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Author Topic: added price when milling from your own logs?  (Read 2837 times)

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Offline forrestM

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added price when milling from your own logs?
« on: April 14, 2019, 07:09:20 PM »
Hello,

When you mill and sell your own logs, do you bill for your cutting time (hours or BF) and also add a charge for the material? As an example -- Say you spend 4 hours cutting 15 - 10'x2"x10" boards from your own poplar logs -- about 250 board feet. 

if the price for poplar logs is  $500/1000bf then 250bf would be worth $125 

and say you were cutting by the hour at $40/hr --  $160 

would you charge both amounts? $285

I just made up a number for the price of poplar logs - not sure what it is off the top of my head. Also - if my math is incorrect, don't hesitate to let me know!  

do you use the same price for lumber as you would for the price of logs? or is there a different price you apply to sawn lumber?

Thank You,
Forrest




Offline WV Sawmiller

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Re: added price when milling from your own logs?
« Reply #1 on: April 14, 2019, 07:34:37 PM »
  I don't make it that complicated. I just figure what my sawing rate is and the value of the lumber I have to have from my own logs on top of that. When the customer buys the lumber he is paying for my sawing, price of the log, cost to cut and drag the logs to the mill, etc.

   BTW - I don't sell my logs and almost never buy one.
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Offline Ron Wenrich

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Re: added price when milling from your own logs?
« Reply #2 on: April 14, 2019, 07:45:08 PM »
Depends what the mill down the road is charging for those 2x10s.  You have to figure out what the market value is in your area.  If you're the only mill around, you might have a bit of leeway.  But, you're in competition with the local mills and the local box store.  
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Offline Tom the Sawyer

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Re: added price when milling from your own logs?
« Reply #3 on: April 14, 2019, 07:46:44 PM »
I primarily custom mill other peoples' logs, both on mobile appointments and here at my home.  Some of my clients have projects in mind but don't have a suitable log, or have found out that it is much easier to purchase a log from me, rather than fell, buck, load, and haul their own log.

I purchase logs from sources like tree services, property owners, land clearing companies, and try to keep a varied supply on hand.  I sell the logs with milling, at so much a board foot for the log, plus milling fees, plus tax - they take the whole log.  Earlier this week a frequent client, who is a furniture builder, came out seeking a large white oak mantle and picked out a burr oak log. He got 2 - 5/4x12"x8.5' LE, 3 - 5/4x14"x8.5' LE, 2 - 8/4x16"x8.5' LE, 1 - 24/4x17"x8.5' LE; 176.02 board feet for $240.23. (Average 1.36 p/bf).  I have a client scheduled for tomorrow who is looking for a small white oak and a white ash for a steam bending project.

Those prices are based on taking the whole log.  If they only want a couple of boards, prices are significantly higher.  I sometimes have lumber for sale, prices go up the longer I have it, because it is drier.  For example, a pair of bookmatched, 8/4 live-edge, walnut planks would start at $6 p/bf green, $7 under FSP (30%), $8 air-dry (12%), $10 KD/HT.  The best ones go early.   I don't sell commodity lumber, the only softwoods I mill are ERC and cypress.
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Offline YellowHammer

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Re: added price when milling from your own logs?
« Reply #4 on: April 14, 2019, 08:57:45 PM »
It depends what you are selling and what the market will take.  Certainly I would never sell lumber for less than it takes to produce and acquire.  
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Offline WV Sawmiller

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Re: added price when milling from your own logs?
« Reply #5 on: April 14, 2019, 09:08:04 PM »
Tom,

  I think that is a novel idea about the customer buying the whole log. Makes sense in case his specific need for a board or mantel or such screws up the value of the rest of the log. What I don't sell I put in stock for the next guy. Of course that may be a long time before that next guy shows up.

