Delivery charges/fuel surcharges

[GaryE]

We have been delivering inexpensive parts to wholesale accounts for many years without a delivery charge. As gasoline is getting more expensive by the hour (so it seems) we have been thinking about adding a delivery charge on deliveries of less than $25.00 or even less. Possibly a "fuel surcharge" like FedEx and UPS and trucking companies are adding to our bills. Does any body have any experience or is thinking the same?

[Gerry Laughlin]

Gary,
We looked at the same problem about four years ago, and just plain stopped delivery. I have always believed that with wholesale you have to either be totally committed to it or just stay out of it, there is no way to show a profit dabbling in it. Anyway, the few accounts I wanted to keep eventually stayed with me, the ones I did not want, left.

Gerry Laughlin

[chris helmer]

A fuel surcharge could be the fastest way out of the wholesale market. Unless you have no other dealers around your area, a fuel surcharge to existing customers will drive them to your competitors. However, we recently picked up an account that is a fair distance away. In negotiating a reasonable discount and delivery times, he actually agreed to a minimum charge. If he needs only a $1.00 gasket, he is billed $15.00. Knowing this in advance allows him to tell his customer the cost for the part including delivery minimum charges, upfront. Many times, he buys filters, extra gaskets, etc. for his stock to make up the difference.

[Chuck Hartle]

Chris has a good idea if you can get away with a minimum charge. In most metro areas, competition is so tough that to do this would spell disaster and chase customers to your competition. As an owner of a DSI franchise in Orange, Riverside, and San Bernardino Counties, we have 30 drivers working in many dealerships thoughout this area.
Gas is predicted to go as high a $3 per gallon this summer. We have to charge our dealerships a fuel surcharge or we lose drivers as they cannot afford to absorb the cost of fuel. What do you do?
This might be a good time to increase your pricing matrix 1 or 2 percent on the retail and wholesale garage side to cover the costs.

Here in California, we have another added cost that is killing us in the way of power. Many local businesses here in So. Cal are increasing costs to cover the expense of just keeping the doors open. By increasing your pricing matrix and offer 1or 2% less off to Body Shops, maybe this would be a better way to help maintain your profit levels through the increase.

Any other thoughts on this?

Chuck Hartle'

[tstehr]

If you decide to add a surcharge, and you want to charge it automatically, here is how you can do it on an ADP system.
Set up a new tax agency in UTA. Calculate by item. Leave STD as the group, unless you only want to surcharge certain sources. The tax account will be the sale account you wish to credit with the surcharge. The tax percent will be 99.999%. Then enter the surcharge amount in the Group tax amount limit. The sale type should be STD.

Use RTS, Report Tax structure, to see which tax codes use which agencies. Add a new tax code in UXC. Use all the required agencies in the new code, but also include your new agency.

You can change the tax codes of shops you wish to surcharge to the new tax code. Or you can override it at the time of sale in the invoice using UTX. UTO (Update Tax Options) controls what taxes can be overridden in invoicing.

This method also works for levies and environmental charges.

Ted at ADP

[dennis wood]

I agree with Chuck, now is the time to adjust
our pricing matrix to wholesale garages and retail customers to make up for the price increase of both fuel and power.
I am also a California dealership.


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dennis wood