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Season price for salting.

Discussion in 'Ice Management' started by EIB, Aug 31, 2003.

  1. EIB

    EIB Senior Member
    Messages: 258

    I have a senior living community that wants a season price on plowing and salting.

    Do any of you do season pricing for salt? I would like to get the contract, but I'd rather charge a per app. price for salt and seasonal for the plowing. I know that I would use between 400 and 500 pounds of salt per app.

    I did a search, but not a lot about season pricing for salt.
     
  2. wxmn6

    wxmn6 PlowSite.com Addict
    Messages: 1,037

    The reasons alot of us don't gives out seasonal price on salting is because this vary so greatly from year to year. Alot of Plowsite members commented that they salted anywhere from 20 to 50 applications in a season, sometime even more. Also you have to take in factor of possible rise in salt prices due to salt shortage in middle of winter. It would be too risky to do this type of service under seasonal contract, unless you are charging at the high ends for worst possible scenario.
     
  3. JD PLOWER

    JD PLOWER PlowSite.com Veteran
    Messages: 751

    We have and do price seasonal for salting, but with a limited number of applications. Once we go over that number then it's billed on a per app basis. Use a number that your comfortable with and be sure to include in your contracts something that makes it clear that should the wholesale price go up to xx amount of dollars or beyond then a new rate will apply.

    Last year the local supplier stopped selling to anyone other than a municipality with a contract. The prices shot up 60% for a short time. If you have the ability to store a large amount of salt then this could factor into your bid also since you'll be less affected by price changes.
     
    Last edited: Aug 31, 2003
  4. wyldman

    wyldman Member
    Messages: 3,265

    The only time I will go seasonal on salt is for small controlled applications.

    You could average the number of apps per year,and go on the high side,but I still think you would have a hard time.

    With seasonal plowing,we know approx how much snow we will get.With salt,you need to apply for snow,sleet,freezing rain,meltwater runoff,etc,etc.With so many variables,it going to be hard to figure what to charge.Difference in temperatures will also affect material usage.If it's really cold,you'll use triple the salt to get the job done.

    With the small apps your doing (4-500 lbs),you will probably be OK,as your not going to be out huge $$$ if your off.Try to have some sort of maximum limit if possible.
     
  5. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    Although I use a sand/salt mix mostly, this has caused some problem for me in submitting bids. The price per ton of mix will depend on the cost of salt to my supplier. He doesn't get his price until October when he buys it. I put out bids in Sept ( I'll be figuring pricing for established customers tomorrow). Last year I got caught short cause customers wanted bids for sanding with the plowing bid. So this year I bought several ton of salt at the end of the season and let it sit all summmer. Now, I'll have that to submit bids. If the price goes up, then I can pass raise prices to new customers. I don't lose much in interest from having a few hundred dollars tied up half the year, but I guard against drastic price increases.

    I have a couple of accounts that like to have seasonal sanding bids. Basically, I figure the bid on a full sanding with each plowing. I don't sand each plowing, but I'll have times that need sanding between plowing. This just lets me have a basis for figuring the bid. Since I'm not putting in the bid that I will sand with each plowing, I'm not cheating anybody.

    I think this makes points that wxmn6, JD Plower and Wyldman are making, especially that these are very controlled situations and are so-called high-end accounts (they are willing to pay for service).

    Last year I sanded three times between two snow storms. My method still worked.
     
    Last edited: Aug 31, 2003
  6. Lawn Lad

    Lawn Lad Senior Member
    Messages: 407

    Three things would be required for me to enter into a seasonal salt contract with the customer.

    1) Worked at least one season for the customer to understand expecations for de-icing applications.

    2) A three year contract - spread out the risk of a heavy or light winter for both you and the customer

    3) A specifically worded "Scope of Services" in the contract which specifies the approximate frequency of de-icing applications relative the number of expected plows.