  The logs I sell are usually excess trees I have like tulip poplar which I have in abundance, a stand of overaged Norway Spruce from a Christmas tree farm 65-70 years ago and anything that is damaged or uprooted like a big basswood and a couple of maples from last winter and of course the dying/dead ash trees. I may cut and sell a cherry or two but not my oaks or hickories which are more valuable for wildlife trees to me. My lumber I sell is based on my perceived value of it for example: Polar and any pine I might have obtained $.75/bf, spruce/maple/oak (I got some "free" red oak - paid the guy 2-1X8X8 boards plus my transport costs) $1/bf, Basswood $2/bf, Cherry $3/bf, Walnut $5/bf with special prices for big slabs, cookies, lath boards, crotch pieces, mantels, etc.
Howard Green
WM LT35HDG25(2015) , 2009 4wd Dodge PU, Kawasaki 650 ATV, Sthil 440 & 441, homemade logging arch (w/custom built rear log dolly), JD 750 w/4' wide Bushhog brand FEL

Dad always said "You can shear a sheep a bunch of times but you can only skin him once"

Offline barbender

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Re: added price when milling from your own logs?
« Reply #6 on: April 15, 2019, 01:32:37 AM »
I usually just figure the market rate for the logs I have, regardless of what I have into them. So even if I got some pine logs free or real cheap, I figure $100-130 for them, and that's what it will cost me to replace them. Then I add my sawing rate to that figure (my sawing rate is way too cheap, kind of the market up here. So I have to make it up with really cheap wood).
Too many irons in the fire

Offline John Bartley

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Re: added price when milling from your own logs?
« Reply #7 on: April 15, 2019, 12:59:18 PM »
Cost (what I paid) for the logs the customer is buying = $"X"
Labour (time spent sawing) = "Y" hours

Customer price  = ("X" + "markup") + ("Y" x hourly rate) + whatever taxes apply.

That's it.   I don't care what the competition is selling for.  If I am too expensive I don't saw ... I can do something else.  If I am too cheap I go broke .. I know which one I'll choose.

cheers
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Online Woodpecker52

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Re: added price when milling from your own logs?
« Reply #8 on: April 15, 2019, 01:19:29 PM »
I sell for what everyone sells for, market rate and if I want to drop it I do for volume purchases.  I know my labor cost (free) I am retired! and logging cost very little on my land, and sawmill cost minimal.  So It just boils down on what price seems right in the market and what I want to fool with.
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Online Woodpecker52

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Re: added price when milling from your own logs?
« Reply #9 on: April 15, 2019, 01:22:23 PM »
One more thought I paid for my mill in about 5 months.
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Offline forrestM

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Re: added price when milling from your own logs?
« Reply #10 on: April 17, 2019, 10:52:01 PM »
Thank you! How nice it is to be a part of the forestry forum!

Offline Beavertooth

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Re: added price when milling from your own logs?
« Reply #11 on: April 18, 2019, 12:15:19 PM »
I am with John Bartley on this one. 
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Offline Mountain_d

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Re: added price when milling from your own logs?
« Reply #12 on: April 19, 2019, 08:12:05 AM »
Does anyone use a percentage of what the lumber yards charge? If sawing 2x4 2x6 etc from your own spruce and selling rough, say charge 75% of the lumber yard price? Any thoughts?
Mountain. 
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Offline John Bartley

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Re: added price when milling from your own logs?
« Reply #13 on: April 19, 2019, 08:36:52 AM »
I know my labor cost (free) I am retired! and logging cost very little on my land, and sawmill cost minimal.
I would never dream of telling you how to run your business affairs.  This is a different point of view, just to help others think a bit deeper about the "cost" of things.

Time :  I am also "retired" .... sort of.    I have a non-financial need to work.  Many of you will understand that.   But ... "time" is never free.  There are always other things that we can, or want, or need to do, and time spent working for other people takes away from our enjoyment of "our" time.  That is the true cost. It is hard to put a price on, but I refuse to subsidise other people's life styles at the cost of my own (ever shrinking) time.

Materials : even if you cut them off your own property, they have value.  included in that value is time, fuel, saw chains etc.   Once again .... using your own materials and NOT charging for them is the same as subsidising your customer.

