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Author Topic: Charging a premium  (Read 2806 times)

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Offline PAmizerman

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Re: Charging a premium
« Reply #20 on: February 10, 2018, 08:09:37 PM »
Should I charge a premium?    Well I infer you have less of the wide 10 and 12 inch boards than medium or narrow boards and I infer people want the wider boards more than the medium or narrow boards.   Simple supply and demand.   Seems only logical to charge more.  I dont understand why you would tie yourself in knots trying to justify a higher price.   

Perhaps a more precise question is,  "How much of a premium are the wide boards worth? and possibly at which size do you start charging a premium.
My only concern with a increase is because there are so many Mills out there and it can be a pretty cut throat business. I don't want to price myself out of my local market. I guess I just have to justify it behind my quality and speed of which I supply the lumber. I am self employed and have several options of income at this point but I'm trying to go completely full time sawing.  Picked up another job today. All 1x10.  As long as I can get the logs.
Thanks for all the input. I really appreciate it.
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Offline WV Sawmiller

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Re: Charging a premium
« Reply #21 on: February 10, 2018, 08:24:59 PM »
PA,

   I would not worry about pricing yourself out of the local market. Just go ahead and let the competition drive themselves to bankruptcy selling below production costs and you will be the only mill standing before long.
Howard Green
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Offline Southside logger

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Re: Charging a premium
« Reply #22 on: February 10, 2018, 09:08:04 PM »
Just last night I had a guy e-mail me looking for oak lumber.  I gave him the price, I get back a snarky e-mail telling me he paid half that at another mill, in doing so he adds in all sorts of optional language to describe my price. My response was that he "should go back to that mill".  Those types are everywhere.
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Online Brucer

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Re: Charging a premium
« Reply #23 on: February 11, 2018, 02:07:37 AM »
... do you have different price points for lumber based on width and how much of a headache does it cause you.

Yes. My main product is custom-sawn timbers, typically 8x8 and larger. 1" side lumber is an inevitable byproduct so I saw it into standard sizes and stack and sticker it. The widest side lumber I will normally get from a timber is 8". When someone asks for 1x10, they are basically asking me to saw material from the part of the log that would make a much more valuable timber.

So ... my price for 1x nearly doubles when the width is above 8". Your circumstances may vary depending on what you normally saw.

... My only concern with a increase is because there are so many Mills out there and it can be a pretty cut throat business. ...

That's why I have never tried to compete on price. I cut a quality product and have a set of prices that will let me earn enough to make it worthwhile to stay in business. The price for a given size reflects the cost of the wood and the amount of time I have to spend sawing it.

The only customers I've lost because of price weren't worth the time and trouble of dealing with.

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Offline longtime lurker

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Re: Charging a premium
« Reply #24 on: February 11, 2018, 06:00:14 AM »
I charge a premium for width... it reflects the yield of the log and the grade of the log required to cut it, so I expect my customer to pay more for that product. Its all the same as length... 8' is easy, but 16's are harder and by the time you get past 24' they're a PITA...

What does the nearest box store/timber merchant charge? Same flat rate per BF for 3" as 12" wide? I'll bet they dont.

Worrying about what the guy down the road is doing is a real bad move: I'm the dearest mill to buy off in a hundred miles... and the busiest, and the fastest expanding. While they're worrying about me I'm worrying about punching out orders on spec and on time. That doesnt mean I'm way out the ballpark on price but I dont discount for nothing or no-one. I'll starve before I cut my own throat selling myself short.

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Offline kenfrommaine

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Re: Charging a premium
« Reply #25 on: February 11, 2018, 07:55:22 AM »
Everytime I have purchased lumber the price has always been higher for anything 10" and over.

Offline brianJ

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Re: Charging a premium
« Reply #26 on: February 11, 2018, 08:46:32 AM »
Picked up another job today. All 1x10.  As long as I can get the logs.

What are you leaving unsaid?    "Once I figure out where to get these better logs they will cost me more"   Of course that is just supply and demand.   

@Brucer   Nearly doubles for more than 8"    Yikes I would never had guessed it was that high a jump. 

Offline thecfarm

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Re: Charging a premium
« Reply #27 on: February 11, 2018, 09:32:39 AM »
My Old Saying,I can make more money digging rocks. Than my FIL says,there no money in digging rocks. Catching on pretty quick,is my next remark.  ;)
You have to charge enough to make money,cut and dry. And I am not talking making only pennies either.
I can make more money digging rocks.  :D
I sawed out a horse run in for me. Took good size logs for 10 inch lumber. I was cutting the trees on my own land. I used the smaller boards for the roof. Than I sawed out 2x4's.
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Offline scully

