How do you compete with the big stores???

[gator gar]

Down here in East Texas, we have Lowes and Home Depot as our major lumber outlets. How can you compete with .60 a bft of kiln dried SYP lumber that they sell.. What do you tell your customers. I just quoted a price of .45 a bft to a guy wanting a bunch of boards out of my logs. Yes, they were free logs, but I stiil had to log them and transport them to my home.  If I charged for my labor to get the logs and my cutting the lumber, there is no way to come out ahead. Especially if I had to buy the logs. To me, my logs still have to be figured in somehow. How can you stay competitive and not lose your shirt??? Offer a higher grade??? Whatever it is, I need to know what to do. Can you help???

I also went and priced a job of cutting some creasote poles. This is going to cause me to have to wrap completely up and wear a respirator as not to breath the dust.  I quoted him a price of .45 a bft to cut it, a dollar a mile to drag my mill over 60 miles and 20 dollars a blade if I hit any foreign objects. He called his supplier and can buy cattle treated fencing style lumber for .70 a bft for 2 inch and .90 for 1 inch. It would be cheaper for him to just go out and buy it, after he figures his labor in doing it. If he does get me to do it, it will be just because he doesn't want them to go to waste. Not because it is a great deal

I can stay home and be broke. I don't need to kill myself to do it. Any suggestions out there???

[gator gar]

Gonna add that the .45 a board foot on the creasote, was quoted with me suppyling the labor. I've got  a guy that works really well with me on the mill. If he don't show, then I will do it myself. I need someone who is thinking ahead and knows what the next step is and is waiting on me. I don't like training a new person, everytime I go to a job. So, I include the labor in the price.

[customsawyer]

As to the competing with the box stores I don't, if the customer don't know the grade of lumber that you produce is better than teach them. Take a few samples of your lumber with you and show them what your lumber will look like. Then you will still have some customers that are trying to just get the price down and beat you out of what you should be getting, let them go to the box store. The best way to whip the box store is in service they can't provide. ;D

[Ron Wenrich]

If you've ever seen them make dimension stock lumber, you will know that the new technology breaks a small log down in seconds.  Not the minutes it takes you.  You can't compete with those economics.  Its best not to try.

But, you can compete on things that they don't have.  Clear boards are just glued up stock in those box stores.  Some won't make grade, but are sold to the unsuspecting.  They also don't carry the odd size material.  You can provide that, but the market is smaller.

You must consider the price of the log, whether free or not.  Find your delivered price for logs.  If the "free" log is more in time and labor than delivered, then it actually costs more.

[bandmiller2]

Gator,short answer you don't,you cut and sell what they don't traffic in.Folks like rough cut,odd sizes,or uncommon native species.If they say Low/Depo 2x4 are cheaper say fine buy em but sheath with rough cut pine for the camp or tool house.When they see those 2x4 doing a half gainer they will realize what good dimention is, well some anyway.Frank C.

[Larry]

Have you ever seen a 6" X 12" X 16' SYP timber in the box stores?  Ever see anything over 16' long?  Ever see anything other than real low grade red oak in the stores?

BTW, we have 5 Lowes, along with 2 HD's...none of em can compete with the real lumber yards, on either price or quality when it comes to construction lumber.  The big box stores are not lumber yards...they get there business from the home improvement crowd.

[stumpy]

with what's been said.  The big stores have what they call "loss leaders"  These are items they price at a loss just to get you in the door where you'll buy all the other things you need.  I think it's safe to say, none of us small timers can compete with the big guys on standard construction lumber.  Add to the problem up here  is that no matter how good my lumber is, it's not graded so if there's an inspector involved, you can't use mine anyways.
I have a question though.  I notice you guys referring to SYP from the big stores.  I assume that's southern yellow pine.  Up here, all the construction lumber is stamped "SPF"  I've been told that stands for Spruce Pine Fir, meaning that the lumber could be any one of those species.  AM I correct?

