Pricing your junk removal services is one of the most vital decisions your will make towards the survival of your junk removal business. Get it wrong and don't correct it and you could quickly be out of business. Lee talks in this video on how to choose your pricing. Check us out at https://www.junkra.com Subscribe to this channel for all the best junk removal industry info Like and follow us on Facebook at Junk Removal Authority https://junkremovalauthority.com/
Welcome! Welcome everybody to another episode of Junk Removal Made Simple brought to you by the one and only Lee Godbold with the Junk Removal Authority. I appreciate everybody for viewing this video. I hope to be able to give you lots of great information today. This is going to be something that a lot of people are wondering about, especially the brand new. They’re researching and getting into the business. They want to know how do you price. There are several different ways of going about it. Even people that have been in business for a while are going to want to know how do you price. Now, just to kind of recap, we have a bunch of videos out here now. I haven’t done this in a while, but why are we the authority in junk removal? We started a Junk Doctors hauling in the North Carolina market over the first five years. We build it to a $2,000,000 a year business by that fifth year.
So, we’re in three markets, Charlotte, Greensboro and Raleigh. What we’ve done is we’ve created the Junk Removal Authority to assist perspective and current junk removal business centers throughout the country with consulting and helping them grow their business. Helping them understand their business even when they do. Helping them reach more customers. Advertising management through customer acquisition management. That encompasses everything. We’re not just an online advertising. We research your market. We work with you to help train you on answering the phones. We figured out an avenue in your particular market by researching your market and competition. For you to get the leg up on your competition and reach more customers. To get more customers to book and make sure that works profitable. We’re not just trying to bring you a bunch of calls like a lot of advertising agencies are. We understand the junk removal business. We know what kind of customer is profitable and that’s what we’re looking to get toward to you.
Into this episode, pricing. What’s one of the first things you need to do? Then imagine a lot of you are, if you’re getting in there and you’re researching pricing. You need to research your competition. Now, this used to be much easier. I spelled that wrong, but I’m not going to worry about it right now. Used to be able to just to look online, but now these companies are starting to hide their pricing. You now have to call up.
Like 1-800-GOT-JUNK? I think somewhere there was probably a pricing estimate on there, but it’s very hard to find. What we’re actually having to do is we’re actually having to call 1-800-GOT-JUNK? Every mark we’re looking to get into, we’re calling up 1-800-GOT-JUNK? Call them up, tell them in whatever market you are or whatever zip code. Just kind of make-up stuff that you have. You just kind of ask them to explain pricing and kind of learn how they charge. Now, most call center reps are not going to give you a different pricing and different price points. You’re going to have to fill that in. It used to be online. You can online and know exactly what they charge on every individual price point, but a lot of are trying to hide. Junk King doesn’t, you can still research Junk King. 1-800-GOT-JUNK? hides it in a lot of the other franchises. Larger junk removal companies are beginning to hide their pricing.
We don’t like that. We’d like posting our pricing. We’ve always done it that way. We’ll continue to do it that way but a lot of the big ones are now hiding it. So, that’s going to be one of the first steps and that’s what you should do in your particular market. Research your competition. Understand how they’re charging. Most of the big companies charge by volume and we’ll talk about that in just a minute or two. Then the next, what’s your particular situation? Are you new or established? Do you have reviews? Google reviews. Yelp reviews, something online other than your website. Do you show on AdWords and grow organically? Why do I ask what’s your particular situation? The other thing is how much money you’re looking make? How much do you need to make?
This would be short term. We’d be wanting you to get rid of this mindset. I don’t want anybody thinking about how much you need to make. I don’t want people thinking about how much they want to make. I want that number to be higher, you’ve ever thought about your whole life, but we’ll save that for another video. You all think too small and how much money you want to make. It needs to be a big damn number. Needs to be a number that is hard for you to reach. Some of you guys out there we’re thinking, “I’m going to make $30,000, to $50,000 a year.” I want you to think “I want to make 500,000 or a million a year.”
We will talk about that right now. We’re going to stay on pricing. So, why do you need to know your situation. If you’re brand-new and you don’t have reviews or if you’re established and you don’t have reviews. You don’t show well on Google. Both AdWords as well as SEO. These two right here have reviews and show well on Google, both organically. As well as on AdWords. If you show better on Google and if you have a lot reviews and good reviews. You can charge more.
