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How do you price bulk?

Discussion in 'Ice Management' started by plowfever, Jan 23, 2013.

  1. plowfever

    plowfever Senior Member
    Messages: 234

    I'm going to finally make the switch over to bulk this year or maybe next. I have been doing this since 99 and have always just used bags with tailgate spreaders. I run on average about 25-35 pallets of salt per year so that is a average of 30-40 tons of salt. I figure I am loosing out on so much profit that I could be making. I do large factories where it isn't uncommon for me to spread 2-3,000 lbs per app. So it would not only make me more money of product but save me time. My only question is I price per lbs now and know that will be out of the question running bulk. So how do you guys price a salt app. Sometimes I use more than other times so I couldn't just charge a flat rate. I know about how much I use per property but like I said it varies depending on conditions as you guys know.
  2. djlunchbox

    djlunchbox Member
    Messages: 50

    I think that most price by the ton, or per app. If you know about how much you apply per app then you are already ahead of the game. I just did a time /material study last week using 10lb bags and a walk behind spreader on 2 lots. I used MUCH less salt than when we ran bulk in our v-box, and now I know within 10 lbs how much I should spread. We are stupid and just charge a flat rate for the season for salt and sand, which will soon bite us in the a$$. good thing winter is almost over.
  3. chachi1984

    chachi1984 Senior Member
    Messages: 416

    for the price of bags vs bulk your salter will pay for itself
    i think roughly 1 tonne will do about 2-2.5 acrs.
    the easy was is to just charge for full ton or half a ton. if you use a little less not like they will know what a half or full ton looks like

    also from my experience dont leave salt in the spreader for more than a week if you dont half too. even if you ahve it covered it will still harden up and cause you problems
    Last edited: Jan 23, 2013
  4. cdqat1432

    cdqat1432 Member
    Messages: 60

    If salting the whole lot, I charge the same as the plow price. If just lanes and aisleways, then 60% of plow price. The profit is very good.
  5. ducaticorse

    ducaticorse PlowSite.com Addict
    from we
    Messages: 1,426

    You do up to 3000lbs per app out of a TG spreader and you've been doing it this way since 99? You must look like a pro body builder from loading all that bagged salt into your spreader.
  6. White Gardens

    White Gardens 2000 Club Member
    Messages: 2,665

    We have a mixed bag of accounts, so some accounts we charge per amount used, and others a flat rate.

    As for the flat rate, we figure the high end of the spectrum for the application. Then at that point we knock it down 20%-25% from the high end charge and that's our flat rate. Some customers just want a flat rate and that's the best we could come up with for pricing.

    80% of the time you'll be at half to less of the upper end rate.

    We also will plow almost everything first and not try to burn off lots that have an 1" of snow on them, unless it's conducive.

  7. plowfever

    plowfever Senior Member
    Messages: 234

    Yes it gives you a work out when you are salting that is for sure. I look back and I used to salt a lot more than I do now and wonder why in the heck I never invested in a vbox. It does make it a little more manageable now because two of the trucks have spreaders but it is a lot to do with a tailgate spreader. I have a mixed bag of accounts as well. From large factories to small commercial properties and everything in between. Some places only take 100-150# to salt and then others you can apply 2,500-3,000 lbs so that was my main concern is how to charge and not shoot myself in the foot if I over apply. The good thing is I charge a good amount for salt now so I should be making a boat load when I make the switch.
  8. ryde307

    ryde307 PlowSite Veteran
    Messages: 3,145

    If your making money now then with switching to bulk you should be good with estimating your quantiies used on average converting to a per time rate. Bulk should be around 50% less for the product alone not to mention the huge time savings.
  9. plowfever

    plowfever Senior Member
    Messages: 234

    That is what I am thinking. I am tripling my money now on salt. I'm getting $0.45 a lbs all day long. I used to be at $0.35 and was making money but now I'm doing very well. I did start using a little better product than just plan sodium I'm using a cal sodium mix so no matter the temp it will work fast at the same app rate.
  10. Spool it up

    Spool it up Senior Member
    Messages: 912

    400% profit
  11. White Gardens

    White Gardens 2000 Club Member
    Messages: 2,665

    Man, that's like 900bucks a ton. I couldn't even contemplate that.

    Go with strait sodium and pre-wetting mix with calcium in it and you would be banking.

