Regional pricing for fert program

Q1_Lawn1266

LawnSite Member
Location
N. Indiana
I'm new here, so this most likely has already been covered at some point. I worked for a company years ago, and we changed the pricing for the entire region for 50+ miles around. I was young and dumb at that point. We were told that we needed to beat any price given and we would hand out fliers with really good prices. Such as acre lots for $60 and $70 bucks. Granted this was still when $3 and $4 dollar bag Urea was still happening. We effected this market dramatically with 14K accounts at the time. We in the industry STILL feel this in this part of the area 25 years later. The prices are getting better but I feel they are still low.

My question is: What is your pricing say based on a 10k lawn per treatment? How about acre price?

I'd just like to get an idea of how badly the prices are still effected for this part of my region, purely out of curiosity.

Doug
 

SS Lawn Care

LawnSite Senior Member
Location
Broken Arrow, OK
Not sure about your region, but in the Tulsa area, minimum treatment prices are about $41. This is straight from the mouth of a few of the bigger companies in the area. $41 would be up to about 3000 to 3500 sq. ft. I also asked about acre prices, and we are sitting at $230-$240 per acre. Obviously solo operators can charge what they want, but to stay in business and grow a business, that's what the prices are looking like.
 

TPendagast

LawnSite Fanatic
Not sure about your region, but in the Tulsa area, minimum treatment prices are about $41. This is straight from the mouth of a few of the bigger companies in the area. $41 would be up to about 3000 to 3500 sq. ft. I also asked about acre prices, and we are sitting at $230-$240 per acre. Obviously solo operators can charge what they want, but to stay in business and grow a business, that's what the prices are looking like.
“Generally speaking” an acre will take 4-5 bags of fert , depending on product/rate.

Depending on how that product is applied (say ride on spreader) you can spread that material in an hour, figure in adding drive time and loading/unloading... and say you want $90an hour for the tech and machine.
1.3 x 90
That’s $117 in labor
Bagged material is going to be similarly priced all over the nation being that it comes from more or less a few of the same sources —- rural areas will pay more for shipping
But let’s say $18/bag for material

18 x 1.50 (50% markup up on material) x 4.5 bags gives you $121.59 in material

$117 plus $121.59 is $238.59 per acre

why so much mark up on the material
1) 20% mark up on any material is standard
2) bags get wet, they tear, you don’t ever get accurate count by employees - so you need to recover what’s known as inventory shrinkage - basically unaccounted for material due to theft, damage or other loss.

if you have really good inventory control, covered box trucks etc you can charge a little Jess and be more competitive
But years of accounting/job costing will tell you where you are at with inventory shrinkage.

an acre is 43,560 square feet if you take $238.59 and divide it to a per square foot price (238.59/43560) you get .0055

if you use that (5.5 cents per sq foot) for a small property like 5,000 square feet you will get $27.50 for a price.

Remember our material price of 121.59? that’s for an acre or .0028 per square ft.
For 5,000 sq ft
That’s $14
Leaving only $13.50 for labor
At $90 an hour ($1.50 per minute)
That leaves you only 9.33 minutes to drive to the property
Unload the equipment
Perform the work
And reload the equipment.

impossible
You will lose money
So if you figure a Minimum 20 minute stop at 1.50 per minute that gives you $30 for labor , $14 for material so your minimum stop (5 K sq ft or smaller) is $44.00

hope that helps
 

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