Another example (and perhaps I think of long routes and not day routes and that's why it's confusing). I am on a route right now that has incredibly high expenses. I would guess my ratio would be somewhere around 1.5:1. I have a route that I do quarterly that has a much higher ratio, probably 3:1 or more. My profit for this trip will be more than twice and probably closer to 3x per week than the quarterly one. Yet according to the ratio theory that one is the better route.

OK, you were a banking and finance major. My degree was in economics with a major in marketing and perhaps that is where our approach differs.

Let me take your example of 4 to 1 yielding $100 and 2 to 1 yielding $150. With my formula 4 to 1 will yield $100 and require a trip of 50 miles and expenses of $25. Net profit = $75. Same formula 2 to 1 will yield $150 and require a trip of 150 miles and expenses of $75. Net profit = $75.

Which would you prefer?







%75

You are backing out the mileage twice in those assumptions. $100 in profit is $100 in profit, not $75. $150 in profit is $150 in profit, not $75.

Now, let's assume that $100 in profit took you 4 hours and the $150 in profit took you 6. They're both $25 an hour and I'd rather have $150 than $100 so I'll work those 2 extra hours.

Or, let's assume that $100 in profit took you 4 hours and the $150 in profit took you 5. Well, not only is $150 more money but $30 an hour is more money than $20 an hour.

But, if the $100 in profit took you 4 hours and the $150 took you 8 well now there's a bit of a question. I'd look at that extra 4 hours and think hrm that's only $12.50 an hour and I'm not gonna bother.

I suppose your theory would work......if you only ever did one type of shop and your only expense was mileage. That's rare in my world though.

It seems your world and mine are a bit different. I base my formula on net profit not gross profit. Hourly pay is a totally different subject that I will not get into. It works for me and I am sure you are very successful with your business plan. I think the important thing is that we both have a plan.

So you're basing it on total pay? I just went back and looked at my months this year.

My total fees divided by my total expenses for each month ranged from 1.27 to 3.89. The 1.27 was indeed a bad month, but it wasn't my worst month this year. That month had a ratio of 2.52. Yet profit was half. My best month (3.89) is this month. Yet there are 2 months that have lower expense ratios (another 2.52 and 2.78) that were better. One to the tune of $2k better than this month. And I would guess I worked about the same number of hours for those 3 best months.

@jmitw wrote:

a buck a mile is outrageous..on a highway it takes a minute to drive a mile, in local suburban traffic 3 minutes..while you could include your time in the fee...that is too much

That depends upon where you live. A lot of places have toll roads, gridlock traffic, and other factors that increase the price. Driving across the plains of Nebraska at 80 MPH on a breezy afternoon is a lot different than attempting to drive I-66 during rush hour.

i dont get why people are so bent out of shape over what "formula" to use to decide how much to ask. OP, the formula is pretty simple. what number would make the task worth your while. that number is going to vary person to person. no one is right or wrong. dont let anyone make you feel bad for asking too much. if the MSC accepts your requests its obviously worth it to them. they want to get the shop done for the lowest possible amount, obviously the lower they pay you the more they make. relationships are great with the schedulers but they understand good shoppers dont come cheap. i havent been doing this long but from my personal experience, for what its worth, the schedulers i work with know i dont come cheap and i do good work. that is worth a premium to them. unless its a food shop to somewhere i like eating i let it sit till they bonus it up or call or email asking what its going to take to get it done. just my 1 cent

For a new mystery shopper, I think it is quite useful to use cents per mile as a basis for giving quick offers to schedulers while under pressure. One simple calculation and you don't have to worry about a complicated formula. Later, with experience, you will want to use many other factors, but cents per mile is a good place to start. (If you shop in a metro area with bad traffic, cents per mile will not work for obvious reasons.)

For me, anywhere from 66 cents to $1 per mile is reasonable, depending on the difficulty of the shop and how badly I want the work. For the calculation, I considered the entire fee (base rate + bonus.) So, for a relatively easy shop 45 miles away, I would have asked for a total fee of at least $60 (90 miles x $0.66). That rate covers vehicle costs; other overhead such as printing; self-employments taxes; and time spent preparing, driving, doing the shop, and reporting. I also try like crazy to add at least one more shop to the trip.

For most shops, schedulers won't go for the $60. But some will, and you will never find out until you ask and stick to your guns. For those that refuse, you at least get a feel for your local market prices. Later, you can try to plan a route in the area, and then proactively send the scheduler a lower offer,

The other posters have offered excellent advice. Their methods of coming up with their numbers may be different, but they have determined what works best for them and I suspect the final results are often similar. What works best for you in the long run depends on your own circumstances.

@indianyooper wrote:

i dont get why people are so bent out of shape over what "formula" to use to decide how much to ask. OP, the formula is pretty simple. what number would make the task worth your while. that number is going to vary person to person. no one is right or wrong. dont let anyone make you feel bad for asking too much.


I think people use a formula or plan to be consistent and equitable in running their business rather than just "winging it". My plan obviously differs from others but without one you are just wandering aimlessly and putting you business at risk.

Your formula seems to be no formula at all. In fact, a method to determine what number would make the task worthwhile is what the OP was asking. And he wasn't concerned about asking too much. He was concerned about not getting enough.

I agree with Jake. And just to clarify, Jake and I were not getting bent out of shape over formulas in case you were referring to our discussion. He uses a formula that is vastly different from mine. He's mentioned it several times and I have always been curious his reasoning for using it. I don't think either of us were getting bent out of shape? Discussion is how we learn new things!

I'm in total agreement that the actual method is not as important as simply having one.

