How to Price Your Junk Removal Services
To be a profitable junk removal business, you need to get jobs, and you need to price them right. Charge too much money, and people won’t even give your company a second thought. Charge too little, and you’ll find yourself swamped with jobs that are hardly profitable and perhaps even a total waste of your time. Where’s the happy medium? How can you price your junk removal services correctly so that they’re affordable enough for your clients while generating profits for you?
Allow us to help you find the answers to those questions. There’s a reason we’re called Junk Removal Authority: because we’ve got the experience required to teach you the right way to go about things. When Lee Godbold, our CEO, founded Junk Doctors, he had to learn the right way to price his junk removal services from scratch. Let’s share some of that knowledge with you so you don’t have to.
Learn About Your Competition
A crucial factor in determining your prices is figuring out what the competition is charging in your region. However, this isn’t always as simple as a quick Google search. Many junk removal businesses—especially the franchise-based ones—don’t publicly display their rates. If that’s the case, then how are you going to find out what they’re charging?
Simple—by playing the customer. Just pick up your phone, find your competitor’s number, and give them a call. (A word of advice: you might want to punch in *67 first so that your number doesn’t show up on their caller ID.) Once you’ve connected with a live rep, ask for some information about their prices. Say you’ve got a junk removal job you need an estimate for, and investigate from there. Questions worth asking include:
- Do you price by volume, or in some other way?
- How much do you charge for a truckload?
- How much do you charge to pick up a specific item (a sofa, a piano, an appliance, etc.)?
Don’t be afraid to ask questions, because you’ll need all the info you can get. Then, once you know what you need to know, you’re free to hang up. Now, you know what your local competition is charging, and that’s an invaluable tool in determining your own prices, too.
Consider Your Reputation
Some businesses can charge more than others and get away with it. Why is that? It’s all got to do with reputation. If a stranger walked up to you on the street and tried to sell you a shiny watch for top dollar, would you buy it? Probably not—you’re more likely to order one online from a reputable seller with plenty of good reviews to boot.
Similarly, if you want to charge those premium prices, you’re going to have to earn that positive reputation. Don’t have it yet? Just starting out? Then you might have to lean towards the cheaper side for a while. Clients who are shopping for the best price will come to you. Do your best, delight them, and make sure to ask for a positive review! Those reviews will add up over time, and eventually, you’ll be highly rated on Google, Yelp, and other platforms. Being reputable will help you increase your prices over time!
On top of being well-reviewed, you’re going to want to perform well in the large, somewhat intimidating world of Google. Do you have a strong presence on Google Ads? Does your website SEO make you the top result for related searches in your region? These two factors greatly contribute to the number of jobs you get and netting you more profit. With Junk Removal Authority in charge of your marketing and website, you’ll quickly get great results all around. Something worth considering!
While it’s good to know your competition’s prices, it’s not necessarily good to mimic them—or try to give better prices than them—without considering the expenses your business has to cover. After all, your competition doesn’t pay the exact same expenses you do. They might use a different fuel for their truck. They might pay their employees more or less. In other words, what makes a good price for your competition isn’t always equal to what makes a good price for you!
A big expense to consider is the cost of even getting a truck out to the job site: about seventy dollars! That includes:
- The wages of your crew for riding the truck to the job site.
- The fuel that the truck used on the way.
- The wear and tear the truck endured during the ride.
- The advertising expense that landed this job in the first place!
To get a precise measure of your expenses, you need to run a P&L (profit and loss) statement. Junk Removal Authority is happy to provide more information on financial projections and even offer a helpful P&L spreadsheet for your use. Read more and download the spreadsheet on our Junk Removal Financial Projections article.
Determine Your Pricing Strategy
To make effective prices, you need to choose the pricing strategy that works best for your business. Consider the following options:
- Volume: Charging by the space the junk takes up in your truck.
- Weigh: Charging by the weight of the junk in your truck.
- Time: Charging by the amount of time spent on the job.
- Expense plus margin: Charging for the expenses plus the desired profit.
Our recommendation is to primarily use volume-based pricing, as it’s easiest to provide a firm, upfront price this way (more on this later). However, you’re often going to charge based on a combination of these factors, especially if a job throws extra obstacles at you. Need to spend a lot of time going up and down an elevator at a high-rise apartment? You might want to charge more for your time. Need to use a lot of trash bags to carry around construction debris? Calculate the money spent on the trash bags and add it to the bill.
Sometimes, you might find that your client wants you to do something that isn’t even junk removal! For example, moving around furniture, or relocating an appliance. Be willing to help, but make sure to charge for the labor. (We recommend a rate of $75 per hour.) Above all else, don’t foot the bill on any expenses that the customer should be expected to cover.
Be Confident and Do Good Work!
Once you’ve set your junk removal prices, don’t be nervous to tell your customers what you’re charging. If you’re providing an upfront quote during an appointment, and you’re scared to tell the customer what you want them to pay, they’ll be able to tell. You certainly don’t want to “negotiate for the customer”, either—that’s when you nervously knock down the price of your services to avoid any shock or surprise. Be bold, and don’t stutter. If the customer wants to negotiate, that’s fine. If you’ve negotiated for them already, and then they negotiate further, then you’re really in trouble!
Whatever you’re charging, though, do good work! Rack up those good reviews, maintain a strong presence online, and before too long, you’ll be able to schedule lots of appointments and enjoy good profits on all of them. Stick to it, and your junk removal business could earn $100K or more annually.
Shoot for the stars. Junk Removal Authority is here to help you achieve your biggest goals, so when you need hands-on consultation in setting your prices, reach out to us, and we can start talking business today.