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Author Topic: What to charge?  (Read 1221 times)

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Offline Cartwright

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What to charge?
« on: September 11, 2019, 10:39:38 PM »
I've got a customer needing a 11" X11" X 18' white oak beam and was wondering what y'all would charge for something that size?  It would take a good size and straight log for this! 
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Offline Southside

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Re: What to charge?
« Reply #1 on: September 11, 2019, 10:52:41 PM »
Will the beam be graded? I did some 18' WO flooring earlier this year for a custom home and charged a premium over my normal rate and it still wasn't enough. 
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Offline Cartwright

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Re: What to charge?
« Reply #2 on: September 11, 2019, 10:59:14 PM »
SS, yes I'll be grading it. NHL rules. It's for a sill under a old home this guy is restoring. 
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Offline WV Sawmiller

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Re: What to charge?
« Reply #3 on: September 11, 2019, 11:05:19 PM »
   Would you be providing the wood or just doing the sawing? I'd figure on needing at least an 18" SED log to get something like that if it was perfectly straight and I'd feel more comfortable with one 20". Do you have trees that size you want to cut or would you have to buy the log? I'd probably saw it for about $100 but I'd want an additional $200 or more if I had to provide the log and even more if any handling and transportation was involved. BTW - I would not cut one of my white oaks for that - they are worth more to me for wildlife but that is just me.
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Offline Cartwright

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Re: What to charge?
« Reply #4 on: September 11, 2019, 11:48:56 PM »
I've got the logs. I try to keep some 20' logs for trailer decking but this is the first for something this size. 
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Offline SawyerTed

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Re: What to charge?
« Reply #5 on: September 12, 2019, 07:55:21 AM »
My minimum on something like that would be $275.  Thats my board foot charge plus handling for the additional length and thickness. 
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Offline Cartwright

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Re: What to charge?
« Reply #6 on: September 12, 2019, 08:25:14 AM »
ST, that's exactly what I came up with. We'll have to get together sometime. Your not far from me at all. I'm thinking your about an hour west of me. 
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Offline WDH

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Re: What to charge?
« Reply #7 on: September 12, 2019, 08:49:38 AM »
In my opinion, $275 is a little low.  That is 182 bf.  Around here, 2" white oak decking goes for $2.50 off the saw.  That is the alternative use. If I did it, it would be 182 bf x $2.50 = $455.  Don't sell yourself short, that is a one of a kind item and you will not find it at Walmart or the Box stores. 

White oak lumber is the 2nd highest value domestic hardwood in the wholesale commercial market.  Walnut is the most valuable.  If you look at an index of value using last week's Hardwood Market Report selling prices for rough kiln dried FAS grade for the Appalachian area, and you peg the walnut price as 1.0 then here are the value ratios:

Walnut         1.00
White Oak      .63
Soft Maple      .49
Hard Maple     .47
Cherry            .44
Hickory           .40
Ash                .39
Basswood       .33
Yellow Poplar  .33
Red Oak         .32

White oak is a third more valuable than cherry (.63 divided by .44).  Red oak and cherry are in the tank because of the tariff war with China.  They like the red woods.  Exports are down by 47% and this has crushed the cherry and red oak markets.  White oak was never a desired Chinese export.  However, a good bit goes to Europe for wine and spirits barrels.  Also, the fire at the Jack Daniels distillery burned up thousands of white oak whisky barrels that have to be replaced. 

I realize that most of us are not selling tractor trailer load quantities in the wholesale market, but it is smart to understand the market forces and the market prices.  You would not sell your house for a good deal less than the market prices, would you, so why would you do that with your lumber?

I see on Facebook marketplace a flood of lumber for sale from small time hobby sawyers that are selling the lumber dirt cheap, probably for beer money.  Most of it is not dried, and even less is kiln dried or surfaced.  That sure does not help someone like me who is trying to supply a high  grade, professional product. 

I use the Hardwood Market Report to price my lumber.  I do not use the wholesale prices as I am selling retail, but i use them as a guide to figure out what I need to charge if I purchased a tractor trailer load of the lumber, had to maintain equipment and facilities to unload and store it and plane it and inventory it and suffer any degrade or processing loss and spend the time to meet customers and sell it, even as little as one board at a time.  This is similar to the way that other retail businesses operate. 

