lit with mini lights. If he needs more,, I add more.


    TF
     
  5. hotrod1965

    hotrod1965 LawnSite Senior Member
    Posts: 581

    Well, I sell all high end LED, so I don't typically go giving things away.. But I do over estimate and then bill for actual lights installed. Can't say anyone has ever told us they need more lights!
     
  6. tdf

    tdf LawnSite Member
    Posts: 127

    Those LED lights are expensive. When we are talking mini light sets or extra cord it is no big deal to have left overs. I imagine with the cost of LEDs you watch thing a little closer. I am kicking around the idea of going LED but not sure yet. Do you find that you save alot not having as many ext cords, splitters, timers,etc.. that it evens out the extra cost of the LEDs?

    As far as the example before with the shrub, It was hypothetical. I was just making the point that I am charging to decorate the shrub however many lights it takes. I have figured out how many lights I think it will take, added extra just in case, used this to come up with my price, but all he knows is x dollars to light it up. I was just trying to say that it will be to his satisfaction. If he wants more or less lights on the shrub that is fine and it is the same price. I sold him a decorated shrub not x number of lights. I think the key to operating like this is charging enough up front. I haven't had anyone want more (or less for that matter) lights either but if I did I would be Johnny on the spot because I have already charged them for it ahead of time.
     
  7. tdf

    tdf LawnSite Member
    Posts: 127

    The first three have been ok. I have learned a lot. I have a lot to learn. I wish I could have hit this thing hard from the beginning, but I was doing other things. This industry is still in its infancy so we still have time to really get established before having a lot of competition from firemen, kids, illegals, etc.. At least in my area it is still new. I can't find anyone else offering it. I think you are doing good by coming to this forum. It sounds like hotrod and David have this thing down. The only advise I have is don't be afraid to charge alot. Make sure you have your sh*t together, and don't think you have to get every customer. This service is not for everyone. Lets keep it that way.
     
  8. hotrod1965

    hotrod1965 LawnSite Senior Member
    Posts: 581

    This is good advice. Being organized and professional makes people want to do business with you. You will find most people wont pay for this, but the few that will make it worth it.

     
  9. hotrod1965

    hotrod1965 LawnSite Senior Member
    Posts: 581

    You can hook more sets together, so you use less cords and less circuits. You can alos use lighter gage wire which saves money.

    But we charge more to make up the difference.


     
  10. David Gretzmier

    David Gretzmier LawnSite Gold Member
    Posts: 3,645

    I'm still a sell fan rather than rent, mainly because the first year cost is so high. when you figure the cost of everything, plus the fact your labor is typically double the first year, and the first year is where you really figure out what is going on with thier outlets, your costs are far higher the first year. Selling the product is the only way I can recover this cost, as the customer may not be back next year. we do retain about 90-95% of customers each year, but I do not want to get stuck with lights that are used and I have to resell.

    If you rent or "decrorate service" and you still own the lights, I cannot imagine looking a customer straight in the face and telling them it is more the first year. It is simply not fair to say they are renting but charge them more to "cover" the first year costs. If you want to rent, fine, but accept the risk that goes with it. You are taking a gamble that the customer will use you year after year, pay you more yearly for rental/install than what the yearly cost would be for a rehang price on a sell then rehang price.

    It would be like Blockbuster charging the first person that rents the DVD more than everyone else, to cover the cost of making the DVD. or a Rent a car place charging more for the first few folks who rent the car.

    if you rent, then RENT. If you sell, then SELL. but a hybrid system insults the intelligence of the customer. To ask them to hedge your bet on renting is unethical.
     

Share This Page