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How is your lumber selling?

Started by Kelvin, July 04, 2007, 07:50:50 AM

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Kelvin

Man, either woodworkers really quit in the summer or michigan's economy is really tanking.  I know that its suppose to be depressed around here, and my cousin keeps saying we are going into a recession, but nobody is buying lumber here.  Not that they were flocking to the door before, but i'm starting to think about selling all the sawmill stuff again.  I can't sit on all this stuff, work so hard, and make so little without some idea that "word of mouth" is NOT getting around about what great lumber we have.  Man, the only market around here that wants our wood consistantly is the pallet guys who pay .35 a bd ft, though you have to even cut that bd ft in half for 1/2" slat tops and trim them to length, so i really they are paying about .20 a bd ft.  It seems i'm in a perfect storm in my hometown.  There is a giant veneer buyer taking all the premium stuff, so log prices are sky high.  Example= $3-$4 a bd ft for 25" white oak butt logs (yes in the log) and the local economy has tanked, if it ever was here. 

Boy i'd like to see all those piles of money that the sawmill manufactures have on their advertisements, makes me want to punch them when i see that.  They should say "Do you want to make less money than a dishwasher, and work twice as hard so you can be your own boss?"  This seems to be the actual market for someone with their own small mill.

I'm amazed at the pay schedule for sawmillers.  I've posted this before, but locally, to rent a ditch witch or a wood chipper you pay $60-$80 an hour on a daily rate.  As a knowledgeable, somewhat skilled sawmiller, i charge $50/hr and get less work than the woodchipper probably does.  I know that it takes time to establish clients, but man, i bought my sawmill about 4 years ago, and i have less work now than, then.  I'm sure this means i have to charge even less for my services to drum up the business, as word would be spreading if it seemed that i was a good bargin.  The last number of people who have seen some of my adds, or heard by word of mouth that i had furniture grade hardwood, have left without much, if anything purchased.  I constantly get these "looky loos"  They say "i'll buy more next time" after spending 2 hrs looking it over.  Never calling back.

I know this sounds like i'm personally in a funk, yet i've remained hopeful and am a good salesman when it comes to selling things in general.  I used to fix up houses for a living and made $20-$40 an hour with very limited capital investment other than the house purchase ($50k houses) and that was gone when sold.  I've spent about $80k on sawmilling equipment, always hoping the next piece of equipment would make me money.  LT-40 hydraulic mill, kubota loader tractor, crane truck and trailer, Nyle dry kiln, heavy shop equipment for processing, Barns.  All this depreciates and eats money in interest.  How much do you need to make a year to pay for it all?  Quite a bit more than the $9/hr dishwasher who has no overhead.  THe first quarter of this year i figured i made $8/hr sawmilling, and its gone downhill from there.
Its hard to figure when to call it quits.  I know i won't be able to pay off the equipment loans when i sell the stuff, so i will have to work to pay that back for awhile to start even.  Its a depressing thought to have to work so hard and not make headway.  Now i know what it  must be like for that "90% of resteraunts that don't make it the first 5 years".  Who would ever open a business like that.  Am i that dumb?

I guess i know quite a few local business people like me, who aren't making money here in central michigan.  A neighbor is a landscape architect, and says he worked the last season and only lost a few grand after equipment payments.  Can you imagine to work a whole year just to pay your loans and loose money?  I guess hes had a lot of seasons were he made quite a bit, and figures it evens out, but i don't like the idea.  I want to be the guy who loans money and makes it back no matter what.  Takes money to make money.  The rich stay rich and the poor get poorer right?  Now i see how that works.

Well, i wanted to post about how sawmilling sometimes goes, for people out there with that starry look in their eyes.  People like me who get into it without the right connections thinking quality workmanship and brute force can make you a market.  Its probably more about who you know than quality.  The only lumber i'm selling is going out of state through my internet sales.  This leads me to believe that it has to do with local crappy economy as well.