People go to stores every day and buy products.  The prices for those products are based on what is required to build and support a supply chain, pay for infrastructure and logistics and people, and to provide a return on the investment to make the products convenient and available.  To my way of thinking, lumber is no different.  I am not Lowes or Home Depot, but I am not a charity either.

Sorry about the rant.  Pricing lumber is an important subject to me. 
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Offline SawyerTed

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Re: What to charge?
« Reply #8 on: September 12, 2019, 02:13:52 PM »
If you can get $2.50 a board foot, your market is different than mine.  I could price white oak at that price and it would never sell.  Markets are different. 
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Offline alanh

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Re: What to charge?
« Reply #9 on: September 12, 2019, 04:52:28 PM »
Im just a newbie hobby sawmill guy but have been self employed in a retail/construction type business all my life (pools). people are usually willing to pay for what they need and cant find at the box store or Amazon,  I also get 2.50 bdft for white oak trailer decking. oversize stuff like that in these parts goes for a premium. Not to many sources for a 20" diameter 20ft long strait white oak logs available. I feel thats low but as mentioned, I`m a newbie

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Re: What to charge?
« Reply #10 on: September 12, 2019, 05:52:25 PM »
Soft Maple      .49
Hard Maple     .47

Sorry for the off topic question but why would soft maple be more valuable than hard maple? Out here, soft maple has no real value other than pulp.

Offline Southside

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Re: What to charge?
« Reply #11 on: September 12, 2019, 06:56:28 PM »
With something odd like this you need to allow room for the Dang factor. Meaning there is a significant hidden defect at 18'4" that makes your 20' log now a 16' log and you have already lost 25% of your gross potential.  I am with WDH and come in at $450. 

If you don't make a profit on a sale you are one step closer to going out of business.  Ask yourself, who else is going to saw this order. If there are 4 other mills, then so be it, let them take a razor thin margin on a big risk and stay busy with what is profitable. 
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Offline Brad_bb

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Re: What to charge?
« Reply #12 on: September 12, 2019, 07:14:48 PM »
For that use, you don't want any sapwood on it, hence why I think you guys are suggesting a 20" dia.
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Offline E-Tex

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Re: What to charge?
« Reply #13 on: September 12, 2019, 08:07:44 PM »
agree with alanh, SS and WDH

$450 to $500 makes sense to me.
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Offline Cedarman

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Re: What to charge?
« Reply #14 on: September 13, 2019, 07:09:59 AM »
If you can solve a problem for a person, you will make them very happy.  If you say yes , you can saw the beam, you have lowered their stress level considerably.  If they are not happy with the price, ask them where they can get one at less cost.  It is a rare person that wants the stress of finding another solution when the solution is at hand.  I have found that their response to be, "Sounds fair to me, when can you have it, do you need paid now".  They want to lock me in.
If you are not happy doing a deal, it will make you sad when you do it.  Tomorrow you will go from sad to mad.  Make sure the price you charge will make you happy on these one of a kind deals.

Danny hit the nail on the head.
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Offline WDH

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Re: What to charge?
« Reply #15 on: September 13, 2019, 08:15:54 AM »
Sorry for the off topic question but why would soft maple be more valuable than hard maple? Out here, soft maple has no real value other than pulp.
As I understand it, cabinet makers really like soft maple and furniture makers prefer soft maple for the internal parts or hidden parts in furniture like couches, sofa's and other items like that.  Here is the Hardwood Market Report comments on these two species from last week:

Soft Maple:  This species has gained market share of cabinet production the last two years and shows no sign of losing ground.  Cabinet and cabinet component manufacturers are assertively purchasing soft maple.  Most are getting enough to meet current and near term needs, although some are not.  Demand is also decent from distribution yards.
 
