Values question

[Frank_Pender]

  I had a call two days agor from the county mechanics shop.  They needed a special dimension piece of Oak for their Lowboy trailer.  the board had to be 2" thick x 7 1/2" wide x 12' long, as soon as possible.  I responded by saying "Would an hour be ok?"  I knew the answer, or course.  I found a log in the deck to cut the board.  Of course there were going to be a few (3 or 4) boards aside from the specific on needed.  I cut them 5/4 x 6 x 12' .  the log had to be trimmed from 16' to 12' .  I lost 4' of material for lumber.  But it does burn.   The board had 15bdft x what I normally charge for green Oak is Equal to $29.95.  I said I would also deliver the board as I was headed to town, anyway.  Distance to county shops is 7 miles from my farm. I would be getting the board to them within the hour I had mentioned earlier.

 You have the background, now what do I charge for the for
the board?   I await your responses with some trepedation as I have already hanbded them the bill.

[Jeff]

I dont know what you would have charged, but here is how that would have worked at our mill.

First we would not charge for the cut off portion unless we had said, the only log we have is 4 foot longer then you need and they said they would pay for the additional length. If it was innitiated by us, not fair to charge them for the drop.

We get .45 cents a board foot for oak blocking material. Stuff suitable for a deck board or a dump truck side board.  

2 x 7.5 x 12 1pc(s) @450/Mbf =15B.F.  $6.75

We don't deliver, but on occasion one of the guys or the boss might if we are "on the way to town" or "going by there anyways". If we volunteered to drop it off, No Charge.

So the bill would be $6.75

[Ron Wenrich]

I think we're more at the 600/Mbf level on our oak decking and the like.  I usually make them a little better than blocking.  We don't even charge $2/ft for our clear oak lumber, let alone decking.

We don't charge for side boards, as we normally have other markets.  Even off species like locust where the other market is pallet stock.

Extra length is usually no charge.  But, normally we wait to cut orders when we are cutting that length of log.  We usually want 10 days on large orders, but can sneak a log in in a couple of hours if the order is really small.

[Jeff]

The only time we get 2 bucks a foot would be in the veneer logs that we dont cut. We don't sell any white oak grade because of the lack of availabitlity in our area. We just dont get enough of it to market it. So if we get white oak logs, we usually save the good ones for decking and side board orders. Still .45 a foot. But some times clear.

I would say the creme of the crop FAS Northern Red Oak brings around $1.45 on average.

[Tom]

I had an instance like that last year.  A customer called and wanted 3x8's.  I was cutting in another town for a man who had some good good pine. I charged .75 cents a foot for the beams and gave 50 cents a foot to the log owner.  I delivered the beams and got 25 cents a foot for sawing and driving. It was only about 5 miles out of my way anyway.  I was getting 20 cents a foot to saw and made a nickel a foot on delivery so I didn't do bad. they don't know each other and I won't introduce them.  We are all happy and I'm a hero. :D

I get 60 cents a foot for pith cracked oak or heavy knots and a dollar a foot for good decking material. Those are the prices I would charge if he came and got them.  Sometimes delivery is just good advertising.

Government organizations have a short memory and no loyalty though. I have produced boards for the division of forestry, had them sit, piled, on their lot for 6 months in the sun and heard later that they complained to some of my customers about the crooked boards I took them. If there is a next time, it may be 5 dollars a foot.

I guess a lot depends on whether the material they want is plentiful in the area.  We don't produce much "good" oak.  If you want oak it's going to cost.

[Frank_Pender]

Thanks for the reponses, fellas.  I have, since Friday, spoken with a number of people, all the way from lay people to building contractors.   The prices they relate, range from $50 to $100.  One building contractor said that if he had ordered such a board he would expect to pay at least $100.  Another person who is a state government employ also though $100 would not be too far out of line.   By all of your responses I am charging way to much for my oak. ???  I will re-examine my pricelist.

[Jeff]

Frank, I would not attempt to say you are charging to much for your oak. We are in a prime oak area. What we charge is probably par for the course in our area. Supply and demand. The boss got caught a few weeks ago. took an order for some 15 foot oak 2 by 4s. Could not get the logs in time so he had to call another sawmill and ask about buying logs. The guy and Ray arnt the best of buds, and he new he had ray in a spot where he could charge more. Charged him $350 a thousand for old dried up nasty logs that we would usually buy fo 180 to 200.

[Tom]

Frank,
Without hurting myself, I try to charge for the "come back" rather than for the sale. There are other mills in the area that retail their mill-run for a lot more than I do.  I make it clear that I saw wood not sell it and am not interested in competing with the other local mills. I still have sawing customers that would rather buy from me if I have it and I try to keep them happy.

I get around throughout 6 counties and know which farmers have what wood.  That helps too.  I keep little inventory.

