June 20, 2011

US Airlines Collect $3.4 Billion in Baggage Fees

By Paul Bieber

In 2010, US Airlines collected $3.4 billion in those annoying baggage fees, up 24% from 2009. This is what an industry does when they can’t raise prices, but costs go up. Doesn’t this sound a lot like the energy surcharge? If you are a glass shop anywhere in the world, you have competition; you just can’t start charging a new fee that your customers will pay because they have no choice. You have competition, so what can you do?

The airport serving where I live has two carriers, Southwest and US Air. I try to fly Southwest on trips simply because of the baggage fee. But, there are no Southwest-type options for us in the glass business. Each glass shop has too many competitors to be the one that stands out. The advertising budget to let the community know what you are offering would certainly be greater than the increased business you could bring in.

Just about everyone charges a minimum for a service call; you may be able to raise that a little. What you can do is charge more where it costs you more. If a customer needs a service call where you will have to pay overtime, such as 6:00 in the morning, or 7:00 at night, you can charge a premium for labor. Not for your time in doing a quote, however. Your time is just part of overhead in giving estimates or following up on a job.

Make sure you charge for tolls you pay going to the job. Mention this in your quote. If you are going to a secure site, like an airport, and need to spend an hour in line waiting for security clearance, be sure to include this cost in your estimate as a separate line item.

On your estimate and invoice, clearly state your terms, and be sure to add a phrase detailing an additional 1.5% charge for bills over 60 days past due, no matter what the agreed payment schedule is. If customers don’t keep the schedule, you should charge this premium.

If the customer asks you to remove extra construction debris, then it is alright to charge for your labor and the extra cost of your dumpster or dumping fees. Sure you want to be a nice guy and do something extra for your customer, but don’t do something that directly costs you money.

Don’t be afraid to charge for a second visit to a customer when they weren’t ready for you on your first scheduled visit. You load your truck, and schedule the day; if they didn’t have the courtesy to tell you in advance to hold off, then they should pay you.

Make sure you know what your fabricator is going to charge you for oversize glass, special edge work or shape cutting, rush service or anything out of the ordinary, and be sure to quote this up-front. You should also add your mark-up to these additional fees.

On all of your quotes, be sure to add a time escalator. If the customer calls you back in six months and says they are ready for the job, it may be very tough to honor the old quote.

In my opinion the best extra you can give a customer is doing exactly what they ask for in the original quote. Do the job neatly and leave the job site with your product perfectly clean. Have them sign off that the glass is fine before you leave. If you do great work, at your quoted pricing, you will get referrals, which are the best source of work for any glass shop.