Flat Fee vs Price Per Minute vs Price Per Pound
When it comes to paper shredding services there are often a few different pricing models that you’ll be able to choose from. In this article we’ll take you through the differences between flat fee, price per minute and price per pound pricing models to help you decide which may be best for you. If you’d like to get a quote from us today you can do so by clicking here now!
|Great for high volume users||Sometimes not best for low volume users|
|Good for medium volume users||Can get very pricey with higher volumes, invoices can be difficult to read|
|Great for low volume users||Costly when shredding high volumes|
Pricing Method Example Comparison:
In this example we are going to compare the net cost to 3 different businesses using the 3 different shredding services pricing methods at normal market rates.
Company #1 = 5 employees that need to shred 25 pounds of paper a month
Company #2 = 50 employees that need to shred 250 pounds of paper a month
Company #3 = 500 employee that need to shred 2500 pounds of paper a month
Statistics from American Forest and Paper Association show that the average paper consumption in the US per capita is 700 pounds per year. That is about about 50 pounds of paper per month. For the example we have used a conservative estimate or 15 pounds per month per employee for the amount of paper that needs to be shredded.
For the calculations we have also assumed the price per minute operators are using equipment that shred at a rate of 1,000 pounds per hour or 16.6 pounds per minute^.
The three different pricing models are as follows.
Flat Fee: $95 per collection unit
Price Per Minute: $3.75 per minute
Price Per Pound: Less than 5lbs = $0.59 per lb, 6-10lbs = $0.49 per lb, 11lb or more = $0.39 per lb.
Here is what the monthly costs would look like for each company with each pricing model.
|# Of Employees||Pounds/Month||Flat Fee||Per Minute||Per Pound|
Flat Fee Paper Shredding Service Pricing:
Typical Cost: $95 per collection unit
Flat fee pricing is great for companies that are certain they’ll be in need of constant high volume shredding services. With flat fee pricing, you generally pay a rate per bin in your office; prices differ depending on size but $95 a month is a common average. For companies that know their bins will be consistently full a flat rate is a great option. The biggest drawback to flat fee pricing is that if your bins are not nearly as full as usual you’ll be paying the same flat rate for perhaps half of the work or less. If this is the case you may be better off choosing a price per pound or per minute.
Per Minute Paper Shredding Services Pricing:
General Cost: $3.75 per minute
Per minute pricing is exactly what it sounds like. Per minute pricing is good for companies that don’t have enough shredding needs to pay a flat rate, but also produce enough documents that paying per pound would be less efficient. Unfortunately, there are a lot of drawbacks to per minute pricing, particularly in how the billing method works. Companies and customers often find that invoices can be hard to read and understand, and it’s also fairly difficult to determine whether the billing is accurate, especially considering that most invoices will be rounded up. There’s also the risk of companies taking advantage of per minute pricing by using slower machines or being less productive in order to increase your bill. This pricing model is not very prevalent anymore in the market and you may find that there are no providers in your city that work on this pricing model.
Paper Shredding Price Per Pound:
General Cost: Less than 5lbs = $0.59 per lb, 6-10lbs = $0.49 per lb, 11lb or more = $0.39 per lb.
For those who have a low volume of material needing shredding services, this is probably the best option. Using the price per pound option means that no matter how long the services take you’ll only pay a flat rate for the amount shredded. Pricing for per pound service generally follows this rule: $.59 per pound for up to five pounds, $.49 per pound for six to ten pounds, and $.39 per pound for 11 pounds and above. If you choose this method your best option would be to hold off for as long as possible in order to get a discount for having a higher volume of paper.
So which is best for me?
It really depends on how much paper you’ll be producing for shredding each month. For any high volume users we would certainly suggest going with a flat fee. For low volume users we would recommend getting a quote from a flat fee, price per minute and price per pound supplier if you have suppliers of each type that will service your location. If you’d like to talk to somebody about which may be the best option for you feel free to contact us today!