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Re: Charging a premium
« Reply #28 on: February 11, 2018, 09:35:52 AM »
One of my first jobs was an order for 10" wide hemlock . I was so excited right up until I saw my over run pile growing faster than my order pile .  Then the guy didn't take all of the 10" wide stuff ! So yes I would charge more ! And I do . Not that anyone is lining up out my drive way to buy lumber but I am not a stock yard . I have learned over a few short years that pricing has to be in line with the job . Normal run stuff normal pricing , over size and specific order stuff commands a premium . I much prefer the portable situations were I just go and mill the customers logs into what they want and leave them with their over run . I tend to have good luck with the small amounts of over run on my own stuff ,but, like I said I am not a lumber yard .
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Re: Charging a premium
« Reply #29 on: February 11, 2018, 01:04:36 PM »
Brian, the reason it nearly doubles is that a wane-free 1x10 comes off the side of what could be a much more valuable timber. So I charge the same $/BF for the 1x10 as I would for a 6x10 or an 8x10.

Keep in mind that my main product is not boards or lumber, it's timbers. When I quote a price for 1x10 or 1x12 the customers get that glassy-eyed look :o, but when I explain why it costs so much, they nearly always understand.

What you charge for anything depends on your personal circumstances. What do raw materials cost, what kind of equipment do you own, what's your market, and so on. But at the end of the day you have to make money or you're not really a business.
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Offline Dave Shepard

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Re: Charging a premium
« Reply #30 on: February 11, 2018, 01:49:16 PM »
 My prices are always negotiable. I will always accept more than I'm asking.

A friend of mine would get people like that when bidding plumbing work. He'd tell them to hire the other guy quick before he changed his mind.

Just last night I had a guy e-mail me looking for oak lumber.  I gave him the price, I get back a snarky e-mail telling me he paid half that at another mill, in doing so he adds in all sorts of optional language to describe my price. My response was that he "should go back to that mill".  Those types are everywhere.
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Offline Mt406

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Re: Charging a premium
« Reply #31 on: February 12, 2018, 12:05:33 AM »
I was standing out in my log yard today looking at the load of high dollar logs.
And though about this thread and took some pics.
In my area I don't get a lot of big trees or very stearate so when I get a call for wide or long I have to pay a premium.
Hears the difference between 85/ton and 120/ton logs.
 

  
These are the 85/ton only 30% were able to make 12 in wide wood
 

  

 
These are the 120/ton
 

 
65/ton lodge pole pine

For my operation i have to charge more for 10in and wider and longer than 16 foot.
I know what my costs are and I dont play price games.
And when thay try to say the guy down the road charges less I tell them thay better buy from them.

Scott

Offline Ianab

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Re: Charging a premium
« Reply #32 on: February 12, 2018, 12:25:03 AM »
That's a good example. If you have to pay a premium for the better logs, then you need to charge a premium for the better end product as well.
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Offline Stuart Caruk

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Re: Charging a premium
« Reply #33 on: February 12, 2018, 02:09:27 AM »
It's all in your log supply I guess. I rarely stick anything on my mill under 24" diameter. Typically the logs are almost to much to fit on the mill. The mills here won't take anything over 32" so I get a lot of huge butt cuts for cheap. I love the look of sawn lumber with few if any knots.

The side lumber is a byproduct for the beams I want. I'm just now trying to figure an easy way to make handling it profitable.
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Offline Peter Drouin

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Re: Charging a premium
« Reply #34 on: February 12, 2018, 05:44:47 AM »
Mt406, Was the Pine all stained when it came in?
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Offline petefrom bearswamp

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Re: Charging a premium
« Reply #35 on: February 12, 2018, 08:45:20 AM »
$.05 more for 10 and up.
I have too much side lumber some from 2-3 yrs ago.
When you deal with quite a lot shaky Hemlock as I do you make a lot of narrow stuff even from big logs.
I will however be sawing all WP this spring.
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Re: Charging a premium
« Reply #36 on: February 12, 2018, 09:30:02 AM »
Yes Peter
99% of my pine is dead standing at least the lodge pole Its beetle kill.
Pine beetle is totally out of control here some areas the forest is 90% dead.
I don't get much ponderosa pine hear I have a bout 3500 bf for my own siding to be cut it had some blue when I got it.
It now has a lot. My wife likes the look so it will work.

Scott

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Re: Charging a premium
« Reply #37 on: February 12, 2018, 09:42:47 AM »
Stuart
It is in the log supply.
Mills are the same here they will only take 30 inch butts.
If the logger get a bigger tree they dump the butt in the slash pile.
most forester wont mark big trees they leave them for wildlife trees
And they blow down in the first big storm.
I set my operation up to be able to handle the bigger logs.
I have a swing blade that doesn't get used much.
 
Scott

Offline starmac

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Re: Charging a premium
« Reply #38 on: February 12, 2018, 02:30:58 PM »
The sawmill here can only handle up to 25" butts, but they take bigger without docking us.
They cut them for firewood till they get down to 25", what a shame.
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