[Kansas]

All good advice.
Years ago we built crates for a company using a lot of OSB. We used quite a bit of it. On occasion I would price a full truckload of it from a broker or mill. Unless they had a load of off-grade, I could buy it at the local home depot cheaper. They would often sell it at below their cost. Same as those 2x4s. They know when people buy those, they also have to buy nails, caulk, etc. That is where they make their money. Find the things they can't or don't want to sell. And remember, everything they sell has to have a bar code. That is why their hardwood lumber displays are priced so high. They have to have all the boards the same. And that isn't the best way to sell hardwood lumber. I imagine the same would be true of softwoods. Your market is catering to the unusual, the hard to find. And charge for it. Don't figure the price as if Lowe's carried it. Make a fair profit.

[Meadows Miller]

Gday

Gator Ron and Jake have hit the nail on the head just dont bother Mate  ;) Chrage what you need to make a reasonable living get into a niech custom sawing is one of those things where if the person starts the oll i can get cheaper overther than here tell em to go get it at the box store  ;)  :D You dont need to deal with ppl like that Mate  ;)

On a side note about logs they are your main imput cost and have a major impact on profitability  in milling whether you fall them your self or buy them in from a contractor  the cost will only realy vary by what stumpage rates are in your area and you have more control of whats going on and dont bring in logs that arnt profitable Mate  ;)

i got stuck sawing about 37000bft sawn of pallet timber  out of logs that where below grade last year after a contractor sent me logs that had pulp log and smashed ends compression fractures and random lengths and oversize & undersize log with excessive sweep basicly all the trash left on the landing after a logging job which was all way out of my specs that i had sent him ( i had also offered a premium price per ton to get what i needed to fill a specific order )and i was stupid enough to unload logs  and take repeted promises every load when i rang him to ask what the hell was going on   : .

that he would come up and scale and grade the logs with me and readjust the pricing to suit the grade he didnt show up after waiting 4 months and after recieving an invoice at the premium price   :  
So i started sawing what i could out of them as a cost recovery excersize and now he's trying  to go me for $1500 dollars more tham what i turned over out the whole volume of logs delivered  :( >:( (he's got another thing coming too if he wants to try an force me into liqidation or anything along those lines  ;) as it wont end plesently for either of  us  :( :'( and i have offered a resonable payout figure against what the what the logs where worth aswell  and done everything i can to find a solution to the problem  ??? :  even offer'd at the start of last year to saw on his mill at 25% below my usual hourly rate just to cut some of the bill out get the thing out of the road  (as he was having labour shortage issues) which was refused   ??? : :

its got me stuffed as i allways try to do the rite thing by people by tryin to sort out their problem  : : but it allways costs me money everytime but this is the last time ill take logs out of spec as im always the one who gets stung and left out of pocket  ??? : :( :'(
In hindsight i shold have just said stuff you these arnt what i ordered and rejected the loads outright there and then as they arrived  ;)  and it would have cost him around $3to4 grand in cartage an i wouldnt have had all the dramas over the last 16 months to deal with and this has been the main one   ;) but thats life and ill be back ontop soon enough either way  ;) ;D

Sorry about the rant there are alot of good people in this industry  ;) ;D ;D ;D 8) 8) and what im basicly saying either saw someone elses logs, falling them yourself (which is what im doing from now on ) or get hold of a good logger and keep them  ;) ;D 8) I will most likely buy logs in in the future from time to time on c.o.d but only if its what i have specified  ;) They all cost about the same in the end  ;)

I am also doing more direct sales now in higher value Hardwood timber & Hardwood firewood ;) and will look at doing  packlot direct to the costomer sales of treated pine garden ties at about a $1.30 bft and that will be about the only pine i will saw in future  and will come out of stumpage free pine windbreaks  ;)



Regards Chris

[brdmkr]

I don't try to compete with box stores for framing material.  I really don't sell much lumber, but I do saw for others.  Sometimes folks ask for 2x4s or 2x6s.  I'll cut them if that is what they want, but I encourage them to price them at the local HD first.  They sell for about 55 - 60 cents a bdft.  I also tell them to price 1x material.  If they need the 1x, I will wind up cutting 1x.  Clear 1x pine at our HD costs over 1.50/bdft and red oak is almost 6.00.  It cost them the same for me to cut 1x as 2x  and they see my sawing a 1x as a great deal, and it is. 