How is it with you guys out there?  Does this season seem particularly different than a few years ago?  I could wait if i thought it might get better, but i don't want to be oblivious to the signs that are hitting me in the head, saying "we don't care about local sawmilling, log recovery, craftsmanship"  Its hard not to be bitter about this and say "its just the economy"  The economy just ate up all the savings we had in home equity when we just sold our house.  I built a new house completly from scratch with my sawmill, hoping to reduce my debts so i can continue to loose money at sawmilling, but guess what?  The house i sold had lost 20% of its value from 3 years ago when i started my project, and the project didn't cost less either, so $50k slipped off the balance sheets, not in my favor, and i lost a lot of sweat equity i put into that house.  No ones fault, just the "economy"  I'm sure learning a lot of life lessons. 
Well, whats the word on the street?  How is the economy treating you guys?  Up?  Down?  Thanks for any input!
Kelvin

WH_Conley

Slower than a snail with the gout here to.

Most of the people here work out of county and are putting more money in the fuel tank, cuts into what they have to spend on 'extras'. Haven't sold but one cabin this year.
Bill

Ron Wenrich

From the commercial side, lumber sales are down and the prices have been depressed.  Remember how good hard maple was?  The market fell apart in the spring.  Remember how good red oak was?  That fell apart too.  Now its even getting into the veneer markets.  The only bright spot is walnut and white oak.

Our low grade continues to move well.  We're getting 36¢ for cants, without cutting them into boards.  I would suggest looking for a new market for low grade.  Ties are still moving well.

We don't cater to the local crowd.  It is too fickle of a market.  You have too much invested in high end lumber and there is too much of a chance for degrade.  Carrying costs will eat you up.  Then, you have to compete with the box stores that someone will pay a little extra, but make less trips.

If I was in your shoes, I would be looking at marketing to woodworking shops.  They are always looking for good quality wood and in smaller amounts.  You can afford to sell at a little lower price, because you are moving your money faster.  Its a niche that large mills have a hard time filling.
Never under estimate the power of stupid people in large groups.

bull

Things are slow here also...  Remember you are in an agricultural occupation and need to learn to roll w the punches and diversify.... Lumber alone isn't going to keep you going. Sometimes you need to pickup parttime work to get you through... I don't know your area etc... but check out what other things people need.... bedding for animals and plants... organic fertilizer"wood ash", compost, bark mulch,firewood "bagged or bulk", bird houses and dog houses, arts and craft wood, tomatoe stakes,grade stakes etc,you can make more money from your sawmill waste that the actuaul lumber sales.  I went from sawing 200,000 bfd per year to 50,000 bfd per year and have made a hell of alot more money with less lumber. Customers are not allowed to sort thru piles they are given what they ask for from the top of the pile down, if they don't like something when the get home they have the right to return it for money back, " not happening with a $3.00 2x4..... tractor work.. $50.00 per hour, move pile of dirt or stone for neighbors 1 hr minimum, rotary mowing and on and on ...... don't give up in five SHORT years, take a look at the bigger picture, life is a roller coaster get on and enjoy the ride - we have all gotten a sour stomach on a roller coaster and may have even lost our lunch but we keep going..... Take a couple days and go into the city and then a couple days at the mill, don't forget you are your own boss and can stop and smell the roses or the manure pile at your own risk, without someone breathing down your back.... GOOD LUCK

TexasTimbers

My demand has not decreased other than the wet weather makes people think the sawmill is shutdown so walk-ins are fewer. But not for economy reasons here anyway.

Of course, it's a good thing because I can't get logs right now. And that's a good thing too because I have been working on the house more often. :)
The oil is all in Texas, but the dipsticks are in D.C.

kderby

Kelvin,

Your note got referenced to WOODWEB already.  Your question and discussion deserves both forums.  I am in a very similar position. 

I am really caught by the phrase, "from user to dealer."  I did start this process as a wood user and I am trying to become a wood dealer.  I think I am special as I have a very select species as a focus.  I also have twenty thousand board feet stored in a shed.  It is not selling!

I told my self that I would decide in July if "this" was going to work.  Well, here is July and I am still limping along.  I still see opportunity.  Sales are not supporting that vision. 

I want to be a job maker and not a job taker.  I have gotten the phone calls and seen others that want into this business.  I have watched them fall down.  I know others that have been in the business for several years and then they crash.  This is  a tough business!   I recommend the book The E-myth to any one daring to dream about a business.  Have you read it?