Charge more if good. Why? Because customers are going to be more likely to choose you even if you’re more expensive if you had better reviews. If they find you first, you’ll get a lot of customers that just want to get it done. That’s been our major advantage with Junk Doctors. We show everywhere. We have a lot of reviews. People know we do good work. I see we’re a pretty good-sized outfit that we’re locally owned. They want to use us. They know we’re going to get to them next day if they needed it done quickly and we’re going to do the job right. That’s why CAM is so important. Partner us with CAM, customer acquisition management. We can get your stuff right. Where these customers see you just like they see Junk Doctors. It’s a long-term play right there. We’re going to work with you long-term. We’re going to get your stuff right. Where you got a business that’s seriously can expand like crazy. If you’re new or establishing, you don’t have good reviews and you don’t show well in Google. You might need to lower your prices because you want to catch them. You want to catch people who are price shopping.
Price shopping customers. Those are the people you’re going after. That’s why it’s so important to get your stuff right at the start when you first get going. Maybe if you’re doing the Google deal. You don’t have very good reviews, but you are showing well on AdWords. Your probably not showing well organically. You still probably need to play that price game a little bit. If you’re showing top of AdWords, maybe not quite as cheap because you will catch people that just pick the first result and roll with it. Until you have that reputation through reviews to back it up. You’re probably going to price a little less. So, play the cheap game a little bit. Say I’m cheaper than everybody else that you want to put a price comparison tool out there. Get more customers that way. Then being pounded on. Banging every single one of customers for reviews. Make sure you do a good job. Bang your team members to make sure they ask for review. So, you got to do a great job and then you got to ask for reviews. Then you need to send off an email with an easy way for them to post a review. Get those reviews, work with JRA on CAM to get showing better on AdWords and organically. Then you raise your prices up. Get those prices up. Get your margins higher.
What is your situation? That’s what you need to consider. How much do you need? That’s going to determine how cheap you can go and then forget that. Raise up your need to level 5 or 10 times higher than what you really need once you get this other stuff straight. So, you need to know expenses. What are expenses and your margins? You just need to figure out all of your expenses throughout an entire job and you’re going to make about 30% on it. Maybe you accept a little bit less at the start. Maybe 20% or whatever. If you’re on the truck, you do need to account for your time, but you can fudgel a little bit. So, if you’re not accounting for your time, you’re going after the total profit. You know when you first get going, they will determine how cheap you can go and how many more customers you can get which will help you in turn get more reviews. Which would then allow you to raise your prices though. Understand that you need to be monitoring this with your first week or two in operation. Monitor expenses and income. Run a real profit and loss statement. An actual P and L then figure your expense percentages and make sure they’re about where the need to be. We have a bunch of videos posted on a year on desired expense percentages as well as a blog post on junkremovalauthority.com for you to find out that information.
Don’t ever assume that if you’re pricing is similar to the competition, that you’re actually making money. Their situation could be completely different. They might have a deal for cheaper disposal rates. They might have fuel on site and pay less on fuel. They might pay their people a lot less. You don’t know their particular situation. Always run your own numbers and understand your expenses and margins.
Junkremovalauthority.com has a return on investment spreadsheet that you can download. If you have any issues downloading, email me [email protected]. I will give you that ROI spreadsheet access. That’ll help you out determine your pricing. Of course, JRA I’m always in one hour. If you do a little research and I have you do the research, you can work with me for one hour by an hour of consulting under $150. I’ll help you set your prices and you’ll be ready to rock and roll.
Your pricing strategy, what it is going to be? Is it going to be volume, weight, time, expense plus margin or combination? What it is going to be? Most people chose volume because that’s what we recommend normally. There is going to be a little bit of a combination going on here. If you charge by volume, so just depending on the amount of space it takes up in your truck. You’re going to have a minimum and maximum. You’d have about 12 price points in between. For example, we have a minimum and an eight to sixth load, quarter, third, three-eights, half, five-eights, half and all the way up to full. You know, we work through several different price points, but you likely will want a limit on weight. So, if you get to a job that’s very heavy, you’re going to have a way of charging more for that. You could charge my bed load. That’s how the big companies do it. 1-800-Got-Junk? they charge bed load, it’s anywhere from their minimum to the maximum price. Generally, like for $450, but that’s only to a foot in depth. So, it’s 8 by 10 and 1 foot high. That’s how they do bed load pricing. We like doing it. It is more of the heavy stuff. It is more of an expense plus margin. So, reason being is some stuff, some concrete is heavier than other types of concrete. Just depending on how it’s made. Bricks and shingles, you can go higher than a foot. Tiles, you might be able to go higher than a foot, but if you have a lot of gravel that’s very time consuming. A lot of times expense plus margins run your expenses. Figure your time, where you can estimate the weight do expense plus margin.
