Selling to the hard nosed type

[TomFromStLouis]

One of my few volume lumber buyers recently handed responsibility to a hard nosed my-way-or-the-highway type. When he asked what I wanted for QS oak, I mentioned that I had sold some for X and he responded that the market was really closer to 40% of X. I would profit at that level all the same btw. When I said that I just wanted to sell at 50% of whatever he could retail it for (he processes and retails) less a small charge for finishing the goods, he stated that he thought my method invalid and that if he could get a good price for something that it should be his profit.

My problem is that my young urban log reclamation and sometime lumber biz has not quite gotten momentum in selling lumber (although log sales are fine thankyouverymuch) and I would like to have this client. Yet I get neither fun nor much profit from him as he is. I will not likely change him.

How would you deal with this guy? It may be that my old contact gets back in the saddle a couple of years from now and may have even greater needs, so completely alienating the company will not work. Any thoughts appreciated.

What is a reasonable wholesale price for 4/4 rough KD QS white oak?

[CHARLIE]

In my opinion, this guy is a "I win, You lose" type of person. Good negotiations should end in a "I win, You win" with both parties feeling good about the deal. There should be some way that you can find what quarter sawn oak is wholesaleing for. Give him a price that you feel good about. Don't give him a price that makes you miserable. Usually, "I win, You Lose" type of people initially try to get something as cheap as they can at first shot, but when they realize you are sticking to your guns, they'll either deal with you or go find someone else to rake over the coals.

[Tom]

I can't be of much help on the price of the wood, but, I certainly have feelings on the business end.  It's your wood and your price is important.  You are the one that determines your break-even point and profit margins, not the customer.  He may like to buy for a certain amount but you are the one with the wood.   You determine your price and stick with it.  If it is fair, he shouldn't have a problem with it.  He may just want cheaper regardless of the price.  Tell him that's your price, period.  If you have figured in some leeway, you may want to give it to him but his wanting it cheaper isn't a good reason.

Here is an Aesop's fable that fits.  The punch line (moral) in the real world is a little different.and I'll share it if you want but you'll enjoy this version as well.

http://www.pacificnet.net/~johnr/cgi/aesop1.cgi?3&TheMantheBoyandtheDonkey

[DanG]

Bein' the stubborn ol' cussword that I am, I'd offer it for 110% of X, take it or leave it. ;D  Probbly wouldn't see him anymore, though. :D :D

If that's your truck in the little picture, put a couple mbf on it and bring it south.  You won't have no trouble getting rid of it, you just might have to tell folks what it is.

[Gary_C]

Tom
 
You should subscribe to a market report like the "Hardwood Market Report."  They can be found at www.hmr.com

Just remember that is for truckload quantities, less than truckload is more. They do not always report speciality grades like Q sawn but if you subscribe you can call for those prices.

[Fla._Deadheader]

   I love these guys.

  If your price is fair and your quality is top notch, I would NOT haggle with him, PERIOD. I always give my lowest price first. If they want to haggle, I go UP, not down. That will definitely get his attention.  ;D ;D

  If talks break down, call the company and ask what they are trying to do to YOUR business.

  If you are going to lose the account, go out fighting  ;) ;)

  I agree with DanG, bring 'er on down here  ;) ;D ;D ;D

[SwampDonkey]

Seems to me QS oak would be highly sought and demanding a good price. Is there a lumber market news letter in your state? Maybe surf the web a bit and you may find a newsletter in your region on prices. I'd follow the advise given as well. If you feel the lumber is worth a certain figure, go with that plus some margin for shipping and handling.  The one thing I've learned over the years is if these types of fellas are getting hard nosed they either don't have any trust in the producer or they have all they need and aren't likely to make you rich anyway. If you feel either is true it may be time to move on. ;)

[Norm]

I get rid of customers like this, they are not worth the bs.

When you ask about wholesale prices of qs how much volume per month are you talking?

[dewwood]

According to the latest Hardwood Market Report:

Southern Hardwoods:
White Oak Quartered
4/4 FAS $905, #1Com $710
FAS & 1F alone add $500
Appalachian Hardwoods
White Oak Quartered
4/4 FAS $1000, #1 Com $740
FAS & 1F alone add $500

These are for truck load quantities of rough green lumber.  I was not sure which pricing region you would fall in so I included both.  The overall trend in white oak is up which is fairly normal for this time of year.

Hope this helps.  It sounds like he is just trying to haggle you down to improve his pocketbook.  But armed with this information you have something to go by.

Good luck!
Dewey

[Kirk_Allen]

Never be afraid to FIRE a customer ;D  

Just make sure you do it politely and professionally. That way they can stick their tale between their legs and come crawling back.

Doing so may bring back the other buyer faster than you think.

[Curlywoods]

Tom,

  What did he offer you?  I buy our qtr White Oak in 4/4 thickness, FAS in the $3.00 bf range for KD, RS 1000 bf units.  I will always pay a little more if the sawyer is really good and provides really good ray fleck on at least one face.  The quality of the medulary fleck is what determines if we can sell it or not.  I always believe that I should be fair to my vendors.  If they supply me with good high quality woods that can be moved quickly at a better than average price, they will hold my long term business!  I need them and I hope that they want to sell to me too  :D
  Truckload quantities will drop the wholesale price down, but I doubt that it would drop more than 10% at most.  But there again we have never purchased truck load quantities of one single species in our business before.  In time I hope, but not yet.

[Cedarman]

Kirk has it right in my book. Always be polite and professional.  Also, you must know what your lumber is worth at the wholesale level by doing as much research as possible. To negotiate from strength you must know that range of price. We are talking a commodity situation here. Do you feel that you are in a niche market by dealing in less than truckload quantities?  Then you can get a premium by addressing the other needs of your customer, such as certain widths, lengths, timely delivery, and other needs of your customer.
My experience has been that when I let a customer beat me down, I dislike them and kick myself.  Also, if word gets out that you sell one customer at a different price for same goods, it leads to hard feelings.
If you lose this customer, how hard will it be to make up sales.  Maybe this is the time to really work on a new marketing strategy and use this setback as a chance to find new customers.
It ain't easy to change.
I lost a big customer over the fact that it took them 3 months to pay.  A year later, I do not miss them.
Good luck. Be firm.

[beetle]

I have no (zero) experiance with selling lumber, however, I have been in sales for 25 years with the same company.

NEVER EVER purposely alienate a customer, like him or not. Things may not work out on this deal and that's ok. They do not come crawling back .... period!

My experience with these types are they just want something so they feel they have won. If your price is fair for the market value and you have to stick with it, then do so. But, if you want his business, then make him feel like the winner of the negotiation and give him something of value to him.  I cannot tell you what that is, a good salesman has to figure out what that is.

My 2 cents worth.

Jeff

[rebocardo]

I sold cars for a few years at dealerships (dozens a month) and I still fix them up and sell them. You always run across the hard nose type with either no money or looking to steal something that enjoys making other people miserable like themselves.

My advice is sell it for the price you need to make a nice profit and when dealing with this person charge more so you can come down more. Some people you charge $1600 so they can beat a 30 year old car to death with every complain and they end up paying the same $800 you would have quoted to a normal person that did not open their mouth with a complaint before they even said good afternoon.

Smile the whole time while taking their money while thinking of the profit you made, that takes the bitterness out of it for me   :D

The "I win, you lose" is a typical Walmart approach.