A customer who lives 90 miles from my store wanted free delivery on her purchase and thought I should 'throw it in' as part of the deal. I explained to her that I charge $ 115 per hour outbound on the truck and she thought that was too high ($ 172). Delivery is done as service and is not a profit center - so I try to do it at cost:
2 men on the truck @ $ 16 per hour each. 4 hour round trip = $ 128 in labor costs (higher once I add in matching SSN and Medicare contributions)
180 miles in 12 mpg truck: 15 gallons of fuel @ $ 4 per gallon = $ 60
Total cost without adding maintenance/insurance/wear and tear is $ 188 to me. So actually I am doing it below cost and need to raise my rates! I think a lot of folks don't realize how much it costs a store to do a delivery - even my local customers often say "But I"m right around the corner, just three miles away" and balk at the $ 65 minimum charge. By the time we load the furniture, strap it in, program the GPS, go on-site for delivery and return, that $ 65 is all used up.
Commercial insurance is brutal on a truck. While my delivery truck is only worth about $ 6,000 (its twelve years old), the annual liability insurance on it is $ 2,700, I don't carry comp and collision on it.
Delivery is a service and we are always glad to do it, but there is a very real cost to running a truck and two men on it and I try to do it at as reasonable a cost as possible
