Spreadsheet for Comparing Gas Costs

By Blaster (***)

Date 08-06-2014 00:26

Thanks for sharing.

One of the best things I ever did was go to all owner bottles. I have about 60 bottles in the shop so it wasn't cheap, but I am finally switched over to all owner bottles. Just had the last 3 rentals picked up this morning. Now what used to go to rental charges I can spend on supplies or equipment.

My gosh those bottles fees are horrendous... $4 per month from the low bidder and $9.XX from the higher - ouch! My last two vendors were at about $2.50 and $4.95 per bottle/month.

We put the gas out to bid every summer. We use previous year gas use totals as estimates. These may be available from the current vendor.

If vendors are apt to change every year or two it makes life so much easier if you own your own bottles. We had to switch twice in the last two years and it was a huge pain. Plus I no longer have to factor in rental fees to compare gas costs per vendor.

By ssbn727 (*****)

Date 08-06-2014 19:37

Ah yes!

If I remember correctly, the correct term was or still is : "Demurage" or something to that effect... You did the right thing Blaster... Too many schools short change themselves by not switching over to owner bottles by fearing the initial cost to do so when they'll end up paying the costs back for doing so just from the savings alone and can write off the initial purchases as capital equipment all within the 1st 2 or 3 years...

I always wondered why more people wouldn't have thought about switching over as well when I was working for a welding supply company back in NYC many moons ago and that was around the time when the newer aluminum cylinders were starting to circulate which by now should be way less expensive compared to back in those wild and wonderful eighties! :lol:

Good move Blaster.

Respectfully,
Henry

By Lawrence (*****)

Date 08-07-2014 14:47

'Liquid and mixers

A few owned bottles as backup.

By ssbn727 (*****)

Date 08-07-2014 21:50

That's the way to go Lar!

By pipewelder_1999 (****)

Date 08-09-2014 20:16

So what is a good source for buying bottles outright ? Not sure about the vendor up here but that same vendor in Mississippi indicated they didn't sell them.

By Blaster (***)

Date 08-11-2014 03:59

I never heard of a welding supply outfit that didn't sell cylinders. I have bought from Airgas, Praxair, and several smaller vendors.

By pipewelder_1999 (****)

Date 08-11-2014 11:08

I only tried from one supplier when I was in Mississippi and they indicated they only rented bottles and sold gas. It was one of the ones you mentioned but I will check it out here.

Thanks

Gerald

By Plasma56 (**)

Date 08-13-2014 07:21

Hi Gerald,

I as well have COP (Customer owned product) cylinders.
The choice was due to to the demurge or cylinder rental fees and not going through the gas useage. I should mention the cost of cylinder retesting and valve replacement, pick up delivery expenses, as well delays in refilling should be factored expenses in making the choice. My suppliers say they are required to retest and revalve every 5 years. I have 8 cylinders.

Not activley running a business, I have found this to be economical for me, but at times an inconvienence for the reasons mentioned. It also explains why I have 8 cylinders.

From a business perspective, it doesn't make much sense however does it? Yes, cylinder purchase and ownership means a depreciating asset, but you still have the cost originally attached to operating and that is gas cost, delivery and change over labour. The best way to save is buy in bulk or the largest cylinder volume possible, to get a cheaper price on the gas, reducing delivery and change over labor.
You still have to survive to year end to claim a tax credit however. Talk to an accountant but my guess is you will have more money at the end of the year by forgoing the purchase of your own cylinders.

It does seem like a way to keep the operationing expences lower if gas usage cost are low to begin with or will remain low. With just a brief understanding of your operation, this could be a good option worth concidering and shouldn't be ruled out. You know best your market, business model and expectations for earnings.

I might mention, factoring in cylinder storage, floor space and expenses mentioned, the captial investment maybe should be bulk cylinders and a manifold system to the stations?

Well good luck there.

By pipewelder_1999 (****)

Date 08-13-2014 10:12

Looks like the 2 suppliers here in town won't sell cylinders outright. The largest cylinder they will refill that is customer owned is an 80. I think they have figured out that it's better to rent items out that essentially last forever.

Gerald

By Blaster (***)

Date 08-13-2014 14:19

Owner cylinders may last forever, as has been my experience the suppliers just continually swap them out, charging only for the gas. So they keep up with and pay the cost for periodic retesting and so forth. They don't actually refill the owner's specific bottles and then return them.

I considered bulk cylinders and manifolds but dismissed the idea as in a school I think it is important for the students to become accustomed to changing and handle gas bottles on a regular basis. For this reason the biggest bottles I use are 300s for argon and c25, 200s for oxygen, 50 pound for CO2, and 130s for acetylene. We use a similar size propylene gas cylinder too - not sure the size rating. The 130 size acetylenes are nice as they serve as a training aid for having the guys figure out adequate cylinder size to run a certain size rose bud.

By pipewelder_1999 (****)

Date 08-15-2014 13:51

Thanks to all for the info.