I never really thought about it before now but I guess I'm a "middle man".  :D :D  
Oh Lord, what's become of me. ??? :-/ :P

[DanG]

Why Tom, you old dawg. I didn't realise we had a middle man in the middle of us! :D

I agree that charging for the "come-back" is a good business strategy, from the advertising standpoint, but at some point, you have to charge for the sale.  Your business seems to be more "service oriented", than most of the folks here. That seems to work well for you, and fits in with your overall philosophy of life.  

Assuming that my own little business ever gets started, I intend to set fair and honest pricing policies, so that the customer gets a good deal, and I make a little money. I realize that I will not make a big profit on every board, but I will get a little bonus, from time to time, like Frank did on this deal. I think that, as long as the customer is happy with what he got for his money, all is well.  I suspect that he knew he would pay a premium for an odd-sized board, on short notice, and is bragging to his friends about what a great sawyer he has.

Frank, if you butchered up a log and made firewood of the rest of it, just for this guy's board, you are totally justified in charging him for the whole log, in my opinion.

[Tom]

Well put and well placed, DanG.  If I were to be here in my front yard waiting for a customer to come buy my wood I would keep a little sharper pencil too.  Because I have access to multiple species, folks will often call me  in their search.  The other mills will even guide them my way.  I could  take advantage of it and charge more but like the idea of being the "circuit sawyer" best.  Yep, I agree that Frank's in a position to charge whatever he can get  if that's his business.  Some folks charge what the market will bare and judge it by what clothes you have on and what you are driving.  That kind of price adjustment is not fair, in my opinion.  Somehow, I don't picture Frank as deliberatly abusing a customer.

[Bro. Noble]

Frank,

Here's another way to look at it.  The value of the wood is the same for that coustomer as any other----whatever the going rate in your area is.  In our area it would be about 45 cents a foot.  BUT, for me to do what you did, I would have to remove whatever was on the saw, empty the log deck if a suitable log wasn't next, find a log and load it etc.  A very common hourly rate for sawing is $50, thats what I charge on the rare occasion that I do some kind of special work.  You said you had the board delivered in about an hour.  Looks to me like what you did should be worth an hours labor and the value of the wood.

Noble

[CHARLIE]

I ain't a sawyer or a logger or a forester but I know what kiln dried oak cost per board foot. I would not expect to pay the same for green oak. If I was willing to pick it up and the sawyer said he was coming to town anyway, then I wouldn't expect to pay for delivery. I would expect to buy him a beer or a cheap lunch maybe.

Out of curisousity. Why did you lop off 4' of the log. Why didn't you cut all the boards to 16' and then just lop off the one they wanted to 12'?  A lot less waste it would seem.

[Paul_H]

I think the supply and demand comment holds true.This spring we had to replace the boards between the bolster and frame on our log truck.We had to buy two, 2x10 x12' clear,rough green, oak boards through a lumber yard.

The price- $120 US.

[Frank_Pender]

Get your order together, Paul.  When you come down in November I will have it for you at half the price.   ;)  Yes, Tom. I am somewhat like yourself in acting as a clearing house for lots of people in my region.  Sometimes as far away as Central Calif. to Northern Idaho and Washington.  DanG, I thought somewhat along the lines you were aluding to.  I charge $55 and hour for  special sawings of peoples logs.  Most of my customers have lumber or logs sawings far in excess 1,000 bdft at a time.  Different species different costs due to difficulty in sawing or effort for the saw.  I often find myself doing such as Tom was speaking to earlier, giving much of what I do away to my customers.  This last year the mill produced several thousand dollars for various groups or foundations.  But, at the same time I do not feel that I have to make up those gifts with the dollars from the paying customers.  It often becomes a tightrope act in not giving the farm away as well as the lumber that is produced here.  

[Frank_Pender]

Sorry, Charlie.  I missed responding to your question.  The main reason for lopping off the smaller diameter end of the log wasdue to it not being able to provide the primary board needed. :'(

[ADfields]

I'm with Noble on this.  After you take it all apart to cut this 1 stick you got to put it all back so I would charge a 1 hour minamum just to set up the cut.   And still charge for the wood but the ride to town would just be pr if thay did not ask for it delivered.   After all my years in the heavy towing business I am very shocked to not see everyone saying X minamum time + matirals.  In towing noone will start ther truck for less than ther minamum charge and I wont with a swamill eather!   Now as a guy that had the trucks siting ther and a driver picking his nose till a part came in I would be very glad to pay for the good service Frank gave!   Jeff are you saying if I walked in your office and asked for an odd size stick that you would need to change everything all around to cut for me on the spot (under an hour) that I would walk out of ther with my wood for under $7?   I think what Frank sold was a service not just the wood and a good service is very hard to come by in this day and age.
Andy

[Jeff]

We would not have to change anything. I can cut my log deck off in about a half hour Max. The debarker operator can load a log from either end of his, so he could put on the right length log ahead of what is on already. I could have a special log to me within a half hour. a minute or 2 to cut and yes, 6.75 for that board.  If we happen to be cutting the right length and species when someone comes in it is cut within a couple minutes.