We are far distant in miles but on a similar path.  I hope your outcome is a positive one.

Cheers

Kendall




Haytrader

I have always thought "value added" was the way to make a small sawmill work.
Sawing for x amount per hour or bd. ft. never appealed to me.  Surely you didn't believe the manufacturers ads? People come and go in any business. It is a fact of life.
We are in the process of remodeling and old house that sits next to our home into a nice woodshop. I posted in another thread about when do you know it is time to quit the corporate job about my wife being close. Well, she surprised me and is going to do it and work in the shop full time. Granted, I can make the living, so she has no stress in makeing it work, but I am confident it will work or I wouldn't invest $20k getting this shop set up.
Maybe you could market your wood by building things also. And if hardwood is not what sells, try different woods. Try going to the Vo Tech schools and high schools and sell them lumber for thier projects. Take a couple days off and go look at what sells. Get out of the normal routine and sometimes you can see better. If that area is so bad, move. Contact that guy on the other forum and sell him some equipment. Reduce your debt. Trade something you don't want or need for something you need or want. I do it all the time. This week I traded an old truck, an old loader, a horse, and a stock trailer for a nice one ton truck.
Bottom line is.........if it ain't working, don't keep doing it. Change is the key word. Be willing to do things differently. If people want wood you have but have no money, ask them what they have to trade. Always trade for things on a low value, just like a car dealer does when you trade one in. Leave youself some profit.
Keep you chin up and you mind and eyes open.  Best of luck.
Haytrader

gharlan

but i don't want to be oblivious to the signs that are hitting me in the head, saying "we don't care about local sawmilling, log recovery, craftsmanship"     

Sorry for the frustration Kelvin but I think you may of hit the nail on the head with this statement. We seem to live in the Walmart era. We all want something for nothing, or to feel like we are getting "a deal". People do not seem to care about craftsmanship. They just want instant gratification
I have built houses for the last 27ish years. I have recently quit out of the same frustrations you are experiencing. In the custom homes everyone thinks everything should be included no matter what the allowance is. Its like a house is a buffet and it is all you want at one price. Keeping up with all the cost overruns and paperwork is a major job. And collecting is nearly impossible. With the specs I tended to be a perfectionist who loaded them to sell with extras. But if they sat a few months the bank made out quite well ,and do not even get me going on realtor fees. I get plenty of people that are having a house built that need to talk to me and ask questions. It usually seems they went with a builder whose bottom line was 30 to 50 thousand cheaper than say mine. But when they go and start looking for their selections they discover that they can not get anything for what is allowed. This generally cost them much more than my bid when finished. Yet these guys seem to be the ones that do the best.

I have come to believe that it is not hard work that will make it for you in business. You have to have the stomach to exploit any availability that you see. I guess it is the old saying it is easier to ask forgiveness than permission.

Bibbyman

Our custom sawing requests and local lumber sales have been slow for the last six months.  We're still getting orders from our regular customers.  And because we're having so much trouble getting logs,  we've only been able to keep our steady customers happy.   But we could saw twice as much as we have been. 

Traditionally, it's been slow in the summer months with the farmers working in the fields and others taking vacations.  Also, the heat keeps a lot of people from working on outdoor projects.

Fortunately,  we've been able to "ride it out".  In fact,  the slow down has given us time to take a short vacation and do some repair work on the house.

We've got with another logger last Friday and we have hopes of getting stocked up with logs.  (In fact, he just called and will be down Friday morning with a load.)

We sent a load of oak flooring lumber off Friday a week ago.  The prices are down but they graded the load fair and we got as good as we expected. 

We've got enough logs to start making ties and grade lumber again so we could keep as busy as we want or need to work.  It's kind of like eating baloney on white bread.  It'll keep you from starving.

Looks to me like there are people out there with money.  I keep seeing them go by with new 4x4 PU pulling boats, Skidoos, and other toys.  There is a lot of construction going on.

Wood-Mizer LT40HDE25 Super 25hp 3ph with Command Control and Accuset.
Sawing since '94

Brad_S.

