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The 3x rule for salt

Discussion in 'Bidding & Estimating' started by Shortandfat, Dec 29, 2010.

  1. Shortandfat

    Shortandfat Junior Member
    Messages: 10

    I know many people take their cost for salt and multiply it by 3 and get their rate for spreading it. That is what we have been doing(we used bagged salt), my question is do you charge differently for salt versus calcium.
    Ex: We buy salt at 6$ a bag and throw it down for 18$
    We buy calcium for 16$ a bag - now here is the question - do i spread it for (16 x 3) = 48 a bag or ( 16 + 12(the cost to spread normal salt). = 28
    It is no harder to spread calcium than it is salt and it just costs more to buy What are your opinions, is the 3x rule going to be ridiculous with the base cost of 16$ or it is what it is?

    Thanks
    Tim
     
  2. Wayne Volz

    Wayne Volz Senior Member
    Messages: 694

    sell based on the value of what you do

    We sell salt for .48 per pound and calcium for .63 per pound plus a truck, labor and spreader charge of $75 - $85 if not a plow-able event.

    That's how we do it.
     
  3. cretebaby

    cretebaby PlowSite Veteran
    Messages: 4,162

    Why so cheap on the Cal?
     
  4. procut

    procut Senior Member
    Messages: 902


    I must be missing something, that works out to like $960/ton. Plus the $75-$85 "spreading charge."
     
  5. dforbes

    dforbes Senior Member
    Messages: 247

    I think it actually is $1260 per ton. I charge $32 per 50lb bag for calcium + my spreading charge if it is not a plowable event. That is $1280 per ton. The two things to keep in mind are, calcium is much more expensive to purchase and it will take a lot less calcium to do the same job as regular salt. Customers who want this service realize the benifits and are willing to pay the price.
     
  6. bristolturf

    bristolturf Senior Member
    Messages: 435

    realistically you dont use any less calcium then you would if you used salt. When Its really cold out, we might put down around 1000lbs of straight salt on a 1 acre lot as oppose to 800. With calcium, its recommended rate is 2-4oz per 9 sqf. That equates to 605-1210lbs of calcium per acre. So if you went with the lower number I sell calcium at $.55/lb thats going to be $332.75 for that acre property where as a straight salt app would be $180-200 at most. I would rather just throw down a little extra salt and be done with it rather than stocking one more product and all that extra stuff. And it would be around 1100/t for me.

    At that rate, I would rather just buy a good ice melter as oppose to using cal and just spread that. There isnt a need ever for a complete cal application. Mix in 30% cal with your rock salt or even a 50-50 blend. It will melt it. The cal is just there to get the process started. Once it starts dissolving into a brine, the sodium will to and things will melt. You can still put out 800lbs on a 1 acre lot and get good melting. With a 30-70 mix I would charge on a 1 acre lot $245-250 for a app

    And personally I dont like the 3xs rule. I would rather figure out my costs and make my profit margin then just say ok well I am going to charge 12$ for a bag of rock salt since I paid 4$ for it. Example if it costs me $50/hr for a truck to run and I can spread 100lbs in 2 minutes that means my costs on it is $1.67 plus materials which would be $8 so $9.67 break that down to a per pound cost and its $.10/lb add in profit of 80-100% on materials and I get my .18-.20/lb applied. That comes out to 9-10/bag
     
    Last edited: Dec 30, 2010
  7. dforbes

    dforbes Senior Member
    Messages: 247

    bristolturf,

    I agree with most of what you say. Using your numbers in minimal conditions you apply 800lbs of salt as compared to 605lbs of calcium. To me that is a lot less material. I did not intend to imply that the cost would be similar using both mateials.

    Also I do not apply straight salt. I always use a blended ice melter. My route consist of 1 property that is open 24/7. They expect me to keep lanes open durring the storm for people to walk safely. Also there is a zero tolerance for this at shift changes twice a day. It must be wet pavement in these areas. I always carry enough calcium that if the storm hits at this time and I need to melt these areas quickly I can count on it getting the job done. There are other situations when I use it but not often.

