pricing?

hl_tree

Member
What do you guys charge per gallon for doing sub surface applications like compost tea and various fertilizers?

Somebody who has been mentoring me in the spray business said to get $1.50 per gallon roughly, but if I have to... go down to $1.00 per gallon to get the account.

I spoke with somebody tonight about compost tea, and he said a guy he deals with gets $6.00 per gallon to apply it.

What are you guys getting? Just curious if I am too low on my pricing???
 

mrtree

Well-Known Member
You are only too low if you are not getting the profit you want. Don't worry too much about others, they likely have very different operations and costs than you. You need to calculate cost per job, add profit and find your total.
 

Chum

New Member
$360 per 80 gallon sprayer tank, which treats roughly 6-10 2foot or more dba oaks, which for urban yards means generally 2 customers (around here).

But keep in mind I specialize in diseased oaks, not other trees, then it's variable due to the componants I include or not. When including pseudomonas, a bacterial antagonist, the price goes much higher due to manufacturing time and trouble.

For the standard treatments like Fe, Sulfur, Zinc-copper with a soup similar to HastaGrow and soap...for Chlorosis and decline, it's an even $200.oo
 

Mangoes

Well-Known Member
Asking others to communicate their costs is to know the market. But as Mrtree pointed out solid business aptitude requires you evaluate your own costs and establish a profit margin.
 

Morice

Member
I agree with Mangoes and Mr. Tree, you've got to determine your costs and labor invovled....and you have to know your client base! I never worry about what other companies might be charging, if our clients trust us, as well as, our knowledge, experience, and high level of service, they will pay what we know is a fair price.
 

Chum

New Member
One thing that's always perturbed me is the notion that one charges "what the market will bare". We were told that from a Federal Small Business counsellor alongside a local banker underwriter. We walked out of that meeting in disgust.

Just calculate costs-plus a percentage and time.
 

Chum

New Member
An addendum to pricing nutritional treatments:

Years of juicing landscape plants often effects the volume of what we think is necessary to feed correctly. The old days of NPK protocols are out. We're not looking to directly treat the tree (or bushs), we ammending soil conditions to release elements as much as were providing micro-nutrition directly to the target.

Pricing of compounds off the shelf IS a market-driven structure, most retailers 100% -up the wholesale costs and most products - if you look closely - are carbon copies of the next product. There's been a feeding frenzy to provide "sensible" solutions to growth questions, most bottled resources are no different than each other, just catchy names and attractive containers.

I try to provide solutions to customers by telling them what to buy - on the cheap - from the feed store to treat themselves, and how to apply it. Often it's micro-elements or compounds hidden in livestock feed (molassis in sweet mule food) or even by-prducts of industrial manufacture (ferrous sulfate) instead of pricey "chelated iron" for landscape use. Surfactants and adjuvants come hidden as commercial dish soap instead of "Sincocin" or Guardar surface tension molecular breakdown solution ($.02 per mL instead of $42.50 per quart).

I guess it's more of being responsible to people and trees instead of the much-sought after "bottom line" of business, something we're conditioned to be a problematic part of, being the material we think we need to be a success in life - or how we sleep at night.

By keeping the big boys away by providing alternatives to people, sure I'm a nasty pest in the tree biz models here but the money thing can be looked at as the harbinger of global problems and responsible stewardship is more than just giving a few bucks to the United Way or a bumpersticker that claims you care for the troops or will plant a tree to save the earth.

If imagry still is considered the measurement by which a successful tree outfit is qualified to work on diseased or problematic trees, or not, consider this - side by side studies with live specimens with controlled treatments on identical species with confirmed disease spread and the winner gets to decide which protocol is allowed to legally be promoted for use the next year in that municipality.

I'm rooting for the sensible guy, with efficient cost-effective vehicles and equipment, that's utilized recycled gear to build a less expensive rig to effectively treat with minimum effort the problem the homeowner called about and dis the need for uniformed battalion-strength starched-shirted bullshitting certified ag-schooled fleet-vehicled clipboarded "expert company" mainstream conglomerated cloned cheap wage but high profit national outfit that often is offering something they put their name on but is nothing more than feed-store cheap ammendments we all can buy, even the homeowner.

Charge accordingly, not greedily, and they will come.
 