[ErikC]

   

I don't try to compete with box stores for framing material.  I really don't sell much lumber, but I do saw for others.  Sometimes folks ask for 2x4s or 2x6s.  I'll cut them if that is what they want, but I encourage them to price them at the local HD first.  They sell for about 55 - 60 cents a bdft.  I also tell them to price 1x material.  If they need the 1x, I will wind up cutting 1x.  Clear 1x pine at our HD costs over 1.50/bdft and red oak is almost 6.00.  It cost them the same for me to cut 1x as 2x  and they see my sawing a 1x as a great deal, and it is. 

I just had this conversation with a landowner yesterday afternoon. When the landowner has a few logs they would never be able to sell, they can get a bit of value from framing lumber as well as 1" though. But if a man was buying the logs it's a different story.So in my case they are getting it all for .30-.35 cents a foot, a fair price, and making use of resources they already own and would otherwise be wasting. Helping them to see the value in more ways than one is part of the job these days. If all they care about is saving a few dollars up front, it may be best to just move on.

[Magicman]

I'm sawing framing lumber for a home addition now.  This is from beetle killed pines that have no market value.  His lumber is costing him his time plus my saw price, plus his trees are not going to waste.

I sawed for a 2700 Sq. ft. home a while back.  The customer forgot to have me saw the 2X10's.  He had to go and buy that lumber.  He told me that it was the worst lumber in the whole house.

I just say that "they know what their lumber is worth".....

[shinnlinger]

SPF is spruce pine fir as previously indicated, they just saw what they have on hand.

As far as the rest of this conversation,  I concluded fairly quickly in my sawing experience that if I wanted 2x4's it was cheaper for me to go buy them than to mess around with my mill making them.  BOards and beams for me.....

[Ironwood]

Shinnlinger,

That is the same conclusion I came too, you cant compete w/ that economy of scale and the "loss leader principle". Instead sell them on why your 4/4 roof decking and side wall sheathing is BETTER.

Ironwood

[Magicman]

I'm competing every day I saw.  Here's 1994 bf of dimension 2X4, 2X6, and 2X12's.  This job will last several more days.  This customer is making a two story addition onto his house, and guess who will saw all of the framing lumber.

[Cedarman]

You don't see any ERC lumber in the box stores. You do see some ERC mailbox posts and some T&G lumber in 15 1/4 sq foot per box at 5/16" thick.  We used to make 10,000 mail box posts a month at commodity pricing.  Now we sell only custom sawn cedar.  Prices much higher than commodity prices, quantity down some and profits much higher.  We do saw some poplar for specialty pallets so we can ship our wood around the country.  We have worked to become the go to place for custom ERC around the country.  Lefferts Historic House in Brooklyn NY has 50 of our peeled 8" x 8' logs to make a road bed to put planks on to make an old time plank road to display an old time wagon.  Universal Studios in Fl has 4 big 8' pallets of 2" poles for a Hippogriff next for their theme park.  Disneyworld has 2500 square feet of split wood ceiling.  The weird list goes on and on.  Just sent a truckload of cedar sawdust to Houstom for specialty markets.  A multinational corp just sent a PO for 24000# of specialty sawdust.  They pay very nicely for this product.  Am sendind 60  cedar tree limbs that are 3" to 4" base and fork 2 or 3 branches in the same plane about 6 to 7' long for 8 bucks a piece along with 20  !6' x 6" logs and 32  12' x 8" logs and 20  4" x 8' logs for a place north of Chicago on Lake Mi.  The contractor made a special trip down to go to the woods with us to show us exactly the types of limbs he wanted.  We knew which trees would have the right limbs.  Took 2 hours to get the 60 limbs.  1 hour to get them loaded and home.  10 minutes to unload.  Second time he has wanted some weird limbs.
When the phone rings or e-mail comes in I never know what will be wanted.  Bronx zoo send an e-mail titled  "Ugly Cedar"  Wanted a whole semi of crooked poles of various lengths.  It was harder to get the truck to haul then to get the crooked poles.
Moral of my story.  Do those things that are not generic if possible.  Odd widths, lengths, thicknesses and species.  Be nimble
If I was in hardwood, I would call every manufacturer and see if they need odd length and width pallets or other specialty items.
Kansas, since you are in the pallet business would it make sense for someone to work with you on weird size pallets that would need special length lumber to satisfy some of your customers?  Maybe I am all wrong on this.