This is the only way we custom cut. We do not cut someones logs.

[woodmills1]

lucky I don't have to buy much in oak logs, but when I do the white ranges from 60 to 80 cents per board foot and red from 80 to a dollar.   some recent prices I got for cutting include: a dollar a foot for trailer decking 2 by, $1.25 for 1 x 6 x 16 horse fencing, $1.67 for 2 by 12 foot random widths over 7 inch, and $2 for true quartered.  All of these were picked up except the random width 2 by.  By the way these are all repeat customers who don't complain about the prices.  So yes I think your region matters.

[Bibbyman]

We try to make a profit on everything we do but sometimes we also feel the need to be "of service" to our other local business people, neighbors and good customers.  So when they need something like this, we'll jump in and get it for them if we can.   Normally our charge is modest for all the aggravation it causes but it builds good will and has brought us more business.  

I have found that there are a few people who will always operate on an emergency basis and even then will argue price.  After a few times dealing with them, the next time I tell them I can't help them.

I've also had cases were we've cut out a couple of boards (always to a special size) for a deck and have the guy show up to get it and then want 40 more just like it as soon as we can saw them.  They've decided they may as well replace all the boards as replace only a couple.  Of course,  they've already torn the old deck out.

I can think of only one time where we kind of priced a special order plenty high.  It was something for a government forestry agent.  ;D

[Frank_Pender]

Bibbyman, I might well do the sme thing for the same sort of person, depending on how they have been leaning with the state legislature or other bureaucrats.  But for me most of the fellas around here with the state have either been one of my students or the parents/spouse thereof. 8) 8)

[Ron Wenrich]

If somebody needs a board that bad, I can put a log directly onto the carriage without being debarked.  I've sawn some while the customer waits.

A few months ago, we had a major storm come through and took out buildings.  The next day, carpenters were at our mill wanting odd sized lumber.  Too bad we were shut down for the day.  We sent them to other mills, who probably didn't charge much more than us.  They gave us another order just the other day.

I guess you can say the value of anything is what a willing buyer will pay a willing seller.  I've seen lots of overpriced timber get sold that way.  As long as that's what the market value is in an area, so be it.  But, don't be surprised if someone can undercut your market base.

Frank:  what's the price of sugar pine in your area?  I was told by a pattern maker it was $3.50/bf when he could get it.  He could buy mahogany cheaper and of a better quality.  He now buys tulip poplar from us at $.80 and then he gets it kiln dried.

[Tillaway]

Ron,
Frank has to come down here to get Sugar Pine, not much of it in Oregon.  I can only guess what the logs are but they are usually a little higher than comparable Ponderosa.  Probably around $500 to $800 MBF delivered for logs, but it's only a guess, we haven't had any to sell in a while.

[Frank_Pender]

When I do get the Cartwright trees around here, They almost pay me to take them.  I got two a month ago for free.  They totaled about 1,000 bdft log scale .  I have yet to saw them as i am wanting to spalt or provide me some "blue pine" lumber.  I can sell it for a higher price.    ;D

[C_Miller]

As far as selling the board goes if it was me I'd have charged $12.00. It was an "emergency" and interupted normal way of doing business so $1.00/bf is not to much and seeing how it was the County it wasn't too little.

The next thing to consider is the advertising that got done. It was delivered when you said for a fair price. And if there is one thing a county worker can do better than lean on a shovel its talk. To each other,friends and folks in the community. and they will tell them how you did business and how you treated the county in a fair and business like manner.

[FeltzE]

We have sold ungraded hardwoods straight off the mill at .75 bd ft. which makes it a $11.25 stick of wood. But there is something to be said for delivery, ...  : $50 and up around here for delivery, expect the company to send someone over to pick up your wood they will spend it in labor and milage anyway. So maybe $25 total on their doorstep?

Hey whats the deal about markup?  

Sawmill... for say...$200/mbf for a customer (I get 175) :'(

Buy logs  ... for say... $350/mbf

Lumber is now worth $550/mbf  

Sort for grade (adding in labor) increases some of the lumber value and decreases other lumber value, but it should give you an overall increase in value  :

Retail KD #1(clear) P4S Oak in our area is around $5/ft  8) But that includes a retailer, trucking, planermill operations, Drying, sorting, etc....

I rarely sell a product that will accurately compare.

I would enjoy hearing your comments   :P

Eric