KyLimbwalker

Well-Known Member
[ QUOTE ]
One thing that's always perturbed me is the notion that one charges "what the market will bare". We were told that from a Federal Small Business counsellor alongside a local banker underwriter. We walked out of that meeting in disgust.

Just calculate costs-plus a percentage and time.

[/ QUOTE ]

I know that economics sounds boring and inhumane sometimes, but what the FSB counsellor was suggesting is sound business. "What the market will bear" does not suggest overpricing. Sometimes "what the market will bear" doesn't even cover some suppliers' costs. (Just think of the plight of small farmers).

The percentage above your costs reflects the market part. This takes into account how many competitors offer similar services, how customer's value your services, etc.

A simple way would be to compare your prices with a similar competitor's price and match it (exceed it if you can and still have work).

Also:

When you determine your costs, also include your opportunity costs and risk:

Robert can make $500.00 net a day pruning trees. In order for him to not prune trees and fertilize instead, shouldn't he make at least as much net? Yes? Then he should price his services accordingly.
 

Chum

New Member
I concure, but the last part - "shouldn't he make at least as much net?" No.

When an oncologist performs a clinical extraction of a surface tumor, without the need for supportive staffing and other M.D.-level assistance (anesthetist, pathologist, etc.), his charges are less due to proceedural needs.

Likewise with the breakdown of tree work by function - my bidwork is free, indirectly, and infrastructure of disease work or even general feeding requires much less input therefore less charing structure. Perhaps it's my own prejudice working as well, for the work I got other tree people to replicate, using the same protocols, I find charges out of sight and primarily due to their own admission that "the market bore us out", or in other words.."they were willing to pay our estimates". They literally copied the costs of much more expensive chemical injections citing end-results of positive responses. Why?
Because people were willing to pay it.

Alternatives developed for more sound choices in tree disease work (or even feeding) include cost alternatives. Costs are what attract people to these alternatives primarily, then the issue of less-toxic remedies for problems. To keep competitive on high-end rewards signals more of a need to cash-in instead of performance of work and ethical issues, and bottom-line assumptions and goals are a big problem in today's real world.

Don't know if that explains it, but it just came out. REgardless of the years of research, unfunded, I tally my costs into the big picture and they don't justify still, the pricing of the big boys with the toxic juices and global adverts. Keep in mind for example, a 30-gallon barrel of propocanazole in Honduras costs less than a barrel of diesel fuel, yet here, when licensed for oak wilt, can run $450 a liter. Same research, same compound, same manufacturing plant.
What's fair and what constitutes greed?
 

KyLimbwalker

Well-Known Member
[ QUOTE ]
I concure, but the last part - "shouldn't he make at least as much net?" No.

When an oncologist performs a clinical extraction of a surface tumor, without the need for supportive staffing and other M.D.-level assistance (anesthetist, pathologist, etc.), his charges are less due to proceedural needs.

[/ QUOTE ]

My example was a very simple way of describing that as an arborist, you should recognise your opportunity costs. I see the ethical path you are describing, and certainly, we expect doctors to perform procedures without thinking of their net income. However, recognizing your opportunity costs is rational behavior, even for doctors. Imagine a scenario in which you oncologist starts to perform extractions of tumors to the point at which he/she doesn't have time to perform procedures with a higher net income (which also may maximize his/her natural talents). Do you expect that oncologist to keep performing that work? In a realistic model, that oncologis would either 1) refer those tumors somewhere else or 2) hire another oncologist for less pay to extract tumors.

The same thing happens in the tree care industry. Recognition of this doesn't mean you are this money grubbing person, it means you are maximizing your talents.

[ QUOTE ]
Likewise with the breakdown of tree work by function - my bidwork is free, indirectly, and infrastructure of disease work or even general feeding requires much less input therefore less charing structure.

[/ QUOTE ]

How is your bidwork free? It costs you money and time and it costs your potential client at the very least time. And by input, do you mean time?

[ QUOTE ]
Perhaps it's my own prejudice working as well, for the work I got other tree people to replicate, using the same protocols, I find charges out of sight and primarily due to their own admission that "the market bore us out", or in other words.."they were willing to pay our estimates". They literally copied the costs of much more expensive chemical injections citing end-results of positive responses. Why?
Because people were willing to pay it.

[/ QUOTE ]

We have the same problem. Hacks selling substandard work for the same price. "We'll prune your tree for $50 less!!!" and then we find out that the climber only went into the first 1/3rd of the canopy, or just took out a few pieces of deadwood. This is why we always have to constantly differentiate ourselves from lesser competitors.