Most of my income is derived from sawing others logs at their site. Typically in July, there is a 3 week backlog. Right now, I have one job booked for this whole month. I'm using the time to clean up the stray logs in the log yard and deal with things that have gone unattended for too long already. If GregS hadn't gone out and gotten a real job and handed me a nice little timberframe job he had backed up, things would look bleak indeed.
Also lost a tenant at my property, a dairy distributor who decided to fold up the tent and call it a day. Everyone else there is in "just hanging on" mode.
"Life is what happens to you while you're busy making other plans." J. Lennon

woodbowl

Things are slow here as well Kelvin. My custom sawing buisness takes a turn up and down and doesn't seem to have a pattern except when lumber prices get low and hurricanes strike. I've sold a little wood over the years, but for me it was more trouble than it was worth. People dropping by to buy a few boards wind up talking about everything except buying boards. I'm not a very good salesman I don't think. Actually, I just don't enjoy the game of gab. If they want to buy it, there it is and there's the price. Entering into the smiley additude and talking the ole' stuff to talk your price down is an insult to me.

There's probably more money in selling lumber for the small guy, but there is less hassle and equiptment involved in custom sawing. This is my 13th year at it and I work alone except for occasional help from the customer. I could probably make a little more if I got a bigger mill and hired help, but there is the hassle thing again, besides I sometimes run out or low on work. When that happens, there's just enough to keep my head above water.

On another note, like other years before, all of a sudden the calls will come pouring in and I'll have more work than I can get to. It's been a couple of years since I've seen that. Sometimes I get worried, but somehow things seem to work out.
Full time custom sawing at the customers site since 1995.  WoodMizer LT40 Super Hyd.

Captain

We've got more material in the log yard than ever, and not a single order over 500BF all season.  Not to mention we are in week 4 of a "cease and desist" from the town.  Good thing there are a few outbuildings to build, it is paying the bills right now.  Being slow is really a pretty good thing for me right now with Paramedic School eating so much of my time.

Hang in there Kelvin, hopefully there are enough ideas here to get you going again!!

Captain

Ed

Kelvin, you aren't alone. I was talking to a friend of mine the other day, he makes hardwood flooring and paneling with a little custom milling thrown in.
They have been very slow for several months now, only a few small orders.

Ed

farmerdoug

Kelvin,

I am so busy with plant season that the mill has been real quiet.  As you states the pallet places are always buying.

We are doing better than last year on plants so far because we have shifted products offered a little.  8) But the others dealers are slowly dying in the plant business here.  :(

So what the others are saying about looking for different outlets and products is very good.  Find that niche and you will wonder why you did not think of it earlier.

Goodluck hunting.

Farmerdoug
Doug
Truck Farmer/Greenhouse grower
2001 LT40HDD42 Super with Command Control and AccuSet, 42 hp Kubota diesel
Fargo, MI

metalspinner

QuoteNot to mention we are in week 4 of a "cease and desist" from the town.

???
I do what the little voices in my wife's head tell me to do.

ely

i think a person has to sell according where they are located. here wher i am we have a circle mill down the road that sells 2x stuff and what they call bridge timbers for 32-36 cents a bdft. and that is what hurts me on price. i try and sell for 60 to 70 cents a bd ft . i really can't see how they sell the lumber for that. it would almost pay me to buy their timbers and resaw them into lumber.  the only saving grace for us small timers here is that mill will not cut less than 2x material.

then on the other end of the spectrum we have a bandmill over in town that is said to be cutting grade walnut and shipping it all to new york, making a mint in the process. all here say, i know, but it does make it tough to get work from folks thinking you are raking them over the coals. i saw logs for the pubic at .25 cents a bdft. or i will saw on the halvers most of the time.

then we have the folks over at the old chipper that are paying 50 bucks a ton for cedar and they make some product for the oil field service whatever. all i know is you can't get any cedar from anyone to saw up anymore. well that enough of my opinion.