    I also agree with not using the 3X rule for figuring prices. My price is based on cost, handling charges, storage fees, and profit
     
  8. dforbes

    dforbes Senior Member
    Messages: 247

    bristolturf,

    I agree with most of what you say. Using your numbers in minimal conditions you apply 800lbs of salt as compared to 605lbs of calcium. To me that is a lot less material. I did not intend to imply that the cost would be similar using both mateials.

    Also I do not apply straight salt. I always use a blended ice melter. My route consist of 1 property that is open 24/7. They expect me to keep lanes open durring the storm for people to walk safely. Also there is a zero tolerance for this at shift changes twice a day. It must be wet pavement in these areas. I always carry enough calcium that if the storm hits at this time and I need to melt these areas quickly I can count on it getting the job done. There are other situations when I use it but not often.

    I also agree with not using the 3X rule for figuring prices. My price is based on cost, handling charges, storage fees, and profit
     
  9. bristolturf

    bristolturf Senior Member
    Messages: 435

    I agree with you that is a good difference in material. Are you running bulk or just out of a tailgate spreader? For us, I can buy a pallet of it beginning of the year, and just cut it the rock salt as needed and it will work very good. Usually a 30-70 (Cal-Sod) mix and we get good melting at lower temps. A pallet is 2800lbs of cal and 1 bag can get mixed with 167lbs of rock salt to get a 30-70 mix so with that pallet i can make a total mix of 12000lbs of salt/cal mix. Thats enough to cover my sites at least.

    I dont believe I would use ice melters as my primary salt, maybe up around the buildings close like 2 good passes with the spreader past the walks. But most ice melters now like i said have a good mix or the 3 chlorides so they work till like -25 just like cal does and its right around the same price sometimes cheaper. On residentials i will use ice melt only but commercial the lots get rock and the walks get ice melt mix in cal with the rock on an as needed basis.
     
    Last edited: Dec 30, 2010
  10. dforbes

    dforbes Senior Member
    Messages: 247

    Contract states that we must use one of the blends. They give us several choices but straight salt is not on their list. We are running bagged material. The types of storms we get with the uncertanty of the storms really don't make bulk a good option. I don't think there is anyone close that sells bulk anyways. There would be many times with salt left in the spreader for days or weeks. I use 2 to 3 pallets of calcuim a season.
     
  11. Dr Who

    Dr Who Senior Member
    Messages: 637

    I can't belive that 65+/- miles to the west you get paid that, I get people freaking out trying to charge them 50 bucks for 100# of ice melt (20-22.00 my cost) applyed after I plowed!

    just another reason why I hate Lexington
     
  12. procut

    procut Senior Member
    Messages: 902

    Thats what I was getting at. Either I'm not understanding him, or he is FOS. $0.48 * 2000= $960 + the $75 'spreading charge' (Which I've never really heard of anyone charging) is grand total of $1035.00 per ton applied. The going rate around here is $125-$185 per ton applied. I know pricing is a regional thing, but I can't believe there would be that much differance between Michigan and Kentucky.
     
  13. bristolturf

    bristolturf Senior Member
    Messages: 435

    There is something the matter there. That equates to anyhere from .06-.09/lb applied, which is about almost what it costs for rock salt wholesale, no mark up or costs added. Which also means your probably buying cal then for about .02/lb or $2.50/bag. Send me about 12 pallets and ill just over winter them
     
  14. cretebaby

    cretebaby PlowSite Veteran
    Messages: 4,162

    I think Procut is talking about bulk pricing.

    You can't compare salting prices for jobs that take it by the ton to jobs that take a few bags.
     
  15. Wayne Volz

    Wayne Volz Senior Member
    Messages: 694

    Not FOS

    Back in the day, we did sell our salt and de-icing material for nearly nothing and thought we were doing okay. We had too many accounts and were not making what we knew we could by going after a different clientele. We decided to charge more for our services, service fewer accounts and give them exceptional service very fast. The methodology sounds crazy but the reality of it is that we can do much less work and make more money in less time. Yes we had to look harder for those accounts, but they are out there. There are many contractors in our market as well selling for much less. The nice thing is we only have to sell hours of work not days of work so we can be much more selective on the accounts we go after.