[ QUOTE ]
Alternatives developed for more sound choices in tree disease work (or even feeding) include cost alternatives. Costs are what attract people to these alternatives primarily, then the issue of less-toxic remedies for problems. To keep competitive on high-end rewards signals more of a need to cash-in instead of performance of work and ethical issues, and bottom-line assumptions and goals are a big problem in today's real world.

[/ QUOTE ]

I think I know what you mean, but tell me if I missed your point completely: you are suggesting that we should not always suggest the high-cost alternatives. I agree. We want to recognise the client's wants and needs. In developing trust with your clients, you are in the odd position of balancing their need for tree care with your need for money for services. You also want those clients to be repeat clients. Suggest alternatives with prices. Give them information and let them choose. As long as you have well-informed clients, you don't have to get involved in the sticky world of what price is too high or low. Clients have different incomes and incentives too. Keep this in mind, they are not unaware of what they pay for.


[ QUOTE ]
Don't know if that explains it, but it just came out. REgardless of the years of research, unfunded, I tally my costs into the big picture and they don't justify still, the pricing of the big boys with the toxic juices and global adverts. Keep in mind for example, a 30-gallon barrel of propocanazole in Honduras costs less than a barrel of diesel fuel, yet here, when licensed for oak wilt, can run $450 a liter. Same research, same compound, same manufacturing plant.
What's fair and what constitutes greed?

[/ QUOTE ]

Not to be crude, Oakwilt, but I don't believe in fair. I believe in free markets. Can you import that barrel of propocanazole into the US and sell it cheaper than $450/liter? If you can, while covering your costs and expected income, then you should. I don't know why that barrel is cheaper in Honduras, but saying that it's not fair leaves me wanting. Perhaps the higher cost in the US takes into account environmental charges. Who knows? I think that we have to be careful in judging other companies prices. As long as we compete on a level field (no illegal immigrants, no cash under the table, workers compensation paid, etc.), then we can see what the market (the people) want.
 

Chum

New Member
Good discussion.

The part of my bid work being "indirectly free" only applies to the client - meaning they don't compensate for that particular trip...the costs to me are diluted out into the entire yearly profit ratio. When our meeting extends beyond the task being priced, competitively, we enter the area of consult which begins generating fees depending on the advice given. I point that out if our discussion heads that way.

I hear what you're saying, loudly, and respect that you've studied business models - a discipline I'm sorely lacking experience in. One of the conscious decisions I've made particular to disease work, in oak wilt's case, was to approach with an open mind and that somehow circumvented the need to realize economy in such an endeavor. Perhaps it was due to the feeding sharks decending upon my test sites when opened to peer review - the attorney's representing chem co.'s were more numerous than pathologists. The first "race to market" offers diluted the effectiveness of the protocols, but I couldn't publish without sponsorship and clearly that came only when I would accept terms of dictation and sign exclusivity and trade secret contracts. This all missed the point, by several light years.

Recently, after a hiatus of a few years to "clear my mind again", a repeat of the origin of shared treatment offers...people hiking the price beyond what most affected homeowners could reasonably pay. This transcends the importance of treating an epidemic, takes the work to a business model I find myself fighting and retreating from again. It doesn't cost more than "fertilizing" the lawn yet because it's unique and effective, it should net thousands? Not in my mind, I don't want it to mimic the American health care model...it need not.

If you would care to - over time - give me some pointers and keep in mind that I'm an idealist, please don't hesitate to open yourself to my needs and I'll do likewise, an approach I'm very confortable with. My father's funeral was a eulogy presented by many people affected by his life of barter, I'm his son and it's part and parcel to who I am and why.

Again, good dialogue and thank you.
 

KyLimbwalker

Well-Known Member
I agree Oakwilt- good discussion. Maybe we can get together and have a beer sometime and talk business models. The beer to counter the sobering effect of reality. I often find myself debating my ideals and what I consider realistic exchanges between people. I have come to believe that people respond to several different types of incentives, not just money. Money itself I see as the most liquid form of exchange for goods and services, and the most efficient. We too barter some services, though I sometimes think that people would rather finish the exchange sooner than later, as most people don't want to feel indebted for any length of time (because the future is uncertain). I think that we probably share many of the same goals- I get the impression that you are very community driven. Me too. I try as much as possible to churn my dollars within the community. Here is a poem by a local writer Wendell Berry (who I admire) that touches on some of the intricacies I think we are talking about:

Mad Farmers Liberation Front

Love the quick profit, the annual raise,
vacation with pay. Want more
of everything ready-made. Be afraid
to know your neighbors and to die.
And you will have a window in your head.
Not even your future will be a mystery
any more. Your mind will be punched in a card
and shut away in a little drawer.
When they want you to buy something
they will call you. When they want you
to die for profit they will let you know.

