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Author Topic: added price when milling from your own logs?  (Read 2861 times)

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Offline Magicman

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Re: added price when milling from your own logs?
« Reply #20 on: April 19, 2019, 02:32:37 PM »
Absolutely Southside.  smiley_thumbsup

My statement above should have read that you can't compete with them on prices, but your product wins out many times over on quality.  If a potential customer is price shopping, he is playing his own game.  Stand your ground but be very sure of your cost/pricing/profit.
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Never allow your "need" to make money to exceed your "desire" to provide quality service.....The Magicman

Offline YellowHammer

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Re: added price when milling from your own logs?
« Reply #21 on: April 21, 2019, 07:47:46 AM »
I agree 100% with what you guys are saying, its the core of our business model.  In this day and age, we have all gotten used to paying high prices for mediocrity.  We don't like it, but have no choice.  

So as a business owner, make a conscious decision to provide a better product and service.  A statement I say several times a day to customers is "You can't get this at Lowes."  

A professional chef doesn't compete with McDonalds, and professional machine shop doesn't compete with Harbor Freight.  

I had a great example of this happen last week.  A guy who is a sure nuff bargain buyer called me up and said he needed some walnut.  He asked my price and freaked, said he had just gotten some green at $2 per bdft from another local mill.  I said good, but it isn't my stuff.  So later in the day he drives buy with that same truckload of the ugliest walnut I'd seen in awhile, thick and thins, knots, bends, bark, etc basically unusable even for pallet stock, and starts haggling over my prices, (I don't haggle), and I say surely you aren't  comparing my wood to that garbage?  We went out and looked at it, and after I showed him what was wrong with it, he was actually embarrassed he had bought it.  So he bought some of our walnut complaining about the price.  Then as he was loading it on top of the garbage wood, he got it out into the sunlight and it just shimmered, and he said it was the best he'd EVER seen.  Then the next day, he came back and bought some more, saying he started using mine to finish a project and when he saw the difference between what he had been using and mine, he said he was just going to start the piece over with mine.  Our price? $9 per bdft.  Seems high but we buy veneer grade walnut logs, at twice the price he paid for his garbage wood.  I made sure he knew that, saying "My logs cost twice as much as that junk lumber you bought, and our wood starts with the best and ends better."  Can't make a good steak from ground beef.  

So among other things, my point is, don't skimp on buying low quality logs and expect to make good lumber.  Buy the grade logs that will set you apart and people will notice.  Then hone your skills and dial in your mill to take advantage of the good logs.

My other point is know you market, but get paid for your work.  

  
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Offline hacknchop

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Re: added price when milling from your own logs?
« Reply #22 on: April 21, 2019, 05:29:46 PM »
Custom milling is just that ,I have always had a bdft rate according to species and charge accordingly consistent pricing makes for return customers. When sawing other people's logs same thing I charge either hourly or by the bdft been sawing long enough that I never lose money sawing and have  many of the same customers over the yrs . As YH said quality will make customers happy and more likely to return.
Often wrong never indoubt

Offline Ron Wenrich

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Re: added price when milling from your own logs?
« Reply #23 on: April 21, 2019, 06:09:28 PM »
It may be true that a professional chef doesn't compete with McDonalds, but, they do compete with the professional chef down the road.  

I sawed in a commercial operation, and I competed with every other mill for the business.  We also competed with other mills to buy logs and stumpage.  We had to pay top dollar for those in order to have enough material for the markets.  I rarely lost a market, unless they went out of business.  We never sawed on speculation.  

We sold to commercial buyers and the occasional broker.  My secret was to give them what they ordered.  4/4 lumber was cut plump and the grade was there.  If they ordered a load of F1F and btr 8/4 red oak, that's what they got.  Very little to no 2 Com mixed in.  Well edged and well trimmed.  I once got a note that came back with the trucker stating it was the nicest load of lumber they ever got.

Same went for the low grade blocking.  They ties were cut plump, as they requested.  Pallet cants were cut plump so they could get an occasional extra board.  

The guy that came in off the street and wanted a special order got what he ordered.  If he wants trailer boards, then they were cut out of the blocking type of logs.  We charged about double the blocking price.  We had some pattern shops that needed specialty lumber.  We cut that when we cut the species they could use.  Charged about double market for the small order.  We had return customers.