Hard Maple:  Markets for hard maple are not performing badly, but neither are they particularly strong.  Sawmills have produced more hard maple lumber than usual this summer to avoid other species that are difficult to sell and price sensitive.  The higher rate of green lumber production has transitioned into and through the kiln drying process; more kiln dried lumber is now available for sale.  However, end users and distributors are adequately supplied with kiln dried hard maple and buying at a controlled pace.  Prices in observed business have gradually trended down.
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Online Bruno of NH

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Re: What to charge?
« Reply #16 on: September 13, 2019, 10:21:04 AM »
WDH
That's what has happened in my area hobby sawyers flooding the market with wood. 
They are selling below what it cost to buy the logs. 
Very hard maintain a sawmill yard and stay in business selling for that.
I outlasted all the night by fly builder's when they did this stuff over the years , I'm going to try and do it sawmilling. 
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Offline SPDM

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Re: What to charge?
« Reply #17 on: September 13, 2019, 10:26:00 AM »

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Re: What to charge?
« Reply #18 on: September 13, 2019, 03:30:54 PM »
The clear, big white oak I bought this week, suitable for quartersawing (or graded beams) were $1.85 on the log.

As said, high grade white oak is second only to walnut for log price.  

$2.50 per bdft for clear, green beams is a very fair price, in my mind.  Personally, Id be higher, probably $2.85.  

Personally, also, due to insurance and safety issues, we wouldnt saw it out anyway, as we dont have the capability to certify and grade lumber for inhabited dwellings.  If its not graded, it wont pass inspection, if his county requires it.  

Customer satisfaction would also be an issue.  The beam is sure to crack, and the customer will not like it, even if they say its OK.  Just this morning, I was called by a guy who wanted a (coincidently) large white oak stair case support post cut for him, because he just had a nearby sawmill do it and within a short time, the post cracked horribly.  So he is upset at the other place, trying to get his money back from them (I laughed at that one) and then he asked me to do it.  So my answer was Nope.
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Offline Don P

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Re: What to charge?
« Reply #19 on: September 13, 2019, 04:02:12 PM »
And to reiterate about the grading, NHL grades are far different than stress grading. If the inspector is doing his job your grading won't cut it. Hopefully you haven't said you would provide grading. 11x11x20' SS, are you aware of what you are agreeing to provide?
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Offline Cartwright

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Re: What to charge?
« Reply #20 on: September 13, 2019, 04:41:46 PM »
Thanks for all the information about this. I got the logs for $200 a thousand and it's going under an old stage coach depo  so the grading aspect is just to be structurally sound. No inspection on it either so $1.50 a board foot don't seem bad to me. I just feel sorry for the man that's got to put it under the building. Man told me it's sitting on a rock foundation really close to the ground. 
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Offline Don P

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Re: What to charge?
« Reply #21 on: September 13, 2019, 05:07:06 PM »
 :D That's generally my job.
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Online Bruno of NH

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Re: What to charge?
« Reply #22 on: September 13, 2019, 07:57:40 PM »
I did stuff like that for years loved the challenge and the feeling when the job was finished. But thats one reason I have no knees.
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Offline Don P

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Re: What to charge?
« Reply #23 on: September 13, 2019, 10:05:04 PM »
Or shoulders.
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Offline Peter Drouin

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Re: What to charge?
« Reply #24 on: September 14, 2019, 06:39:48 AM »
I pay .40 a bf for the W Oak when I can get it and sell for 2.00 a bf green off the mill with 3" knots in it sometimes. 
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Offline Cartwright

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Re: What to charge?
« Reply #25 on: September 14, 2019, 11:53:39 AM »
Now I have a man that wants some 1x14x17' cedar. I told him that wasn't going to happen. Lol
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Offline pine

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Re: What to charge?
« Reply #26 on: September 14, 2019, 01:55:44 PM »
 I got the logs for $200 a thousand
I presume that is $200 per mbf when you write $200 a thousand.  If that is correct I wish I was in your area for buying but glad I am not for selling purposes. 
Utility grade conifer averages $254 mbf out here.
Maple $413/mbf 
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Offline scsmith42

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Re: What to charge?
« Reply #27 on: September 14, 2019, 04:53:56 PM »
In my opinion, $275 is a little low.  That is 182 bf.  Around here, 2" white oak decking goes for $2.50 off the saw.  That is the alternative use. If I did it, it would be 182 bf x $2.50 = $455.  Don't sell yourself short, that is a one of a kind item and you will not find it at Walmart or the Box stores.  

