What will the big boys do?

Discussion in 'Pesticide & Herbicide Application' started by rcreech, Jan 7, 2008.

  1. rcreech

    rcreech Sponsor
    Male, from OHIO
    Posts: 6,072

    What do all of you think the big boys like TGCL and the others will do this year with the rise in fert costs?

    Other then a couple smaller guys like myself....TGCL, LL and S is about all I have in my neighborhood.

    Will they be like us and have to raise their prices accordingly?

    I have talked to a few people in the past and they claim they have had the same price from Chem Lawn for the last 10 years and never had a price increase.

    I gave a quote to one guy this year on a 3/4 acre lot and they were charging him $66.00. I told him to never quit them as my that was close to my cost (of coarse I accidently inflated it a little).

    Do you think that the big boys and the others buying in large quantities will have the same price increases as us? Just curious to hear what you have to say on this.

    For some reason...I am a nervous wreck going into this year!

    And if you don't mind....what % are you raising your prices this year? I was thinking about 2-3% but after the last couple months I am now thinking about 5%.
     
  2. group501

    group501 LawnSite Member
    Posts: 173

    Our cost for any product containing N has gone up about 13%. We have not raised our prices on current accounts and have had a slight decrease in price on new accounts.
     
  3. FdLLawnMan

    FdLLawnMan LawnSite Bronze Member
    Posts: 1,183

    Are you TGCL or are you an independent. I cannot imagine not raising prices for 10 years.
     
  4. lawnservice

    lawnservice LawnSite Senior Member
    Posts: 589

    I worked for Chemlawn 20+ years ago. Prices then were higher than our prices in recent years and product then was much cheaper.
    There was no competition back then.

    As for today.....I'm thinkin they will not have a price increase (if I were in their shoes I would not raise prices now)
    This is another opportunity they will have to own market share. If they market themselves as being the national leader, the nations largest, and hold prices down (they'll still turn a profit through volume) they will be able to pick up many accounts from the smaller businesses like yours and mine that must raise prices.

    We (as in my company) are depending on quality of work and quality of service and communication to maintain customers (although I am not a true believer in customer loyalty) AND we are confident that the largest companies will eventually lose the customers they gain with their 'business as usual' attitudes which is poor service, no communication and marginal results.

    Time will tell

    I for one try not to worry about tomorrow...since today has enough problems to deal with. (Matthew 6:34)
     
  5. Runner

    Runner LawnSite Fanatic
    Posts: 13,494

    It's quite simple...They will set their spreaders on "3" and it will be business as usual.
     
  6. greencravings

    greencravings LawnSite Member
    Posts: 10

    I gotta believe they will have a price increase sooner or later. How could they absorb a 10-13% increase on inventory costs. With there volume it could be hugh.

    It really doesnt matter though, their pricing is all over the place. They may have a rep quote the same property and it could be 10% higher or 10% lower depending on whose is quoting.

    "Lawnservice" is right, the only thing that makes us little guys different than the big guys, is our committment to quality service and quality products (and I'll give you another one we market called "responsiveness"). We are local (we know the growing conditions) and can respond within 48 hours.
     
  7. sclawndr

    sclawndr LawnSite Senior Member
    Posts: 326

    Huh? If you don't raise your price when material costs soar, when would you? Why should you absorb the increase instead of your customers? I don't know about you but I work too hard and provide too good a service to take a pay cut.
     
  8. Rayholio

    Rayholio LawnSite Bronze Member
    Posts: 1,461


    they'll still turn a profit? last I heard, they havn't turned a profit in a long time..


    but they do still pick up a lot of customers.. and most of those customers are price sensative customers.... truthfully, I don't want price sensative customers.. TGCL can have 'em.. I provide better service, instead of better prices.

    And no.. I've never heard of TGCL raising prices... BUT things might change now that they're under new ownership.. hmmmm
     
  9. ted putnam

    ted putnam LawnSite Platinum Member
    Posts: 4,541

    Rodney, I just got back from doing those estimates for the price shoppers. One of them home. I did some squeezing for info and got a not so solid answer.My main competitor was doing the lawn. He has about 3000 customers.The guy said they went up more than 10% but less than 20%.I went up 15% and am now fairly confident in my decision. I've only lost 6 customers,gotten several prepays and gotten 3 inquiries on Fire Ant Control. It and Tree/shrub are 2 add-ons that I included info on in my prepay letter. There will always be the TGCL's of this world. They can only lose money and do a lousy job for so long.They demonstrate it every year in this market.(by the number of customers they lose to others). You can only be cheap for so long before something gives. It usually takes about 3 months here:laugh: You just need to put a pencil to some figures for yourself. The rest will take care of itself.
     
  10. rcreech

    rcreech Sponsor
    Male, from OHIO
    Posts: 6,072

    I am confused here a little!

    Your N cost have gone up 13% but you have decreased the price on new accounts?

    I can MAYBE see why you don't increase you prices on current accounts, but why not capitalize on the new accounts and try to recover some of your cost increase?
     

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