We were the professionals down the road, also known as competition. 
Never under estimate the power of stupid people in large groups.

Offline John Bartley

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Re: added price when milling from your own logs?
« Reply #24 on: April 21, 2019, 08:18:25 PM »
So, after all this it seems that old adage is true :

You can have it done fast
You can have it done cheap
You can have it done right

Pick any two.
Kioti DK35HSE w/loader & forks
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Offline hacknchop

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Re: added price when milling from your own logs?
« Reply #25 on: April 21, 2019, 10:03:44 PM »
I agree with Ron as that was my experience as well except that I  would take my mill in the bush and cut on site bridges for logging companies I also cut for the two big sawmills in the area and wether it's a farmer building barns or structures , crossing timbers for the railroad , someone building their own home or a contractor building for someone else your logs or their logs treat them fair ,good quality and competitive pricing and you will be successful .
Often wrong never indoubt

Offline John Bartley

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Re: added price when milling from your own logs?
« Reply #26 on: April 22, 2019, 10:20:02 AM »
I agree with Ron as that was my experience as well .... snipped ... competitive pricing  ... snipped
Except that Ron didn't compete on price.  His post clearly states that he charged "double the market".  Ron competed on quality of product and quality of service, not on price.
Competing on price, without qualifying "who" you are competing with, simply means that you are racing for the bottom.  Bottom  = broke = poor = crappy lifestyle.  Thank you, no, not for me.
cheers
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Offline hacknchop

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Re: added price when milling from your own logs?
« Reply #27 on: April 22, 2019, 10:55:34 AM »
Sorry I  guess I  didn't  explain I will try and do better the difference is circumstances you can charge as much or as little as you like if you are financially independent but some of us who raised our family travelling with a mill ( I  worked on the road for almost 10 yrs before woodmizer even gained popularity in our area Board Bandit was popular then ) so I  charged 30.00 /hr and then when other mills started charging 35.00/ hr and raised it along with my competition, when I  started selling dimension lumber from my own yard spruce and hemlock cost was 150.00 mbft and the price for sawing at the time was 100.00 mbft  so 250.00 mbft and the price changed accordingly , now considering that the population in my area was about maybe 1000 people in the area you could price yourself out of business one way or the other pretty quick so competitive pricing means just that priced according to market value and when your livelihood depends on doing business with the same people over and over you set a fair price so that they are happy and you are happy . Everybody happy good business, that's why we have " the another happy customer thread " which I enjoy reading.
Often wrong never indoubt

Offline YellowHammer

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Re: added price when milling from your own logs?
« Reply #28 on: April 22, 2019, 11:12:11 AM »
We have structured our business to largely avoid competing with Mega Mills, and actually have a good symbiotic relationship with them as they are good accumulation yards for the best logs and lumber.  We send work to them and they send work to us, and their business isn't ours.  Our business is structured to provide the absolute highest quality lumber available.

Our main product, about 20 different species of kiln dried, S2S and S4S hardwood, is arguably one unofficial grade higher than FAS at a goal of 100% usable wood.  I realize FAS can go to 100%, but since we sell more than we can produce, when we are forced to purchase kiln dried "Top Grade" FAS packs from mega mills and wholesale suppliers such as on the HMR, they will have mixed percentage yield mixed in as per grade, and we have to end up working pretty most every board in the pack to bring it up to our standards, unless we can buy it green and have it sorted directly off the chain.  Some people call it the "Presidential Cut" but around here, even the Mega Mills call it the HHA grade, or as a local pro lumber grader calls it "No stinking knots!" or as in the case of walnut and cherry he call it "No stinking sapwood!" as they hand sort boards to meet our grade requirements.  When the boards come out, they mark each board with an HHA for the sorters to put them in our stack, which is actually how we came up with our company logo, its the shorthand version of using lumber chalk and spray paint to mark our logs and boards from our suppliers.

