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Pricing by the inch.

Discussion in 'Bidding & Estimating' started by Joel B., Sep 29, 2005.

  1. Joel B.

    Joel B. Senior Member
    from MN
    Messages: 233

    A church wants a bid priced by the inch, 2"-4", 4"-8", 8"-12". Personally I have never price liked this before because I think it causes a lot of problems.

    First, where is the total amount taken from...........the airport, a weather station, the actual property??? If, for instance, the total is taken from the airport (30 miles away) and is 8" but only 3" fell at the property.........do you charge the customer for an 8" snowfall? Or vice-versa 3" at the airport and 8" at the property.

    Also, what if the property is drifted, do you charge at the lowest measurement, the highest, or somewhere in between? How in the heck do you determine the average snowfall on a 3 acre lot..........walk around with your ruler taking measurements all over ?

    What if I determine the snowfall at 5" but the customer insists it was only 4" and should have been charged at the lower rate?

    Is the 4"-8" rate double the 2"-4" rate? And.....the 8"-12" rate double the 4"-8" rate?

    I don't know, it just seems like a lot of headaches to me. Those of you who price by the inch, am I making this a whole lot more difficult than it really is?

    Thank you for any advice,

    Joel B.
  2. bigjeeping

    bigjeeping Senior Member
    Messages: 678

    I'm curious to see some professional and experienced responses here.... cuz I have no idea either :yow!:

    ADLAWNCUTTERS Senior Member
    Messages: 212

    tell them" NUTS" ask them what do they want to pay if you get 7 feet of snow ,like we did here in buffalo.it sounds like the church maintence man doesn't have a clue. tell them you still have labor,ins,fuel.truck payments that are fixed costs 2 inches or 7 inches . charge them a fixed monthly rate or hourly rate. try to sell them the monthly rate so you know that you have a fixed amount coming in and they can budget them selfs. if they give you a hard time run from them they will be a pain in the a$$.
    Last edited: Sep 30, 2005
  4. Mick

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

    Yes. What you are talking about is really a hybrid of "per push" and "per inch" pricing and is very common.

    As far as where to take the measurement, unless your accounts are spread over a wide area (more than a ten mile radius), take a measurement in a wide-open spot that's accessable to snowfall and use that for any place you push. When I open my garage door; I drive out and stick my tape measure on my driveway. That's what I use for every place I plow. I don't worry about drifting. I've never had it happen, but if somebody doesn't trust me, I don't want to plow for them anyway.

    The "4-5" dispute you're not going to encounter much anyway. If it's that close, I'll just go with the lesser range. Is it really worth pushing it if $25 or so that you'd get once or twice a year is worth losing $750 - $1000 that the account would bring in?

    Some people charge double the 2-4 rate for 4-8, then triple for 8-12 and some charge half again, then double. It's up to you.

    Pricing the way he's talking about is really not complicated at all. If you want, PM me with more detailed questions.
  5. snowbound

    snowbound Junior Member
    Messages: 4

    If I don't charge by the inch what other way to charge.
  6. Boutallnite

    Boutallnite Senior Member
    Messages: 197

    I go to a big parking lot that is pretty much in the middle of all the properties that I plow. I figure that would be the best way to do it, for me at least. I charge 2"-6", 7"-12" & 13"+. It seems to work, nobody complained yet and that is how I have been doing it for a few years. Also you can check out the newspaper or online for the official snowfall in your area, just to make sure you are not way off.
  7. Mick

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

    I've tried at least four times to quote Snowbound and it wouldn't take, so I'm going to just try to "reply" to him:

    There are three main strategies to pricing - Per Push, Per Inch and Seasonal. All those are based on the “fourth” stategy - Per Hour.

    Per Push - I will charge you $xx each time I clear the snow from a given area.

    Per Inch - I will charge you based on the total number of inches that gets cleared from a particular area.

    Per Season - I will charge you $xx for pushing any amount of snow that falls during a particular time period (ie: Nov 1st to Apr 1st).

    Hourly - I will charge you $xx per hour for the period of time I spend plowing snow from a particular area.

