Selling wholesale to woodworking stores?

[schwanee]

Do any of you guys sell your slabs wholesale to woodworking stores such as Woodcraft, Rockler, or hardwood lumber suppliers?

I saw urban logs and am considering whether I should only sell retail to individuals or selling wholesale where I can. Most of what I am milling is slabs.

I would guess some of you guys have either had conversations with these stores, so what are your thoughts?  I'm curious what kind of pricing them would expect when negotiating.

Thanks for any input. You guys have been a great resource for the young and new fellas out there like myself.

[sealark37]

I think that you will have to start your relationship with woodworking stores on a consignment basis.  You deliver the slabs to the store, they mark them up to retail, and pay you wholesale after the slab is sold.  Your deal after that stage depends on their demand and profit margin.  Keep in mind that the dealers think that you got the slabs for free.  Any drying defects that surface after delivery will result in less money for you.   Good Luck, and Regards, Clark

[WV Sawmiller]

   Concur with sealark's but IMHO consignment is not a bad deal if you are dealing with a reputable store/operation. A big factor for slabs is storage space. If they are out on consignment they are stored at your partner's place not yours - which may be a real good thing.

    I have logs ready to cut but am waiting on a custom order or storage to free up. Every item I can move from my home storage to a consignment partner gives me that much more space here. Keep in mind you probably need to keep a good variety in both places so people can compare.

   I deal in a small way with a local lady who has a craft and antique store and I take her a few benches of different styles. They are not in her way as she displays other things on them but they are out of my way so I can make and store a few more and it works good for both of us.

[drobertson]

Kiln dried?  Green?   It is an ambitious goal,, but from little I know, it border lines on JIT and meeting many specific requirements,, so really hoping your goal can be met,, I don't believe in luck.. Its just hard to get in,

[low_48]

Woodcraft stores are franchises. Not sure how the franchise fee applies to supplies purchased locally. I would think kiln dried would be a necessity. The store sure would not want to sell something that has not been sterilized.

[PA_Walnut]

Each Woodcraft store can/does purchase their own material. (or at least used to years ago).
I've sold to them in a past era...they order, I deliver, they write a check. Speciality material does well. Commodity lumber is overpriced, so doesn't sell well/

[schwanee]

Great info! We don't have a kiln yet, although it is in the works. Right now we are taking our slabs elsewhere to get dried. Chatting with the employees they seemed receptive to the idea and did say that they are franchised and order their own product.

[longtime lurker]

Dunno much about the particular stores you refer to for obvious reasons but I do know about selling wholesale. So heres the thing...

Lot of little mills dont like wholesale because the argument is that they cut a board and sell it to the wholesaler for 70c when they could of sold it retail for $1.00. its a valid argument, because the reality is that the wholesaler has to be able to on sell at a profit and he has to compete with the retail guys so he cant sell it for $1.30 if its only worth a dollar and he needs a margin of 30% to cover his overheads. And people look at that and say well why should I sell my board there for 70 cents when I can skip the middle man and make a whole buck instead.

And yanno... in some cases thats pretty hard to argue with, particulary when the mill output is small and its a part time operation. But as you grow it changes.

See I love wholesale buyers... they make my life simple. Today I have to oversee a harvest to keep logs up to  the greenmill. I've got a greenmill to operate. I've got a drymill that requires some time. Someones got to keep all this old junk running. Theres a business needs administering. And a wife and two kids that want some time too.

What I dont have is any worry about what we're going to cut next, or who might buy it, or where the next buck is coming from. All I got to do is kill tree, carve tree into boards, sometimes dry boards, and ship them. By selling wholesale I get volume orders with realistic lead times from industry professionals who pay me on time. I dont have to deal much with customers. I dont have to spend my time explaining myself to people who dont understand the realities of wood. I dont have to put up with people wanting to argue with me about price because they can get it down the road from some other mill cheaper. I dont even have my number in the phone book or a website because I got more work then I can handle already.