Ron, from the sound of your operation, we would have worked well together, because I would have been one of the guys calling up asking, and paying, for the best you had.  I remember a few years ago, I badly needed some walnut, I was running out, couldn't get logs, etc, and called a wholesaler who knew of a walnut run being done near Nashville.  So I asked him to get the mill owner to do a hand sort for us, and of a 20,000 bdft run of walnut, they hand sorted the absolute highest grade stuff and ended up with 1,100 bdft for us.  When the wholesaler showed up, we again went through every board and we only selected 800 bdft of that.  So of a 20,000 bdft run, we got the best 800 bdft, which was the top 4%.  We paid him for it, no doubt, but it worked out $$ for both of us.  A had a phone call later from a customer who asked me how good our walnut was and I said its the best from here to Nashville.  He asked how I knew and I told him if there was any better, I would have gotten it, too.  :D :D :D

That's what I like about this Forum, there are top notch folks here who seem to be as crazy as I am. :D :D :D

 



 
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Offline Ron Wenrich

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Re: added price when milling from your own logs?
« Reply #29 on: April 22, 2019, 12:00:40 PM »
Actually, we did compete on pricing with the retail market.  You can't really compete for price in the wholesale markets, as the buyers mainly control the price.  Price comes into play when you hit the specialty markets.

My point is that the guy up the road charging $2/bf for trailer boards could get a comparable piece at our operations for 80/bf.  It may have had more knots, but the utility was still the same.  I've seen a lot of lumber bought by inexperienced buyers who buy grade too high for the job.  You don't need clean white oak for fence boards when a 3 Com is just as good for the job

You're simply replacing quality for price, but not from a manufactured standpoint.  It is a grade standpoint.  There are several ways to look at quality.  Utility should be a factor in pricing the job.

Never under estimate the power of stupid people in large groups.

Offline YellowHammer

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Re: added price when milling from your own logs?
« Reply #30 on: April 22, 2019, 01:08:56 PM »
Yes, thats where we dont compete with the bigger mills, dont even try, but work with and even sometimes, for them.  We dont sell trailer decking, barn packages, siding, fencing 2x4s or flooring.  If somebody comes in wanting those, I tell them we dont do that, but Im know a mill up the road who does and hand them their business card.  If they come in wanting to use our furniture cedar for raised garden beds, sure we will sell it to them if they want to pay the price but I tell them they can get a better deal buying low grade from someone else, and I give them a name.  By the same token, when someone comes into their place wanting high grade ready to work furniture wood, or a load of specialty wood kiln dried, in small quantities, they send them our way.  Not only them, but we get referral customers from quite a few retail hardwood outlets and home building shops from as far away as Chatanooga and Nashville, including some of the Big Box Stores.  Anyway, it works for us and our customers, and I even get invited to one of the local mega mills Christmas Dinner.        
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Offline John Bartley

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Re: added price when milling from your own logs?
« Reply #31 on: April 22, 2019, 02:44:57 PM »
Sorry I  guess I  didn't  explain I will try and do better the difference is circumstances you can charge as much or as little as you like if you are financially independent but some of us who raised our family travelling with a mill ( I  worked on the road for almost 10 yrs before woodmizer even gained popularity in our area Board Bandit was popular then ) so I  charged 30.00 /hr and then when other mills started charging 35.00/ hr and raised it along with my competition, when I  started selling dimension lumber from my own yard spruce and hemlock cost was 150.00 mbft and the price for sawing at the time was 100.00 mbft  so 250.00 mbft and the price changed accordingly , now considering that the population in my area was about maybe 1000 people in the area you could price yourself out of business one way or the other pretty quick so competitive pricing means just that priced according to market value and when your livelihood depends on doing business with the same people over and over you set a fair price so that they are happy and you are happy . Everybody happy good business, that's why we have " the another happy customer thread " which I enjoy reading.
I understand.   I guess my philosophy is different.  I know why people stay where they are and do their best to make a living, and I can say that living in a town with a declining economy and a population of under 5000 people.  This is my second time here.  I left to make a living because I wanted more and better for my family, and I gotta' say .... it wasn't fun for me to leave, but I did and I'd do it again.  I came back because after having busted my ass for 26 years in the "other" place, I can afford to not work.
It's just personal choices ....
Kioti DK35HSE w/loader & forks
Champion 25hp band mill, 20' bed
Stihl MS361
Stihl 026


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