    The most common strategy is a combination of Per Push and Per Inch. In this you will have a “trigger” or depth at which you begin plowing. Say your customer wants a 3” trigger. He is saying he can drive on anything under 3”. So, you wake up and find 3.5” in your driveway. Do you plow? What if the customer disputes that there was over 3”? Now with this strategy, you will most likely structure price increments - ie” with a 3” trigger, you would charge, say

    $30 - for 3” to 6”
    $45 - over 6” to 9”
    $60 - over 9” to 12”

    To cover your behind and to account for those perhaps rare instances of more than 12” snowfall, you could do something like “over 12” - $60, plus $1 an inch over 12”.

    Per inch - This is generally only used for accounts requiring a very high degree is service, such as where absolutely no accumulation is tolerated and involve anti-icing by using chemicals to melt falling snow. An airport might be an example. Here, you would rely on a third-party weather service to determine snowfall.

    Seasonal - Here you indicate a price (say $1,000) to provide service for the season. With this, you will want to have a contract that is very specific and to what services, when they will commence and what will entail added charges. Example - you determine the average snowfall for your area to be 50” per season and with a 3” trigger, you expect to have seven “events” per year. What happens if it snows 80” one season and requires ten pushes? What if you get seven 2” snowfalls back-to-back? For a Seasonal account, the best strategy is have a three- (or more) year contract. This way, you take advantage of the “law of averages”.

    Hourly - You will charge so much per hour for each piece of equipment used and different amounts for different sized equipment. This may include plow, pusher, dump truck, sander, loader etc.

    How much to charge in each of the above situations is determined by local custom. It’s been tried here on Plow Site before and the variance between areas was pretty surprising.

    I mostly use a variation of the Per Push / Per Inch and offer a price for plowing anything up to 12”.

    I hope this helps a little.
  8. SnowGuy73

    SnowGuy73 PlowSite Fanatic
    Messages: 24,870

    Sounds like a real PITA to me...
  9. Big Dog D

    Big Dog D PlowSite.com Addict
    Messages: 1,134

    Ditto from me. We have used the by inch method for 15 years and never had a problem. Just be honest and they will recognize that and be comfortable,
    Last edited: Oct 1, 2005
  10. cet

    cet PlowSite Fanatic
    Messages: 7,257

    I have been reading about pricing here for a year now. I know that per inch would not work for me. I sent 12 trucks out to cover a very tight area. We start at 2am if it is still snowing. So at 2 there is 3", next place 4 1/4 inches next 5 1/2. Some places take 30 minutes some take 3 hours. There are 43 locations, how do you keep all this straight. Paper nightmare. Most of our stuff is contract for the year. 9 places are by the snowfall and per salt. Up to 6" one price over 6" double. If it snows over 8" everyone is getting a double plow and a cleanup for the next night.

    When you cut grass in May do you get more then in August. The grass is growing faster and you have to cut more which might take 10 minutes more but you get that back in the fall. Same for snow. Price for a 4 or 5" snowfall. You win on the 2" ones and they win on the 7" ones. In the end most of it is even.

    IMO way to much thought and work goes into this buy the inch thing if you have more then 3 triggers.
  11. Boutallnite

    Boutallnite Senior Member
    Messages: 197

    I don't think it is that difficult when you work in a small area. It might be moer difficult with more trucks and a larger area.
  12. Big Dog D

    Big Dog D PlowSite.com Addict
    Messages: 1,134

    We have a sheet that we had mad up tha the driver records the time in/out lot & weather conditions etc........ if you are not doing something like this anyway now you are doing yourself and your customers a great disservice. When somebody gets hurt and goes to sue you will have nothing to defend yourself with and you will make the job of the schmuck's lawyer that muck easier.

    We figure out what it will take to do a lot once at up to 4'', and then go 1.5 -2 +/- times higher(on the $, time) and then escalate from there (ie. the 5-9'' rate is the 4''$ plus enough time,$ to plow again1-1.5+/- times again) So if we can get it done in one shot we make out great if we have to plow a second time no problem or third time for the same 4'' storm we are getting close to the break even point but not loosing. The only time we ever really loose is when it takes 2.5 days for it to snow 6'' out of one stormfront and have to do several complete plows. But I'd rather loose for one storm than for an entire season. The only thing we do this on is plowing & shoveling,salt apps. are per app and on a long drawn out event we make the $ back that way instead. payup