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Bagged to bulk

By:
  • Erich Oelschlegel, ASM
- Posted: February 15, 2019

Our company, Suburban Snow Plow, has always been a snow-only family company. My father bought a used Jeep in 1973 that came with a plow. He began plowing on the side; and apparently, the apple hasn’t fallen far from the tree. When we’re not plowing, my siblings and I are telecom project managers, school teachers, web designers, students and stay-at-home moms.

As seasonal workers, we relied on bagged salt, which is the usual starting point for most snow removal companies. As a product upsell, bagged salt is fairly profitable and initial costs are low, especially for servicing residential properties. Tailgate-mounted spreaders are reasonably inexpensive and also provide sufficient capacity to service larger lots, although refilling may be required midway. Bag counting provides an easy way to calculate and monitor salt usage. Storing and handling is a breeze, requiring only a forklift to load, unload and move materials around.

However, there have been growing pains. When we started using brine, the mixer took up half of the garage. When we outgrew the other half, bagged salt pallets had to get stacked against the fence line. In the 2017-2018 season, our property count grew by 50 percent without much growth in available equipment. Routes got noticeably longer and trucks started coming back mid-shift for a second pallet of salt. Nationwide shortages threatened availability, not to mention long lead times from order to delivery. Clearly, bagged salt could only scale so much and would not be able to keep up with demand.

As the business grew into commercial properties and larger lots, bulk salt began to look very appealing. However, this next step required careful thought and consideration in addition to some steep initial costs. A number of hurdles stood in our way. We weren’t able to store large quantities of salt. We needed a dedicated yard to store and handle bulk salt, something that was hard to come by (or cost prohibitive) given our urban customer base. We would also need new equipment.

Bulk salt is a long-term investment. While the price of bulk salt is attractive (at about a third of the cost of bagged), the infrastructure required and other overhead costs are daunting. In fact, some companies may not see an instant return on investment.


Here are some things to consider before making the switch in the February issue of Snow Business.

 
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