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how do i add a fuel charge


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Old 01-19-2012, 06:43 AM
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Default how do i add a fuel charge

how do i add a fuel charge to my weekly and bi weekly grasscuting accounts there is word that gas might hit a all time high of $5 a gal this summer and i don't want to bid the cuts high and gas not go up so I'm going to put in my contract a fuel charge over x per gal so at the end of the month when i invoice i can add the charge but i need help as to how much thax
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Old 01-19-2012, 07:47 AM
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you will just have to set a base line of what would be considered normal pricing and then come up with a average of the gals used for each customer and hit them up the difference.

even though nothing in this day and age would suprise me anymore and it is not only believable as well as likely that fuel prices will increase i also found history has proven that during a election year the prices will stay within reason to what we are used to.
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Old 01-19-2012, 03:38 PM
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Quote:
and hit them up the difference.
Do you mean if prices go higher than you expected, to charge a fuel surcharge on invoices or what would you suggest?
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Old 01-19-2012, 04:47 PM
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Originally Posted by Steve View Post
Do you mean if prices go higher than you expected, to charge a fuel surcharge on invoices or what would you suggest?
the way i see it the only fair way if it is in fact a fuel charge would be to set your prices for your services around the baseline average of say $3.00 per gal and then calculate what you use on each property each time as well as what you guess on driving to the job.
i only include one way on the travel, it only includes the mileage getting to the job because the next customer pays for the trip from there to their house.

then if the average price of fuel for the month was $3.75 per gallon and you use 2 gals per week they would pay the $.75 per gallon extra per week.

it is the only fair way i can come up with because i don't think it would be fair to profit off of it when it is supposed to be a charge to offset the additional costs.
if you inform them and they see the prices went up at the pump and it only reflects a couple bucks a week on their service they won't care too much.

our nursery does that to profit, they charge a 10% fuel charge to your total order.
the problem is a fully loaded tractor trailer of new nursery stock will usually average $60,000 retail and 10% is $6,000 and any load coming in might have a extra $500.00 charge for them tops so where they get off tacking that kind of money on i'll never know, but it has cost them a lot of customers.

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Old 01-19-2012, 06:06 PM
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I am personally not a fan of fuel surcharges. We tried it once years ago, and we hated, so did our clients. I have since personally believe that you should just figure a higher fuel cost into your bidding.
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Old 01-19-2012, 09:01 PM
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Quote:
Originally Posted by TiedemanLLC View Post
I am personally not a fan of fuel surcharges. We tried it once years ago, and we hated, so did our clients. I have since personally believe that you should just figure a higher fuel cost into your bidding.
I agree, it's a good way to lose a customer over a few dollars.
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Old 01-19-2012, 11:00 PM
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You could in your spring mailings prepare customers for a fuel surcharge. If the price goes over $4/gallon add $1/week. $4.50 add $2 etc.
Or just add a percentage to their invoice and not say anything. I did this way 2 years ago and was yelled at by a customer...she said 5% was NOT enough.

I did not lose any customers over this, and we actually ended up raising rates for the first time the next season(last year)
Example: $30 per week lawns~~~$32.50


Hope that helps..
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Old 01-20-2012, 05:37 AM
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i do under stand where you all stand is hard with fual in 2010 it was $250 a gal in 2011 $350 a gal 2012 might be $550 a gal on a 32 gal tank i went from $80 -$112 in a year and might go to $176 and lets not forget my z takes 10Gal -$35 could be $55 thats $231 for truck and Z

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Old 01-20-2012, 08:02 AM
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Quote:
Originally Posted by TiedemanLLC View Post
I am personally not a fan of fuel surcharges. We tried it once years ago, and we hated, so did our clients. I have since personally believe that you should just figure a higher fuel cost into your bidding.
there is nothing wrong with it as long as it is fair and not being abused as another way to make a buck.
also, by having a baseline fuel price in your rate it allows you to keep your price more competitive and not risk pricing yourself out of a job as well as it leaves you a saftey net in the event the fuel gets out of hand.

i myself do not have a fuel surcharge and never charged one but i do have a provision in my contract for that if the price of fuel were to exceed a dollar per gallon or more from when the contract was written that the difference would be charged.

what if the price of fuel was low and there were no signs of fuel prices becoming unstable when you bid the job, how would you be able to "figure" that in? would'nt that be worse then a fuel surcharge?
just overcharge someone for something that may or may not happen.

like i said the purpose of it is to allow you to keep your prices fair to you clients but at the same time allow you to have a saftey net when the crap hits the fan.

everything everywhere goes up when fuel prices rise from soup to nuts what makes the landscaper any different.
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Old 01-20-2012, 11:31 AM
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Quote:
Originally Posted by dpld View Post
there is nothing wrong with it as long as it is fair and not being abused as another way to make a buck.
also, by having a baseline fuel price in your rate it allows you to keep your price more competitive and not risk pricing yourself out of a job as well as it leaves you a saftey net in the event the fuel gets out of hand.

i myself do not have a fuel surcharge and never charged one but i do have a provision in my contract for that if the price of fuel were to exceed a dollar per gallon or more from when the contract was written that the difference would be charged.

what if the price of fuel was low and there were no signs of fuel prices becoming unstable when you bid the job, how would you be able to "figure" that in? would'nt that be worse then a fuel surcharge?
just overcharge someone for something that may or may not happen.

like i said the purpose of it is to allow you to keep your prices fair to you clients but at the same time allow you to have a saftey net when the crap hits the fan.

everything everywhere goes up when fuel prices rise from soup to nuts what makes the landscaper any different.
Don't get me wrong, if you want to add in a fuel surcharge that is fine, but for me it's not. I have come up with some other problems with fuel charges, in which one of them you actually stated "what if the price of fuel was low"

1) What if you put a fuel surchage in your contract to go above a certain price. Would you lower your price then if a customer comes to you and says "hey, you have a fuel surcharge in your contract, but since fuel prices have been low lately, shouldn't you lower my price then?" The fair thing is to lower their price then because they have a valid argument. The argument is that if you are going to raise prices for higher fuel prices, then you need to lower their price with lower fuel prices.

2) What average are you going to use for the fuel surcharge? The national average, state average, local average? What happens if you fill up your gas in the morining and it's above the fuel surcharge price, but then in the afternoon the price lowers? How will you explain that to your client? What if the gas station you fill up is more expensive than the gas station across the road? There are way too many variables involved when trying to say when the fuel surcharge will take effect and how long it should be in effect for.

That's why it's easier just to built the price in your bids. When it comes around for contract renewal, if the gas prices are higher, then you know you need to raise the prices.
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