- i was simply applying okhams razor to the problem at hand.
- why do a job for $1 when you can do it for $2 ... just to be equitable and consistent? no business sense there.
- my using the term "bent out of shape" was just rhetorical. not specific to anyone. honest.

While I agree that simplifying a problem is often best, I think that "what number would make the task worth your while" is attempting to over-simplify and doesn't provide a solution.

@LIJake wrote:

While I agree that simplifying a problem is often best, I think that "what number would make the task worth your while" is attempting to over-simplify and doesn't provide a solution.

im curious as to why not?

Well, jgoodwin said he "didn't have a clue"as to the amount to ask for when the scheduler asked him to name his price. He asked if other shoppers have a standard rate. I suspect that if he knew what number would make the task worthwhile he would have asked for it. How does your simplified solution help him?

New shoppers have no frame of reference when starting this business. Many have never owned a business at all. If you decided to become a plumber without ever having hired or even spoken to a plumber, would you have any idea what to charge so that you cover your expenses and make a profit all while not pricing yourself out of the market?

@LIJake wrote:

How does your simplified solution help him?

I think the complex calculations involving mileage and tax and whatever else would lead to recouping expense...my simplified solution factors in satisfaction and profit and capitalism...Lets say a shop is X miles away and takes Y hours round trip and the shop itself takes Z hours...you are saying that aX+bY+cZ = FEE.[ofcourse you can add a whole bunch of factors to this]. I think that would just be a break even.
Let me ask you a hypothetical...Lets say there is a shop which is 19 miles from my house in the town I go to work or shop or visit the inlaws etc 7 days a week. The shop itself takes 30 minutes. The report takes another 30 mins. How much should I or any shopper ask for this shop? Be detailed if you could please.

P.S
Im not trying to prove anyone right or wrong...Just like this discussion

Please just answer my question.

your question being how does my simplified solution help him/her? Keeps the thought process simple instead of making him feel like he needs a post doc in actuarial science. Now, your turn.

I'm not going to go back and forth with you. It's not worth my time. The fact is you have not provided a solution nor have you resolved his problem. This may be theoretical to you but to me it is a business. And that is a concept I don't think you can grasp.

what makes you think you have done either of those? you have an idea, I have mine. Dont be sour that mine is better than yours Just because it is a business to you doesnt mean your ideas are better or more accurate than any others.BUT yes, delusion is a concept I know I cant grasp.

I'm seriously going to regret this.....

You did not use Occam's (or Ockham's, but not Okham's) Razor. That is mostly a scientific mechanism that originated around two competing models dealing with computing movements of stellar bodies, one based on the sun and one based on earth. They both worked but the one based on the sun was easier.

In this particular instance using Occam's Razor would be doing multiple calculations and finding that Jake's ratio and my more complex calculation come up with the same answer so accordingly using his is simpler and should be used.

That is not what you did. What you did (as far as I can tell) is say ehhh screw it what do I feel like asking?

Also to answer your other question I would charge about $10 + my hourly rate for 2 hours. Unless it was a job I enjoyed and I really was passing right by it and then I would only ask for 1 hour.

I multiply mileage by the current IRS rate, which is currently $0.54 per mile. Sometimes I just multiply by $1 per one-way mile and add 10% more, so I don't think $1 per mile is outrageous if it is one way mileage. Then, I calculate anticipated travel time and multiply by $20 per hour, and then I add highway and bridge tolls. I just did a calculation inspired by a comment above, and realized that if I do indeed charge $1 for every mile, that I would on average come out at about the same overall payment. 60 miles one way would be 120 miles round trip = $120. 120 miles at $0.54/mile = 64.80 if it took me about two hours of driving at 60 mph. My old way, 2 x $20 = $40. The quick and easy way would get me $35.20. Where this falls apart is that I can't average 60 mph in any direction I go. And I would still need to add highway and bridge tolls. So, maybe my quick formula should be $2 per one-way mile plus 25%. I will have to ponder this for awhile.

At one MSC, there are schedulers who call me and understand that if they are offering me $20 and it involves a trip across the Delaware River, that it is going to cost me $5 for the toll bridge. Other schedulers at the same MSC have told me that I should "get a card". I tell them that I have an EZ-Pass, and all that does is save me time paying the toll, but does not reduce the amount unless I go across the bridge at least 18 times a month (I don't) and that the NJ Turnpike discounts do not apply because I have an EZ-Pass issued in PA. They just don't understand. From their perspective, everything apparently should work just like it does in the Mid-Central States. But it doesn't. BTW, this MSC always tells me the distance as if I were a bird.

myst4au,
I think those of us who consider this a business have our own method of determining fair pay. And as bgriffin said a day trip has different parameters than an extended multi state trip. I do nothing but day trips. And I agree, there are MSC's that think we are crows. I was recently offered a trip to CT which is 15 miles directly north of me but the problem is that the LI sound is between the two states and the proposed Oyster Bay to Greenwich bridge was shot down years ago. The proposed trip would actually be 128 miles with a $16 and $1.75 toll involved.

I felt the OP was looking for a quick way to give the scheduler an answer and a buck a mile does that. (That, by the way, is an example of what the loose definition of Occam's razor is). When I plot out a route I fill in the blanks on a formula (much like an algebraic formula) that I have in a file on my computer. And by filling in the estimated travel time and time at each shop the hourly pay automatically is shown.

I know I have mentioned income/expense ratio several times in the past but it works for me and it is what keeps my business projections on track. A buck a mile is a 2 to 1 ratio and it is the minimum I will accept. I'm not suggesting that my method is best or that it will work for everyone in every instance but as I said, it works for me.