woodmills1

Have seen a bit of a turn around in the pine market, pallet pine is lowere than ever but I got a few select pines into the concentration yard a week or so ago and they paid 440/thousand.  That translates to $66 for a 150 bd ft log.  Have had a mix of horse people, 2 farmers who built out buildings, 2 custom cuts and a few trailer/truck side customers,  I would say spring was a little slower than some years, but in no way the slowest. My regular dunnage and the barrel maker boosted my profits for the first half.
30,000 bd ft into the concentration yard with 2 large jobs comming up and around 13,000 cut on the mill.  this week was a little slow so built the top soil screen and now that the willow tree is gone I am redoing the backyard.

maybe you need to do some cold calls to farmers, horse people, or dunnage users

did you try to market moldings to smaller lumber yards?
James Mills,Lovely wife,collect old tools,vacuuming fool,36 bdft/hr,oak paper cutter,ebonic yooper rapper nauga seller, Blue Ox? its not fast, 2 cat family, LT70,edger, 375 bd ft/hr, we like Bob,free heat,no oil 12 years,big splitter, baked stuffed lobster, still cuttin the logs dere IAM

jpgreen

Here in California business is down across the board in many types of areas. Everyone I know in business is eeking by- myself included.

The cost of fuel is killing this economy IMO.

There are fewer and fewer people who know how to build anything anymore, and don't care to. They couldn't even grow a tomato if they have to.  I see generations in this state that are dumb as a stump.

I've sunk ever penny I can scrape up into realestate (taking avantage of the dropping prices) in land that I am going to develope, and a fixer house all in mountain communities hoping the baby boomers coming that want to get out of the cities or have a vacation home will buy.  Many with their hefty 401k's are buying in remote parts of our state now.

Otherwise I'm screwed for the moment..  :D
-95 Wood-Mizer LT40HD 27 Hp Kawasaki water cooled engine-

Captain

Metalspinner, Essentially the story is short.  We've been operating ofr over 5 years.  My wife prompted a small property line dispute (she moved some rocks) that led to a complaint through our Zoning Board.  Just so happens that the neighbor in question is the head of the Zoning Board and an attorney to boot.  The local building inspector (who enforces the zoning) is making sure that his decision is reviewed by the town's attorney before ruling.  We have a 500 foot buffer through trees, and have a permit and pay excise taxes for our operation.  We also farm the property.

I certainly can't afford another piece of property to purchase or lease for our small time operation.  My sawmilling may be limited to road jobs and pesonal use at home as a result.

Captain

TexasTimbers

Kelvin I am not trying to make you feel worse here but I have always advised newcomers on this board not to take out equipment loans to get into the sawmilling business and you have provided a prime example. Not calling you a "newcomer" I am  saying I have always told newbies when they ask "What mill should I get" I have always said stuff like "One without a note payment" etc.. My past posts probably have half a dozen such admonitions, and I am making this satement here inyour thread not aimed at you, but so others who come behind will see it.  But for you, what to do now?
I have given your post alot of thought since I read it and made my quick post above. My advice probably won't be very popular amongst a sawmilling crowd but I sense you are approaching financial desperation. If you cannot maintain your payments without going to the poor house (losing everything) and suffering anxiety, my advice is to sell off all the equipment that will bring the most principal back, and maybe sell everything off down to the last handsaw that you do not need; except for the mill. Keep the mill if you think you want to take another stab at it later down the road. If not, sell it too. You can recover and get another one even though you don't feel like you could and even though you may not feel like you ever want to.
I bet there people on this forum who "sold out" and started over again years later.

If you "wait it out" you could be looking at repos and judgements before you can get the equipment sold. You don't want to have to sell your equipment for 0.20¢ on the dollar. If you wait until the last minute you could be faced with this just to try and salvage things. I say this because I think alot of the people giving you the advice to "hang in there" etc. mean well but probably do not have equipment payments to meet or if they do they aren't seeing your degree of negative cash flow.

I do not know the extent or your direness and I am not asking, I am just saying don't wait until the last minute to try and save the farm. Do whatever it takes to keep the roof, the electricity, the transportation, the 'losses" to a minimum, and your dignity. You can work through it but it might mean "taking a job" for a while. You are young. I have seen people "start over" in their 50s, 60s, and even 70s and that is no exaggeration.

