The other day, I received our renewal contract for the landscaping services here at our warehouse in Wixom. It was an interesting approach by the contractor to explain some of the uncertainty in the market and how that affects pricing. See what you think. Part of the notification read:
“Due to the unstable fuel market we need to impose a fuel surcharge this season. We will only do so if fuel reaches a certain level as we will have a tiered charge system.
If gas reaches
$4.50 per gallon, 3% will be added to your bill
$5.00 per gallon, 7% will be added to your bill
$5.50 per gallon, 10% will be added to your bill”
Obviously, landscaping services use a lot of gasoline at every job so it is different than window cleaning. However, window cleaners spend a lot of gas driving to job sites. In both industries, the cost of gas is a definite “uncontrolled” type of real cost that contractors face.
As a customer of the landscaping company, while I did not like hearing that the pricing might increase, the notification was explained in a way that made a lot of sense to me as a business owner. Also, the notification tells me that the market is still perceived as unstable or uncertain.
I thought this notice was an interesting approach to try and pass along real increases in operating costs. How have you managed to maintain profit margins in this market?
See you soon.