[malcolmtent]

Lefferts Historic House in Brooklyn NY has 50 of our peeled 8" x 8' logs to make a road bed to put planks on to make an old time plank road to display an old time wagon.

Well, I'm just going to have to drive a mile down Flatbush Avenue to go see them there planks. And I'll tell them you said hello.

[captain_crunch]

Cutting full 2X6 and Timbers is only option I only cut a 2X4 if it is all that is left and generaly give them away to friends : : Seems like 2X12X19 ft for trailer decking sells also

[Cedarman]

Malcontent,  I would love some feed back on how well the logs look for what they were doing.  They have been there about a week or so.
Thanks Richard

[Qweaver]

The kind of lumber that you can competitively cut will depend to a large extent on the kind of tree you are cutting.  If I try to cut an entire poplar log into 2x4s it will take too long and I will end up with a lot of bowed boards.  But if I saw most of the log into 1x and take 2x4s out of the center it's much better.  I have sawed whole white pine logs into 2x4s and done OK.  I'm sawing out a 36x24 shed right now that uses 1x10 for B&B and many 2x4s, 2x6s, 2x8s and 2x10s and here is how I'm sawing the poplar. I can make the 2x6s and up using the whole log and keep them pretty straight...but not the 2x4s. 

[woodsteach]

I don't worry about it. 

Specialty is the key! 

Full 2xfull 12" x 18' white oak  right now...I don't think you can get it at home dpot!

woodsteach

[Kansas]

woodsteach, you are completely on the right track. I actually have a few salesmen (and women) at the big box stores that pass out my number. Again, if they can't barcode it, they can't sell it.

Cedarman I actually did get some lumber in in the fall of 2008, when we simply got overwhelmed. 2009 backed off and we could keep up. Now its back to 2008 levels again. I have two problems though. One is virtually no mills around here. I am kicking around the idea of having the one local portable woodmizer to come over and tackle the custom cut logs.
Our other problem is that the business model that we wound up with is both a blessing and a curse. As we developed relationships both with those we cut pallet lumber for, plus the skids we make, we chose higher margins and better prices for the lumber we do sell, in exchange for cutting smaller amounts of odd stuff that has evolved into a just in time type relationship. The customers we have expect us to get stuff cut right away.The pallet customers charge a premium for their pallets to their customers because they are unusual pallets, same as we do. I charge them more for the lumber.  Now most of the time that isn't a problem. We keep a good supply of logs on hand to cover the orders. The problem is when everyone calls at once. The construction  companies we cut blocking, trailer decking etc are the same way. They rarely argue or question price. They just want it right away. That makes it tough to buy and resell from another mill.

Had a construction company that has bought from us in the past call yesterday. They wanted 200  1 1/2 x 12 by 8 ft oak planks. They really wanted 300, but 200 would get them by. They wanted them by Friday. I said no way. We settled on early next week. They had  to have known about this project for months. I was a bit irritated and quoted 1.70 a board foot. All they said was, give them one day's notice so they could get a truck on the road to pick them up. I thought that was a bit odd, and asked them about it. Its a bridge project in New Orleans. They are sending a truck all the up here from there to get them. That seems senseless. How many sawmills will they drive by getting here? Doesn't matter, I guess. They are bringing a check. Gonna be a long weekend.

[wwsjr]

I have a couple of local building supply stores, who call me for all their speciality wood such a beams plus several building contractors. Box stores do not gave 10X10X12 posts or beams. Outdoor kitchens for upscale homes is a big thing in my area. I have cut 3"X8",10" for rafters to be left exposed. I have cut probably 10 complete packages, framing, exterior and interior wood for lake cabins or hunting camps. Recently I cut framing package for lake house from SYP from the customers land. I told customer he could buy studs cheaper from box stores. His reply, "I do not want those, I want you to saw them".  He had some very good native close grain logs, many pieces had no knots. I have not really had any competition from the box stores.

[zopi]

Also, look for niche markets...wide board floors, turning blocks, unusual things...gotta guy buys a pickup load of slabs off of me every now and then...he does and sells wood burning art...

[GaryinMississippi]

What is ERC lumber?