I am not say give up without a fight. I just don't know how long you have already been fighting and it may be time to think of these alternatives. I hope you do not have to liquidate but if you do . . . chin up! The sun always rises!  8) 8) 8)

The oil is all in Texas, but the dipsticks are in D.C.

Cedarman

I am bucking the trend.  We are busier than ever.  We just shipped a load of cedar poles from Southern Oklahoma to Eastern Pa because the customer could not get them anywhere else and I had sold all my 2 and 3" poles.  I am thinking of raising prices some.

My thinking is that since I am in a niche marketing position and can sell lengths other than 8' that most mills won't carry long cedar logs.  I attribute this to my website also.  People cannot buy ERC in any box store other than the 5/16 T&G.

A friend in Ok City bought 2000 feet of cedar 4/4 x 4' for 60 cents per foot.  I am at $1.10.  It all involves marketing. 

Kelvin, I would do a lot of research into why you have lookers and why they are not buying.  When they are about to leave, ask them.  Say something like,  "I am doing a little research and wonder why you decided not to purchase at this time".  "Do I have what you require or is it a pricing thing?" (You might make up your own questions).  But I would want to know why I lost the sale.

Have you asked them,"Just exactly what are you looking for?" I answer that way when someone calls and asks "How much is your cedar lumber?"

As others have stated, if what you doing is not working, time to look at all alternatives.
Study your effieciency.  If you are slow, experiment with alternative ways of doing things. 

Just getting on here and venting and seeing how others respond can get your juices going.  If you ride this out it can give you "unfathomable character".
I am in the pink when sawing cedar.

oakiemac

I don't know, but on this side of Michigan I'm on target for my yearly goals. I have had a lot of custom sawing -so much so that I had stump jumper come and cut about 11000bf for me.
Sales come and go but you have to ride out the slow season. This past winter was very slow but things picked up in April and havent' slowed down. Quarter sawn red and white oak are doing well and also rift sawn oak is selling good. Cherry always sells.
Mobile Demension sawmill, Bobcat 873 loader, 3 dry kilns and a long "to do" list.

Bibbyman



Maybe you should consider a different mascot.  I don't know about people in Michigan, but down here people may not understand. :)  ::)
Wood-Mizer LT40HDE25 Super 25hp 3ph with Command Control and Accuset.
Sawing since '94

jpgreen

-95 Wood-Mizer LT40HD 27 Hp Kawasaki water cooled engine-

flip

I read the topic and it occurred to me...we are supposed to be selling our lumber ??? ??? 
What I can add to this is not more than this.  I bought my mill and other "stuff" after I got divorced and sold my house, basically what was left over from 25 years of saving.  I have not paid myself back for my efforts but have been using some of the wood I've cut to do paying jobs, so now I'm getting into the furniture business to help pay the bills.  My 6:30-5:30 job pays my necessities and child support, if I need propane for the winter I have to saw or build.  By no means will one get rich in this game, for me it's a way to relax and create.  I have been running ads in the paper on a regular basis and get the occasional call to cut up the one or two half rotted ant infested logs.  I did get one here lately I quoted over $3000 to do but it was about 20 miles away in the middle of no where.  I told him to haul them here or sell what he cut, I have not heard back.  For most of us I think this NEEDS to be a hobby even though we see the mark up from tree to log to lumber most are not equipped to go big enough to see $$.  I've heard the saying several times, "to make a million in the lumber business, start with two". 

Can you scale back?  What can you sell off that is not critical to the mill itself?  Do you have some inventory that you can move quick and sell cheap?  Make the sale of the mill itself the last resort, sell everything else first and see where you stand.  I have an edger I bought with the mill, I had to put an engine on it and now it is sitting under a tarp and has been for the last year.  I sould probably sell it buuuuuuuuuut ::) you never know when that big job will come along that I may need it ::) ::)  Point is, can someone else sharpen your blades?  Sell off the sharpener and setter, there is a couple grand.  Can you edge on the mill?  Sell the edger if ya got one, again another couple grand.  Like others have said sell what you use least first and see where you are in a few months.

Flip
Timberking B-20, Hydraulics make me board quick

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