    The last requirement will really determine your costs. If you plow an account on average 20 time per year and salt after each plowing, you'd have a 1:1 ratio. A salt to plow ratio of 1.5 would mean that you salt 30 times during the season assuming 20 plows. Depending on the level of service the customer expects, you could be looking at a salt to plow ratio of anywhere from 1.5 to 2.5. This must be narrowed down with specific language. In thinking about it, I would only enter into a seasonal salt contract with someone if I was decided how much salt was going to be applied, and I would figure that number at around 1.9 to 2.2 de-icing apps per plowing. That many de-icing apps would keep the customer from calling you saying that you weren't doing your job.
     
  7. EIB

    EIB Senior Member
    Messages: 258

    Thanks guys that gives me some things to think over. This is the first account that wants me to salt. One of my other accounts does their own salting when I'm done plowing. I would have to invest in a tailgate spreader. They also want their sidewalks done which I'm looking into a four wheeler w/ a plow.

    Lawn Lad, Do you give a percent off when signing multiple year contracts?
     
  8. Lawn Lad

    Lawn Lad Senior Member
    Messages: 407

    It can be accomplished in several ways. I'm not big on offering a "discount" because to me it implies that you've marked the service up enough to discount it. My pricing is not arbitrary, it's based off of cost plus profit.

    A three year seasonal contract is priced more attractively than a one year contract since I'm going to assume a higher risk on a one year seasonal contract. Why should I risk a heavy snow fall winter with only a one year commitment? Per push contracts essentially give a price guarantee for the three years. Take one year or three, I could care less. But next year I'm raising my prices.
     
  9. Chief Plow

    Chief Plow Senior Member
    Messages: 201

    I never give season price for salting. Salt prices vary so much in our area. Not to mention last year I had all I could do to find it by the end of the season.


    Rick
     
  10. I have some larger commercial properties that require seasonal salting along with the seasonal plowing bids. If your new to salting, or new to the property than it's risky. It can also get rough if you can't store enough for the season due to shortages and price increases. At first I was not too sure about doing it this way, as everyone likes to price per application and insists that they make alot of $. However, I price with the local rates and do the math just like plowing. Some years I come out way ahead, and others aren't so good but it all averages out in the end.

    Now I have a question. Everybody seems to push the multi-year contracts, and I completely agree with all the advantages. However, I always have the insurance issue hanging over my head. If locked into a multi year contract on large $ properties what happens when my insurance goes through the roof and I can't raise my rate to absorb it. Everyone talks about salt prices, fuel prices, etc but compared to insurance they aren't even an issue. How do you guys deal with that on multi year contracts?
     
  11. wyldman

    wyldman Member
    Messages: 3,265

    Most multi-year seasonal contracts do have some price increases included every year.It may be small,like 2-3%,but it's more than enough to cover the increases in operating costs and expenses.If it's a very profitable contract,then I may decide to not increase prices at all,but the extra profit again makes up for anything else.

    If there was ever an extreme increase in something that would make the contract non profitable,then I would have no choice but to approach the customer and add some sort of surcharge to cover the costs.It would have to be pretty extreme though.
     
  12. customers_snow

    customers_snow Member
    from 48843
    Messages: 38

    Weather patterns vary greatly by geographic region. You have to know your weather history well to offer seasonal quotes. However, it can be done. Log on to the National Climatological Data Center and check the weather history for your area. It will cost you a nominal fee to be armed with this very valuable information. The nice thing about quoting seasonal salting along with seasonal plowing is that you have that much more money guaranteed up front. Then you spend the entire winter finding ways to keep from spending it!!!!
     
  13. PPM Service Management

    PPM Service Management Junior Member
    Messages: 1

    If you go seasonal, you need to know your area well. We bid seasonal at 30 aps. In our area we are normally out 18-25 times max. So know your area, the needs in your area, and bid on the high side to be safe. Good luck.

    R
     
  14. Superior L & L

    Superior L & L PlowSite Veteran
    from MI
    Messages: 3,039

    I found this old thread. Interesting !!!

    I love seasonal contracts, Got to price right