How to make delivery pay

By Wally Lynch Builders Express Inc. Dallas, Tx.

HOSE who have read my articles for the past two years should be aware that dealers maintaining delivery and delivery services for their customers are spending nominally 2090 of their daily operating costs on this activitY.

When a narrow specialized effort is this costly, it is necessary to look for favorable variations. There are four basic methods of compensating employees involved in delivery. Regardless of how people are compensated, vehicles used may be owned or leased.

The common methods of paying delivery personnel are:

Hourly WagqThis is by far the most popular method. It is easy to administer. It is usable no matter what size operation is involved and does not limit the use of drivers by management to vehicle operation only.

WSgs Plus_lncentives This method pays delivery personnel a regular hourly rate plus a unit bonus for each of their activities. Examples of this are $1 per stop for the driver and 30 a sheet for 12' sheet rock, 20 a sheet for 8' sheet rock and 50 a bundle for shingles.

Draw Agairst Commission Under this plan a percentage of the load value is paid to the driver. Generally different rates are established for different types of equipment. Normally they are based upon payload values of the various trucks utilized and the difficulty of the work. Dump trucks are the standard. Boom trucks are specialized and because of the low value of the materials detvered on this equipment and nature of the driver's responsibilities, a higher rate is established. Vans used to transport cabinets and millwork have the lowest rates because the payloads are much higher and easier to handle than ma- terials normally delivered on the other two types of trucks.

Contract Delivery Generally this "farms out" the delivery function to someone outside of the company. Seldom is it necessary for the company to lease or purchase trucks. Some contract delivery services also provide routing and dispatching services. The essential effect is to relieve the dealer of a capital outlay and management of a function "outside of merchandising."

User benefits of all four methods are summarized in the chart (right).

(l) @y To Administer Payroll preparation is well ingrained and within the capabilities of most dealers. Incentive, commission and contract delivery require measurement and performance monitoring by management.

(2) Flexible Use Ofleopk People paid on an hourly basis can be moved around without affecting their income. People on incentives and commissions or under contract resist movement because it might reduce their earnings.

(3) Usable At Any Volume LevelFor all practical purposes a dealer must