White oak lumber is the 2nd highest value domestic hardwood in the wholesale commercial market.  Walnut is the most valuable.  If you look at an index of value using last week's Hardwood Market Report selling prices for rough kiln dried FAS grade for the Appalachian area, and you peg the walnut price as 1.0 then here are the value ratios:

Walnut         1.00
White Oak      .63
Soft Maple      .49
Hard Maple     .47
Cherry            .44
Hickory           .40
Ash                .39
Basswood       .33
Yellow Poplar  .33
Red Oak         .32

White oak is a third more valuable than cherry (.63 divided by .44).  Red oak and cherry are in the tank because of the tariff war with China.  They like the red woods.  Exports are down by 47% and this has crushed the cherry and red oak markets.  White oak was never a desired Chinese export.  However, a good bit goes to Europe for wine and spirits barrels.  Also, the fire at the Jack Daniels distillery burned up thousands of white oak whisky barrels that have to be replaced.  

I realize that most of us are not selling tractor trailer load quantities in the wholesale market, but it is smart to understand the market forces and the market prices.  You would not sell your house for a good deal less than the market prices, would you, so why would you do that with your lumber?

I see on Facebook marketplace a flood of lumber for sale from small time hobby sawyers that are selling the lumber dirt cheap, probably for beer money.  Most of it is not dried, and even less is kiln dried or surfaced.  That sure does not help someone like me who is trying to supply a high  grade, professional product.  

I use the Hardwood Market Report to price my lumber.  I do not use the wholesale prices as I am selling retail, but i use them as a guide to figure out what I need to charge if I purchased a tractor trailer load of the lumber, had to maintain equipment and facilities to unload and store it and plane it and inventory it and suffer any degrade or processing loss and spend the time to meet customers and sell it, even as little as one board at a time.  This is similar to the way that other retail businesses operate.  

People go to stores every day and buy products.  The prices for those products are based on what is required to build and support a supply chain, pay for infrastructure and logistics and people, and to provide a return on the investment to make the products convenient and available.  To my way of thinking, lumber is no different.  I am not Lowes or Home Depot, but I am not a charity either.

Sorry about the rant.  Pricing lumber is an important subject to me.
Very well written Danny.
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Offline scsmith42

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Re: What to charge?
« Reply #28 on: September 14, 2019, 04:55:37 PM »
Thanks for all the information about this. I got the logs for $200 a thousand 
Id happily buy a full truckload at that price!
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Offline Cartwright

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Re: What to charge?
« Reply #29 on: September 15, 2019, 11:18:45 AM »
The $200 per mbf is what I pay for these farmers and tree service guys cause the chance of metal. Price around here now for decent white oak is in $400 to$500 per mbf. 
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Online customsawyer

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Re: What to charge?
« Reply #30 on: September 15, 2019, 12:19:14 PM »
If I was selling this timber it would be $3.25/bf. For 2X white oak for flooring trailers I charge $2.50/bf. Anything over 16' in length gets an additional $0.25/bf for each 2' of added length. Anything over 10" in width gets an additional $0.25 and I would add another $0.25/bf for the thickness. So if you add everything together I would be at $3.25/bf. There would be a strong chance that I would add another $.075/bf. just to make it a nice round number (also to insure that I wouldn't get the job, but if I did, I would get paid). Then you would have to make sure that the customer knew the risks they are taking using a green timber under the house.
How much is the house going to settle as this timber dries and shrinks? I don't want to be liable for that kind of repair bill.
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Last post April 12, 2016, 12:52:30 PM
by Andries
xx
What to charge???

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2386 Views
Last post March 29, 2005, 10:26:44 PM
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xx
How to Charge

Started by tallguy on Sawmills and Milling

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what to charge??

Started by JamieT on Sawmills and Milling

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Last post February 25, 2014, 10:30:26 PM
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