The sawmill : every pass taken on a log on your mill is one less pass available on your mill's lifespan.  Mills are not cheap and if you use it up by giving it away to your customers, you have again given away your resources for free.  If you live long enough, someone will have to pay to replace that worn out mill and I doubt that your previous customers will line up to donate their hard earned money to you ..... no matter how cheaply you gave away your time, materials and mill.

.... just some food for thought ....

cheers
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Offline John Bartley

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Re: added price when milling from your own logs?
« Reply #14 on: April 19, 2019, 08:42:18 AM »
Just gonna' add this ... gleaned from a lifetime of working for myself...

You can compete on price, quality, speed, service, attitude, all sorts of things.

When you compete on price, you either give up on the rest or you go broke.  Competing on price is a race to the bottom, or .... as my son says ... "aiming for mediocrity".


The formula : determine, without error or exception, your "true" costs, add enough profit to live a good life, and then add a bit more for the rainy day fund.  Unless that's your selling price (or higher), quit milling and go find a job.

cheers
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Offline Banjo picker

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Re: added price when milling from your own logs?
« Reply #15 on: April 19, 2019, 09:28:35 AM »
Does anyone use a percentage of what the lumber yards charge? If sawing 2x4 2x6 etc from your own spruce and selling rough, say charge 75% of the lumber yard price? Any thoughts?
Mountain.



Mountain, as a normal rule for myself, I dont quote 2x4 or even 2x6 s as most of the box stores have too low of a price for those.  Charging 25% less than they charge will likely put you selling your lumber too cheap.  Cut the same logs into nice one inch boards and you can beat their price and still do well.  At least thats the way it is here.  The big mills will be able to cut 2x4 s out of fairly small logs then chip the rest for mulch or at least chips.  A small mill will have to cut those same boards out of much better logs, and then have a bunch os waste to dispose of. Banjo
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Re: added price when milling from your own logs?
« Reply #16 on: April 19, 2019, 09:32:24 AM »
In my area one can not compete with the lumber yard/box store selling framing lumber....not.

Now, probably 90%+ of my sawing is sawing framing lumber.  It is cheaper/easier for a landowner to knock a few trees down and have them sawn into lumber than to buy what they need because there is virtually no market for selling a few trees.  That plus many of the harvested trees are beetle killed and have no market value.  It's a salvage "save what he can" operation.

When I bought my sawmill my intention was to saw and sell, but within the first year my business model changed to the opposite direction.  I am now 0% selling and 100% custom sawing.  Only you can look at your available market and decide which direction or directions to take.  If you sell you might consider adding value such as drying, planing, etc. all of which require more capital expenditures/investments.
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Offline Southside

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Re: added price when milling from your own logs?
« Reply #17 on: April 19, 2019, 10:25:38 AM »
say charge 75% of the lumber yard price? Any thoughts?


I don't advertise framing lumber but do sell some when folks ask for it.  My price is about 25% OVER what you would pay at a box store and I make no qualms about it.  First I don't try to compete in that market, no intention of doing so, second I am producing a superior product to what you can buy from the box store so I charge accordingly.  Serve a market that exists and is under-served with high quality and value and you can basically name your price.  

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Offline Bandmill Bandit

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Re: added price when milling from your own logs?
« Reply #18 on: April 19, 2019, 11:09:20 AM »
Hard woods I sell at the same or a bit higher as the local specialty lumber outlet. Most of my customers say they cant get the same quality from the store and often pay me a generous tip to boot.

SPF I sell at the same price as the local farm supply UFA store. Every customer says the stuff that I sell them is much better quality the the store. I don't chase the market as I dont need to and I think that actually helps people find you.   
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Offline Mountain_d

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Re: added price when milling from your own logs?
« Reply #19 on: April 19, 2019, 01:15:19 PM »
Southside, I see your point. We do saw better stuff. Straighter than the mass produced and high production dry kiln stuff. Good feedback to give me a reason to ask a bit more.
Mountain 
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