The other thing is, if you have a very time-consuming load. You’re going to be bagging up a lot of stuff. You might want to charge extra for trash bags or at least if it takes per truckload. If each truckload takes like 1 or 2 hours, charge an additional $50 to $100 per hour for that additional and extra time. That’s the way you go about it. I did see a very neat concept. Somebody you could look into and give you a little bit of a competitive edge by doing something differently. There’s a company out there that actually charges by weight, so they actually have scales on the truck. When they load the truck up and tells them how much more the truck weighed. Compared to its empty weight or before the start weight. When got there and then the customer pays per pound. The problem with that is, it’s going to be very difficult to give a firm estimate up front. We’d like getting a firm estimate up front. However, that is a very unique concept.
Do not be afraid on some demolition jobs and concrete, dirt especially concrete demolition. Really heavy stuff. Don’t be afraid to call up and sub that work out to a either somebody who does all the work or a guy with a dump truck. We do this all the time. We got a guy who comes that charges a $75 per hour from the time he starts driving to the job site to the time he makes his last dump and heads home. $75 an hour plus disposal. We can fill his truck all the way to the full load. It’s much cheaper to you to go that route, so you can charge your customer a lot less too. Most of the trucks that we use on junk removal industry. The single axle trucks cannot hold a lot of weight. Do not overload your trucks tremendously. One, you will get a hefty fine from the highway patrol. Two, you can damage your truck. Three, you have a huge safety hazard. If that truck gets in a wreck and it’s overloaded, you could be facing some pretty serious penalties.
So, I don’t mess around with an overfilling your truck. Again, I didn’t want to mention something I said. Job takes longer. You let your customers up front though. This is going to be a time-consuming job. We don’t know how long it’s going to take. It’s probably going to take an additional 2 hours, so you’re going to be paying another. The way we charge, it’s $50, $100 or $200 bucks an hour. So, your expenses are higher than you anticipate. You need to get recoup for it. Don’t be afraid to do that unless that some sort of a selling point that you don’t do anything like that.
The other thing is surcharges on TVs. Anything that costs you money, you need to be marking up. If a TV costs you $5 to dispose, we charge $10 for that TV because it’s in another facility. We have to take it to that facility. We have an additional expense rather taking it back to the office and stacking up a huge load until we make a run or if it’s taking it separately straight to the recycling center. You have two locations. You have additional time. You’re paying your people. You have additional fuel. You have additional effort. Where you can’t dump that, you have to hand unload it. Upcharge your surcharges, TVs, tires and whatever else. Computer monitors, whatever else you have to upcharge. Make sure you pass that on to your customers unless it’s a selling point that you don’t have sort of surcharges. I don’t think it’s a strong marketing point but depending on your particular area.
You want to give them to give a firm price up front? Why do you want to do that? Because it’s a huge selling point. When people call up to you, you need to let them know that you’re going to give them a firm price up front. Once you get there, it’s no obligation and you’re going to book a lot more jobs. So, you need to make sure you do that. Now, when you go and give that price estimate, do it with confidence. Don’t be uncomfortable. Don’t look around and say, “Judy, you’re probably looking at like $480.” You know what I mean? That was a bad acting job there, but you know what I mean, you need to walk right up and say, “Judy I looked at everything you have. You’re looking at $480 here today. All I need for us to get started is you just assign right here. Would you like us to get started?” She says, “Yes.” Get that signature. You have a lot less price negotiation. People will tell you no when you give that price with confidence. Be confident in your pricing. Also, don’t talk you down. Generally, if you’ve looked at everything and you come up with a certain price. It might be a bit more expensive. Very seldom, you might have over quoted. What will happen is people will look at that price. It might be three truckloads. It might be 1500 bucks or whatever. I really don’t want to tell her $1,500 and you’re working back down. Don’t do that. You don’t negotiate for her. Walk up and say “Judy, it’s $1,500. Just need your signature right here to get started. Would you like us to get started?” If she wants to negotiate and deal with it at that point, but don’t do the negotiating. Don’t shoot and negotiate yourself, because if you bring it down, she might also try to bring it down. Then you’re really screwed.
Confidence is key when quoting these jobs. If the customer does want to negotiate. I always look for, is there anything you can sell and is there any scrap metal income. If there is, you have a bit more room to wiggle. The other thing is how long is it going to take you? If it is a garage clean out. You can load it up and it’s a full load. You normally charge $490. You might be able to come down. You might not want to volunteer that right off the bat, but you have more room to work. The other thing is how far you driven? How much expenses do you have to get to that job? How busy are you? If you’ve been slow, you got a lot more to negotiate. If it’s been a busy day for you and you’re behind, this is an opportunity for you to catch up. Maybe you don’t negotiate as much. Always remember though, you tell the customer, this is a one-time negotiation. So, this is a one-time price. If you back out, we won’t be able to do that again. Always make sure you inform the customer about that.
