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How much does fuel have to rise before you pass along the cost?

Discussion in 'Business Fundamentals' started by Oshkosh, Feb 7, 2012.

  1. Oshkosh

    Oshkosh PlowSite.com Addict
    Messages: 1,655

    Here is a current issue, with fuel prices on the rise, experts are saying well over $4.00 per gal before spring, How high does fuel need to get before (if) passing the cost off to customers?
     
  2. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Since I'm seasonal for plowing I'm stuck with it. Lawn cutting season ,price goes up every year and I do have a fuel surcharge if it goes over a certain price.
     
  3. Khowie644

    Khowie644 Member
    from Maine
    Messages: 93

    Over 4$ by spring?
    I've been paying anywhere from 4.02$ to 4.23$ for the past 4 months.
     
  4. BSDeality

    BSDeality Senior Member
    Messages: 736

    we started putting a fuel surcharge on for customers. 2% with a $1 minimum, $2.50 maximum. we've been able to keep our fuel costs at a breathable level this way running our lawns and plowing running 3/4 and 1ton trucks. it's enough to cover the increased costs that we budgeted for when we quoted most of the jobs. if we ran bigger trucks we'd have different min/max's.

    we've had half a dozen question why, when I explain it that we're just trying to cover budgeted shortfalls all were ok with it, except one pain in the ass, who is now someone elses pain in the ass.
     
  5. Oshkosh

    Oshkosh PlowSite.com Addict
    Messages: 1,655

    I think the surcharge is the best way to go,fair for everyone...
    Ouch in Maine.....If its over $4 now I cant imagine how high it will go...
     
    Last edited: Feb 7, 2012
  6. JD Dave

    JD Dave PlowSite Fanatic
    Messages: 11,046

    I know fuel adds up but I find it's still a small % of my gross. Plus fuel surcharges seem to upset people and they also make billing more complicated. Lets say you burn 2 gallons/hour for easy figuring, fuel goes up $1/gallon, that's only $2/hour. I guess that's my take on it.
     
  7. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Since I do it as a separate charge ,I have the option to add it on or not. If I bump up my price even more and blame fuel cost and it goes down then they expect the price to go back down.
     
  8. Khowie644

    Khowie644 Member
    from Maine
    Messages: 93

    Did that 2 years ago and every single account I had said that exact thing to me.
    This year I just bumped prices a little from the get go to account for if it goes up more then 20 cents.