  12. IMAGE

    IMAGE Sponsor
    Messages: 1,747

    If they are used to paying .45 per pound there is no need to lower your price just because you find a way to do it better. Why invest in vbox if its just to give the customer a discount?
  13. Spool it up

    Spool it up Senior Member
    Messages: 912

    .5 cents @ lb. for bulk at 100.00 a ton . that s your profit margin being raised
    Last edited: Jan 25, 2013
  14. coldcoffee

    coldcoffee Senior Member
    Messages: 776

    In terms of efficiency, I think every rookie should start out w/ applying bagged material. It teaches you how to utilize your material MUCH more efficiently, as opposed to just running a bulk spreader. You learn to be more resourceful & you make a much more controlled, decision based strategy on how & where you put material. I have former associates who will put a new guy in a big truck & I know damn well they could cut their material usage to at least half.

    I used to take a lot of slack after converting some of my accounts from bag & tonnage rates to flat application rates...but if they only knew what that equates to in the end, their jaw would drop.
  15. IMAGE

    IMAGE Sponsor
    Messages: 1,747

    Correct, and the increase in profit margin should stay with the contractor. No need to give the customer a discount just because your profit margin went up. My customers are paying .x0 lb for straight bagged salt, or .xx lb for a 50/50 salt/calcium mix, using bags in my tailgate spreader. I have a 5 yard truck almost finished, and when I start using that I will actually raise my price a couple cents a lb because I'll only be using treated bulk. Even though the treated bulk is 1/3 the price as the bagged straight, the charged price will still be higher to the customer because it's a better product. I do have a scale system on the truck so I can still charge by the pound also. I'm also setting up to make every lb applied count, using ground and air temp sensors, a scale accurate to the lb, prewetting at the spinner, etc. So i'm not going in overapplying, I'm going in using the least product possible to get the desired results.

    The benefits of switching to bulk are lots of saved time, and cheaper product. The increased margin is mine, and i'm not going to give them a discount because I invested in better equipment/processes.
    Last edited: Jan 25, 2013
  16. bytheyardlandsc

    bytheyardlandsc Member
    from ohio
    Messages: 68

    I agree with image. there use to paying the bill, they don't need to know what you paid for it. I charge a flat rate. sometimes I use more sometimes less, all works out in the end.
  17. PR Fect

    PR Fect Member
    Messages: 53

    I agree with IMAGE also. Stay with your price per pound. Its not that hard to estimate. Just fill your new bulk sander with salt and go somewhere and weight it. Run half out weigh it again, and weight the truck empty. Salt does carry a little more weight when its wet, but just take an average. Guess how much you used at each job. Add your totals at the end of a day of salting. After a wile you will be surprised how accurate you can be with bulk just buy looking in the hopper after each job, and never weighing salt again.I did it that way for years and my boss at the time said my eye was just as good as a scale.
  18. White Gardens

    White Gardens 2000 Club Member
    Messages: 2,665

    Ya, if you've got your pricing set for bagged salt, then stick with it and make some money.

    Competitively though, in the future you bid out per ton applied on lots, our area generally goes for 100 above retail.

    Don't be surprised though if you loose bids though with this method. I know some companies charging 50 bucks above retail per ton to apply. :dizzy:

  19. ducaticorse

    ducaticorse PlowSite.com Addict
    from we
    Messages: 1,426

    I don't agree with the opinions of not giving your customer a break if you SIGNIFICANTLY reduce your overhead as you will be doing by switching to bulk.

    At the increased profit margin you will be reaching, it will enable you to say to your customer, "look, I've found a new product at a great price that will allow me to cut expenses down a little, and I want to pass some of that savings on to you" while still making much more money than you were with bagged salt.

    I have done this in the past, and it have never had a negative result. It instills confidence in your clients that you are in fact looking out for them and not just concerned about making a buck. It also somewhat insulates you against another contractor who has been using bulk salt for years from blowing your pricing out the door and taking your contracts. Your clients will trust you more and be less reluctant to switch contractors even if your prices are a little higher.

    Take this as an opportunity to solidify your relationship with your clients in a positive manner. It will pat dividends to you in the long run.
  20. White Gardens

    White Gardens 2000 Club Member
    Messages: 2,665

    Really good point.

    All it takes is some under-cutter to come in and point out to the clients that they aren't saving as much money as they could.