Deferred-payment system elevates attraction of propane startup

August 9, 2013 By    

Jim Deiter Jr. looked into expanding his fuel oil delivery and HVAC service business into propane about 10 years ago, but he ventured into security systems at that time instead.

Deiter revisited propane again about three years ago, and his company, Deiter Bros., officially launched into it in May 2012. Deiter Bros. acquired GreenWorks Propane seven months later, giving it a more established propane customer base upon which it can build.

“GreenWorks was a fuel delivery company exclusively,” says Deiter, whose business is based in Bethlehem, Pa. “Plans are now underway to offer heating and cooling mechanical services to those customers.”

For years, Deiter Bros. recommended other propane retailers to customers as fuel suppliers for the systems it traditionally installed. In addition, many of its fuel oil customers were already using propane – and some of them were actually converting to propane from fuel oil.

Now, Deiter Bros. has the chance to benefit further from its existing customer relationships, and the company is giving Pennsylvanians a unique way to pay for their propane compared with other in-state retailers.

Paygo, a deferred-payment plan, allows customers to take a delivery of propane or heating oil and pay for it 30 days after they actually use it. Historically, Deiter Bros. offered two payment plans: pay within 10 days of a delivery to receive a discount or pay in full 30 days after receiving the fuel.

“As far as I know, we’re the only ones doing this in Pennsylvania,” Deiter says. “Our fuel oil customers – and I think the same goes for propane customers – are used to getting a delivery and having to pay for it all at once. If you get a 180-gallon delivery, you can be talking $600 or $700. That’s a big chunk of change, and it always seems to come at the wrong time.”

Customers are not charged to participate in Paygo, but Deiter Bros. offers the plan to select customers. Three hundred customers participated last year. This year, Deiter says, another 300 will participate starting June 1, and a line is forming to enroll in Paygo.

Deiter Bros. relies primarily on tank monitors to determine how much to bill Paygo customers. For customers without tank monitors, the company estimates the gallons consumed using heating degree-days as a guide, and it makes any necessary adjustments upon its next delivery.

TEAM: Pictured above, from left, Jim Deiter Sr., Jim Deiter Jr. and Jennifer Deiter Marks carry on the tradition of family-owned Deiter Bros.

LOCATION: Bethlehem, Pa.

FOUNDED: 1929

EMPLOYEES: 40, including five dedicated solely to propane

Customers: 1,000

PROPANE SALES: 800,000 annual gallons

ONLINE: www.dbrothers.com

Kevin Yanik

About the Author:

Kevin Yanik is the senior editor of LP Gas Magazine. Contact him at kyanik@northcoastmedia.net or 216-706-3724.

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