Is a Bulk Seed System Worth the Investment?
Is a Bulk Seed System Worth the Investment?
When considering upgrading to a bulk seed system, the number one question is:
How long will it take for this system to pay for itself?
It’s a tricky question, since no bulk setup is the same. One system might require a super structure. Another setup might need a continuous flow system with an LPV treater. Or, you might be fine with a smaller batch system and a couple of bulk bins.
So before deciding if upgrading to a bulk seed system is worth the investment, you have to figure out what exactly you need first. With 100+ combined years in the treating industry, UAS is ripe with knowledge on bulk seed systems. We’ll assess your current situation and help you determine the best route to go.
Once you have that decided, you can do some simple calculations to help give you a ballpark on when your system will start paying for itself. You’ll need to determine:
Estimated cost of treating equipment
Number of units you expect to treat
Seed treatment costs
Selling price
Profit per unit and total profit per season
Take a look at the example below for further clarification.
BULK SEED SYSTEM ROI EXAMPLE
ESTIMATED COST OF TREATING EQUIPMENT
First, determine the estimated cost of your treating equipment—including the treater, conveyors, pump stands, bins, hoppers and any other equipment. As an example, let’s say that the estimated cost is $100,000.
NUMBER OF UNITS TO BE TREATED
Next, determine the average number of units you’ll need to treat in one season. Let’s say that’s 12,000 units.
SEED TREATMENT COSTS
Now, determine how much you’ll spend on treatment, inoculants, and any other chemistry. UAS offers incredibly competitive pricing on all of our seed treatment products. So let’s assume you purchase treatment and inoculant from UAS for around $6.50 per unit.
SELLING PRICE & PROFIT PER UNIT
Once you have your estimated total cost per unit, determine how much you plan on selling your treated seeds for. As an example, let’s say you sell it for $12.50 per unit. That would give you a profit of $6 per unit. Multiply that by 12,000 units, and you get $72,000 in profit for one season.
YEARS TO BREAK EVEN
When you take your total cost ($100,000) divided by your total profit ($72,000), you’ll get a gauge on the number of years it will take to pay off your bulk seed system. In this case, that equates to roughly 1.4 years.
NOTE: There are a variety of factors that may impact these estimates. Year over year, treatment costs and selling prices may fluctuate. Or, you may have more customers 5 years from now than today, so you may end up treating more units each season. So keep that in mind.
UAS ROI CALCULATOR
Because every system is different, we put together an ROI calculator that you can use to plug in your own numbers. Hit the button below to download it.
For more information on bulk seed systems, check out the links below. And call 888-402-4787 for any questions you may have.