Some other stuff you will occasionally encounter. It is a general labor type work, so people will call you out just to assist them in moving stuff around their house. How do you charge that? Generally, general labor typically does a trip charge, like a $50 or $75 plus something like $75 an hour pro-rated. So, don’t charge them for full hour. If it doesn’t take a full hour. You’re giving that break. If it takes 30 minutes, only charge them for half that time. So, sometimes what’ll happen is you’ll do a combo of general labor and junk removal. What we do in that case is a regular rate plus general labor pro-rated for only labor. So, this right here is something that will come up. General labor is something you can up sell to. At the end of the job, ask the customer if there is anything else we can do for them. If they want you to move stuff around, it’s going to take more than a few minutes. Charge them a general labor. Let me, I’m just going to be additional $75 an hour or whatever. You know canvas can be an additional set for $5 per an hour or whatever. This is good up-sell opportunity. Upselling right here.
Sometimes you’re going to need to assist with sorting. This is the job that you might not be able to quote up front. You could potentially give a worst-case scenario. This would be like if they’re not sure if they have multiple truck loads or something. They’re not sure what’s going when staying. You can say everything in here goes. This is your worst-case price. Then what you need to do the job is time the job. Pay attention to total load size. You need to figure a percentage of time on labor. How would you do that? If it took you two hours, let’s say 2 full truckloads that took you 2 hours. 2 full truckloads you handled. You only have one full truck load in your truck. Half your time was spent on labor, so you should have a full rate $490 plus your hourly rate. Let’s say it’s 100 bucks and there’s 5 to 9 in your total. Email me or call us +1 919-466-9322 or [email protected]. The easiest way is you just email me. I actually have a worksheet that you can use. Your truck teams can use to help figure the price because a lot of times it’s not so specific. A lot of times it’s like a load and a half, you might have five eights of load. Whatever the remainder amount is. It’s on the truck, those are harder to figure. We actually have a sheet that will walk you through that entire process.
Generally, if it is a smaller demolition, you might want to charge $50 to $200 for small demolition. That means in addition to volume. So, playhouses and sheds that kind of stuff. You know that sort of deal. Don’t be afraid of price increases. Watch your expenses. Watch your expenses on fuel, disposals, payroll and advertising costs. If any of those go up and you can’t limit them then you need to raise your prices. Do not be afraid to raise your prices because you’re increasing your advertising. If you could have the cheapest service in the world, but people don’t know about you. Nobody can take advantage of you. It’s selfish you to keep your prices low where you can’t reach more people. You have a service that’s needed in your community. By keeping your prices low, you’re unable to raise your advertising as much as you need to. You’re withholding information from your potential customers. You’re keeping them in the dark and that’s selfish on your part. You need to raise your prices up where you can do enough advertising. Where you can reach more people or more people can be exposed to your service. You can be profitable at the same time. Get your prices right and know your numbers.
This is how you price, this might be a little quicker video than we typically do. I think there’s been some good value. I think a lot of people probably had liked the value and how to charge extra for a job to take longer. Surcharges, general labor and assisting with sorting. A lot of this information is available by going out looking, but I do feel like this is some great points of everybody called. Watch this video a couple times before you price. I highly recommend if you do the initial research, I’ll tell you what you need to research. Then we can get on the phone, I can look at your numbers and we’ll help set your pricing. $150 we can do it for an hour and we should be able to. If you need good research, we can do it in an hour for $150. That right there, you’ll make it up by having your pricing right. You’ll be able to get enough customers because your pricing is right. You will be able to make money that you’ll easily cover that $150 in no time. Where you can try on your own and mess around then eventually get it right, but it’s going to be more expensive than that $150 if you’re brand new. I guarantee it. CAM, customer acquisition management as well as AdWords. We can start you out on AdWords. Gets you that instantaneous business. First month, $2,500 for AdWords. $1750 for month 2, 3 and 5. $1250 for month 6. If you do CAM, $3,000 a month, it does not include anything from Google. You’re paying google as well. On AdWords probably at least another 2 grand, but we’re going to make sure the business we bring you is profitable. It might take a few months, to get everything just right. We’re going to make sure the business we bring you is profitable. We’re going to help you really expand. Reach more customers. That’s more repeat business that you’re going to get in the future and more potential referrals and reviews. That’s going to help up your organic ranking and we’re going to bring you organic ranking up with CAM. Also have websites or sale, basic sites for $3,000 and full sites for $5,000. Business package is priced at $25,000, $50,000 or $100,000.
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