    We are not doing large facilities, but don't have to. We know we can't be competitive on those types of accounts so we changed our niche. It worked for us and it can work for you. It's the same business idea that not everyone goes to White Castle for a hamburger. Some people are willing to pay 3 or 4 times the price and go to Wendy's or McDonald's for a real hamburger.

    For anyone who doesn't believe it to be true, feel free to stop bye our office anytime you are in Louisville and I will be happy to show you our contracts. I am not going to defend our pricing on plowsite because I know what we do and how we get paid.

    If you don't believe your service is worth the cost, you certainly can't sell it that way either. I hope everyone has a great year.
     
  16. bristolturf

    bristolturf Senior Member
    Messages: 435

    I am talking about bulk pricing. Around here were getting .18-.20/lb applied BULK rock salt. Thats 360-400/ton applied. Also procut are you talking calcium or just regular rock salt? Ive never bought calcium in bulk so I dont know the pricing on it, just the pallet pricing. But still if its being applied at 185/ton thats insanely cheap, however;i know that pricing is regional. I just want to make sure were talking the same material.

    50$ is right about where we are on ice melt per 100lbs.

    Also I agree I would rather service less accounts, charge more and make more money while keeping my overhead down. The costs are just so greatly lower it isnt funny. Less labor, admin costs, less chance for breakdown, higher quality of services, etc.
     
  17. JD Dave

    JD Dave PlowSite Fanatic
    Messages: 11,045

    How many saltings and plowable events do you get on avg? What is your 10 year avg snowfall?
     
  18. Wayne Volz

    Wayne Volz Senior Member
    Messages: 694

    Seasonal averages

    Our seasonal snow average is about 16 - 20 inches. We are lucky enough to be in a transition zone and we have several events per year ( 3-5 ) of freezing rain events. We generally have about 2 - 4 plow-able events per year, and about 13 or so deicing events. To date this year we have had just a bit over 6".

    So obviously we are in a low snow market but we have learned through the years to make the most out of it. There are many many markets throughout the United States and Canada that see more snow but we have learned how to work our market efficiently. Any market regardless of snowfall averages or plow-able events have those that charge too little, too much and just right, Whatever that amount is who knows. All I know is that we know our cost per hour of operation, we know our niche, and we sell our service based on the value of our service.... not the cost. I have never on this site told anyone what to charge for anything. Everyone's overhead, expenses and use-rates are different, We could all do each other a favor and offer the same advice. Know your company's cost and charge accordingly.

    Some contractors in all markets regardless of snowfall averages get to work harder and longer and make less money. We got tired of doing it that way about 20 years ago.

    I hope all you guys have a great and profitable New Year.
     
  19. JD Dave

    JD Dave PlowSite Fanatic
    Messages: 11,045

    I'm glad your profitable, so am I. The reason why I asked how many events is that relates directly to the cost of the service. I've been to the Louisville Farm show in Feb and have seen how 1" of snow plays havoc on the city. You don't tell anyone pricing but you started throwing some big numbers around and that gets everyone pretty excited. I don't think your FOS just trying to grasp the thought of $1000/ton salt when I'm lucky to get $150.
     
  20. lawnproslawncar

    lawnproslawncar Senior Member
    Messages: 605

    If everyone knew their cost and calibrated their spreaders for current conditions then the price charged per ton wouldn't really matter. You then could charge per application and when its warm you'd profit even more because you could use less. Just a thought. Oh, you might want to know your operating costs too...but most who are smart know that.

    I'm not trying to be a smart donkey that knows everything and is telling you your all dumb. I stopped with the per ton charging this year and I have been making higher profits because of it. You can sell the fact that you're being environmentally friendly and the customer does not have to worry about over salting and being charged for 3 ton when the lot requires 2.5 ton (just an example). The best part is when its warmer you can guarantee wet pavement and maybe you only needed to use a ton? Sounds like higher profits to me?