So, friends, every day do something
that won't compute. Love the Lord.
Love the world. Work for nothing.
Take all that you have and be poor.
Love someone who does not deserve it.
Denounce the government and embrace
the flag. Hope to live in that free
republic for which it stands.
Give your approval to all you cannot
understand. Praise ignorance, for what man
has not encountered he has not destroyed.

Ask the questions that have no answers.
Invest in the millenium. Plant sequoias.
Say that your main crop is the forest
that you did not plant,
that you will not live to harvest.
Say that the leaves are harvested
when they have rotted into the mold.
Call that profit. Prophesy such returns.

Put your faith in the two inches of humus
that will build under the trees
every thousand years.
Listen to carrion - put your ear
close, and hear the faint chattering
of the songs that are to come.
Expect the end of the world. Laugh.
Laughter is immeasurable. Be joyful
though you have considered all the facts.
So long as women do not go cheap
for power, please women more than men.
Ask yourself: Will this satisfy
a woman satisfied to bear a child?
Will this disturb the sleep
of a woman near to giving birth?

Go with your love to the fields.
Lie down in the shade. Rest your head
in her lap. Swear allegiance
to what is nighest your thoughts.
As soon as the generals and the politicos
can predict the motions of your mind,
lose it. Leave it as a sign
to mark the false trail, the way
you didn't go. Be like the fox
who makes more tracks than necessary,
some in the wrong direction.
Practice resurrection.

-Wendell Berry
from The Country of Marriage, 1973
 

Chum

New Member
Wendell came up to MN to help fight the 800KV powerline, alongside him (on a few of the easy days) were Paul Wellstone, a couple hundred others, and myself. That was in the latter 70's. The struggle got instense the more construction occured, weeding-out the peaceable participants but in no way ended opposition. On this issue, many people and groups came together from all ends of the spectrum - from John Birch Society members to the American Indian Movement. Dangerous liasons for the controlling elite and a core of my values to this day.

I really haven't bartered much in terms of disease work, other than test sites established for use of property and ongoing sampling. On climbing and pruning it's another story (got to eat). Just because the standard therapies have priced themselves out of use in most applications - not to mention the failure rates of such, there is no need to ride the back of established pricing indexes. One reason there is epidemic is the incentive for broad-scale management is lost in the fact that most people can not, nor will adopt such programs. A sad tribute to try to change that was the State's offer to underwrite half the costs - instead of implementing investigations into the industry to find out the profit ratios and connections to tax-funded state programs. Another line item that contributed to my offering $20 per tree (+/-) instead of $350(+). I still made money - more than I ever had before in tree work (recognition helped). We're not doing rocket science or oral surgery (most of the time anyway).

Beer sounds good. So does a shot of Jack with it.
 

KyLimbwalker

Well-Known Member
[ QUOTE ]

Beer sounds good. So does a shot of Jack with it.

[/ QUOTE ]

True that.


That's cool that you know who Wendell Berry is. When I graduated from college, I worked with a horse-logger that Wendell kind of promoted. I got to know a few people that knew Mr. Berry and his wife Tonya. Kentucky Sawyer has a farm sort of close to their's. The horselogger turned out to be lazy. An intelligent person, but the kind that is unable to finish anything. So my life lessons included "don't believe everything you read, even from your heroes" and that real change is made up of a little inspiration and a lot more perspiration. Hope I get to meet you sometime, Oakwilt.
 

Chum

New Member
We'll meet next time my wife comes to Knoxville - I'll tag along and tour around a bit (she's the honoree at the Ross' Landing event). Looking forward.
 

KyLimbwalker

Well-Known Member
Sounds great. If you want to make the jog up to Louisville, you are welcome (like all Treebuzzers) to stay at our shop. We are now in the process of getting a wood stove up and running in the shop (we have gas heat in the office and bedroom).
 
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