Fuel Expense

DryStar · Post by **DryStar** » March 7th, 2011, 4:34 pm

Was just curious to know if anybody was adjusting their pricing with fuel cost per gallon reaching $4.00? If your stationary I guess it would be of no concern but if your mobile only, it would be. For my larger volume accounts it's not as much of a concern but for the many smaller ones it is. What your take on this?

t4k · Post by **t4k** » March 7th, 2011, 5:23 pm

You should charge what you think the market will bare. Each area will be different. I will charge more for individuals paying cash but some of my fleet accounts will not pay the extra.

DryStar · Post by **DryStar** » March 7th, 2011, 5:34 pm

t4k wrote:You should charge what you think the market will bare. Each area will be different. I will charge more for individuals paying cash but some of my fleet accounts will not pay the extra.

Yeah, I've experienced the same from my fleet accounts, even though they are charging more for their delivery services and collect these additional charges. Why should we eat these charges when they're not?

t4k · Post by **t4k** » March 7th, 2011, 6:44 pm

DryStar wrote:
t4k wrote:You should charge what you think the market will bare. Each area will be different. I will charge more for individuals paying cash but some of my fleet accounts will not pay the extra.
Yeah, I've experienced the same from my fleet accounts, even though they are charging more for their delivery services and collect these additional charges. Why should we eat these charges when they're not?

I am with you on that one, my friend.

Dave M · Post by **Dave M** » March 8th, 2011, 11:43 am

Seriously? You should already be charging what the market will bare. Lets assume you have a 20 gallon tank that last 1 week. The difference between $3 and $4 a gallon is only $20! If you do 20 repairs that week are you raising your repair price $1? Unless you have to travel 250 miles for one repair and I can't justify a price increase. Why not try to increase your volume by one or two jobs per week?

screenman · Post by **screenman** » March 8th, 2011, 12:14 pm

Why not drive a more economical vehicle, unless of course you are already doing so. Also drive more economically it is quite easy to increase you MPG by say 15% giving in effect just under 2 free months worth of fuel each year. Me I just do a couple of extra jobs, or slide that small increase in without mentioning it, sneaky I know.

DryStar · Post by **DryStar** » March 8th, 2011, 3:39 pm

Dave M wrote:Seriously? You should already be charging what the market will bare. Lets assume you have a 20 gallon tank that last 1 week. The difference between $3 and $4 a gallon is only $20! If you do 20 repairs that week are you raising your repair price $1? Unless you have to travel 250 miles for one repair and I can't justify a price increase. Why not try to increase your volume by one or two jobs per week?

Dave, I understand the point your making.

In 2006 business was robust when gas prices where just around $2.20 a gallon. Today our repair prices remain the same today with fuel prices close to $4.00 a gallon. The only difference is business for me is not the same that it was in 2006. Fleet, used cars, rentals and insurance work is 40% less now then it was then. If business was the same I'd probably wouldn't be concerned.

My father taught me along time ago it was about pennies saved and pennies he did save to gather a nice nest egg. We may be only talking dollars today but those lost dollars will add up. Will you respond the same next year if gas exceeded $5.00 a gallon with no price adjustment for services? I know all my current vendors adjust and charge for this monthly so why aren't we?

I currently service daily accounts that add up to 150-180 miles driven. When I only find 3-5 repairs daily from what I had four years ago at 10-15 gas prices are of a concern. Might be time to change strategy.

Dave M · Post by **Dave M** » March 8th, 2011, 4:12 pm

Dry Star,
You certainly put on more miles in a week than I do! A different strategy on your part may be needed. I've been in this business for 17 years and every 5-6 years I take a close look at my market to see if I need to change my prices. For example, I've increased my dealership pricing $15 per repair over that span of time. The increase was not based solely on the increase of fuel but the economy as a whole. I should be charging more for my quality and service but every is in the same financial "boat".

ghost rider · Post by **ghost rider** » March 8th, 2011, 4:50 pm

Holy crap Davem, 20 gallons a week? would you like to change routes with me? I average about 100 miles a day with a 4 wheel drive. My customers know how far I travel, so an increase in my pricing right now because of gas pricing will come as no surprise. The oil companies don't have a good reason for increasing gas prices, but at least they gave me one.

Dave M · Post by **Dave M** » March 8th, 2011, 5:18 pm

Yikes!! I feel bad now. In my original post I did say "lets assume you have a 20 gallon tank." I only have a 12 gallon tank which last me 1 week. I cover only a 20 mile radius.

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