Running costs vs delivery charges

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Sun 16 Jan 2005 20:33
Running costs vs delivery charges - legacylad
Having recently acquired a retail business, I am increasingly being asked to deliver low value (£20/£40) bulky items after work.Depreciation on my 2.4d VW Transorter is minimal after 7 years, but it still requires fuel and servicing!I do not wish to turn away custom, but I refuse to deliver free of charge.My actual fuel cost is around 13p per mile, but wear & tear have to be taken into consideration, so I propose to charge 30p per mile, which includes my time.
Are there any websites which give guidelines as to average running costs, or a template which I can use to work out mine?
Suggestions/opinions please.

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Sun 16 Jan 2005 21:10
Running costs vs delivery charges - frostbite
30p per mile sounds very modest - I think 50p would be better towards your expenses, perhaps also a minimum £1.50 and you should still be cheaper than any alternatives.
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Sun 16 Jan 2005 21:17
Running costs vs delivery charges - Aprilia
Are these items which you are selling and people are then asking you to deliver?

I think it depends what the competition are doing. People look at the 'all in cost' and make a decision based on that.

I recently bought a microwave from Amazon. Free delivery and cheaper than local Comet store. Why bother to even go out in the car when I can get it delivered at a lower price? Mind you, could be awkward if it goes wrong ;-)

I think the Inland Revenue reckon about 40-50p a mile (others will know better).
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Sun 16 Jan 2005 21:14
Running costs vs delivery charges - DavidHM
Hmmm... assuming that tax and insurance are fixed costs, all you can really factor in are servicing, repairs and tyres. Tyres will probably stand you £200 a set (25k miles average), servicing probably £150 every 10k miles and repairs probably £25 per 1,000 miles (hopefully less but not unreasonable if the van is 7 years old...)

That works out at 4.8p per mile.

Add that to your 13p per mile fuel and you get 18p per mile, near enough.

As a result of that you are making 12p per mile "margin."

Assuming an average speed of 30 mph (no idea if this is possible - almost certainly not around town but quite reasonable over a 10 mile radius between towns, for example) that means that you aren't even making minimum wage for yourself by delivering, even if you charge both outbound and return - and that's before deducting any VAT element. If not, and assuming that you can only do one trip before returning to base, you're making a loss at 30p per mile.

To break even and pay yourself minimum wage, you'd have to charge

36p per one way mile
32p margin
VAT on the 32p element - assuming that all other expenses are VAT inclusive and so that can be deducted - 6p
For a total of 74p per one way mile.
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Sun 16 Jan 2005 23:23
Running costs vs delivery charges - Badger
Pretend you're an MP and cop 57.7p per mile.
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