Business

The effect of gas prices

Fluctuating gas prices have affected Shannon Griggs — and not just as a regular motorist.

Prices also hit him hard as a Columbus-based franchise owner of Snap-on — a tool company that sells hand and power tools, diagnostics software, shop equipment and more to vehicle manufacturers, dealerships and repair centers.

Griggs' job requires him to travel to these places to sell his wares and collects payments.

"I'm pretty much a route salesperson," he said. "I drive to anybody who uses tools for a living."

On Monday, AAA's current recorded prices for Columbus show regular unleaded gasoline selling at an average price of $2.861 per gallon. That is higher than last year's average of $2.782, but lower than the highest recorded price of $3.074 on Sept. 4, 2005.

Diesel gas — which Griggs uses — had an average price of $2.836, lower than last year's $2.897 as well as the highest AAA recorded price — $3.274 on Oct. 7, 2005.

"There's no question (high gas prices) affect consumers, but small business owners are especially hurt because they are in a very precarious position," said Gregg Laskoski, spokesman for AAA Auto Club South. "They have to determine how long they can absorb costs before those increased costs are shared and passed along to their consumers."

And at a number of businesses, passing along the costs to customers may be the last thing owners would want to do, he said.

Effects on business

Griggs said this "absolutely" takes a toll on his business.

"It's less profit that's involved," he said.

Travelling plays a significant role in his franchise. Griggs covers the Columbus, Opelika, Ala., Auburn, Ala., and Phenix City areas and driving takes up 25 to 40 percent of his time each day.

His furthest client is in Lafayette, Ala., which is about 50 miles from Columbus.

These trips cost him about $300 a week to fill up his 30-foot truck's 150-gallon dual tank with diesel fuel. With the current average gas price, Griggs said he gets about seven miles to the gallon.

And he feels the pinch not just when he drives his truck. When Griggs needs to send tools to some of his vendors, he gets slapped with fuel surcharges.

"It's tough," he said. "But then again, if diesel was $10 a gallon, I'd have to pay for it for the business that I do."

To soften the blow, Griggs has cut back on personal expenses — namely, dinners out with his wife and other entertainment.

Cutting back on personal expenses is better than cutting out existing customers who are a far ways out, he said.

"Once you build a rapport with them, you've got to keep coming back every week," he said.

Offsetting costs

Two Men and a Truck franchise owner Will Dillon is facing similar gas-price woes.

Whether gas prices increase or decrease, the moving company cannot adjust what they charge customers accordingly.In Georgia, moving company rates are regulated by the state for household moving jobs within state lines.

Known as the Maximum Rate Tariff, the law limits what a moving company can charge customers, depending on a number of factors: the number of miles travelled, workers involved, hours worked and more.

Dillon said much of their business is local — they stay within a 55-mile radius — so company movers aren't on the road for a large amount of time.

For longer trips into other unregulated states, such as Alabama, they can factor in fuel costs.

The franchise has five 26-foot straight trucks, which take about $250 each to fill every week and a half.

Although gas prices have gradually dropped in the past few weeks, Dillon said the company hasn't really seen much relief."They're still high as hell," Dillon said.

Lower gas costs just balance out the higher costs they paid in previous months, he said.

To offset costs, the company has been looking to generate more revenue with more pack jobs and box sales."We're not going to let this slow us down," Dillon said.

For businesses that depend on travel, Laskoski recommends applying for a credit card that offers rebates on gas purchases.AAA's Visa card, for example, credits users with a 5-percent rebate of on charges for gas.

Credit card comparison Web site CreditCards.com also lists six different credit cards — from the Discover Open Road Card to the BP Visa Rewards Card — that offer gas rewards.

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