My wholesale guys do the retail stuff. They got people to answer the phone and quote jobs and deal with walk ins and do custom millwork. And they're big enough that business finds them rather then having to find business. That last translates to orders, which is work for me that means that even though we might make less margin on a board then a mill selling retail - we sell a whole lot more boards.

The other business case for looking at wholesale marketers is that what it has allowed me to do is concentrate on building a sawmilling operation (and a logging operation to support the sawmill) without having to worry about building a sales and marketing organisation to keep cash coming through the door to pay for it all. I got 2 customers I got to keep happy and my business is viable. I jump through hoops to keep them happy but thats part of the deal. Anything else is cream.

Keep your product standards high. Your wholesale customer can buy boards from anywhere and he needs quality to enable what he buys to shift. Colour and grain are gods business but you got to make sure that your end of the deal - dimensional accuracy and straightness, moisture content and packaging and handling to get a good product to the shelf - is as good as or better then everyone elses. Too many little mills use being little as an excuse for being mediocre and you just can't do that. You need to go the other way - being small allows us to operate to a standard that the big guys can't. It's the difference between "backyard"and "boutique".

Never forget that your wholesale customer has to be able to make a living too. That doesnt mean you got to sell cheap but it has to become a mutually symbiotic relationship where everyone gets to make a buck. He's not a parasite whos taking the cream off your product margin. He's the partner who handles your sales and marketing and billing and chases up business and guarantees payment and does a whole heap of stuff that allows you to concentrate on being a sawmiller not a salesman. He deserves to get paid for that, and cover all the things he needs to along the way to keep him viable.

Never quote a job cheaper then your wholesaler can supply it at. I refer any enquiry from outside my immediate local area to my wholesale guys. I trust them enough to talk with them "did you quote this job" "call this guy". Set your own retail price on par with or above his.

Deliver on time. If that means long days and late nights sometimes well thats part of the price you pay. He needs on time delivery to his yard to get on time delivery to his customer and if he dont deliver on time... well in this industry thats a good way to loose business to someone who can. When he loses business, you lose business.

Long post but you need to get your head around what it is you're looking at doing, which is stepping away from being a retailer with a saw and becoming a small production mill. It's a very different mindset but if you can get it to work for you it can also be... maybe not lucrative but it can supply the kind of steady cashflow that is necessary to build a profitable business.

[4x4American]

Awesome synopsis, longtime lurker! 

[PA_Walnut]

Never forget that your wholesale customer has to be able to make a living too. That doesnt mean you got to sell cheap but it has to become a mutually symbiotic relationship where everyone gets to make a buck. He's not a parasite whos taking the cream off your product margin. He's the partner who handles your sales and marketing and billing and chases up business and guarantees payment and does a whole heap of stuff that allows you to concentrate on being a sawmiller not a salesman. He deserves to get paid for that, and cover all the things he needs to along the way to keep him viable.

Never quote a job cheaper then your wholesaler can supply it at. I refer any enquiry from outside my immediate local area to my wholesale guys. I trust them enough to talk with them "did you quote this job" "call this guy". Set your own retail price on par with or above his.

Deliver on time. If that means long days and late nights sometimes well thats part of the price you pay. He needs on time delivery to his yard to get on time delivery to his customer and if he dont deliver on time... well in this industry thats a good way to loose business to someone who can. When he loses business, you lose business.

Some wise words there! Leave some on the bone for the wholesaler buyer. Generally speaking, in most industries, a retailer wants/needs to double his money. Selling a board for $20, means he'd like to get it for around $10. (of course, there are exceptions and caveats).

My problem is that the really good stuff likes to find it's way to my Private Reserve Dept. and isn't for sale. Of course, that makes them REALLY want it.  :D

[Peter Drouin]

I tried wholesale, made some money, true less bull with them. More Bull with some customers wanting to build a barn or a builder redoing a 200 year old house.
But for me cutting ½ the wood and 2x the money works for me.

I;m moving into the long timber market more and more. And that, my friend has a lot of $$$$$$$ in it.
I love Hemlock. :D :D ;)

[Ianab]

I do computer support work for 2 local lumber companies with quite different business models.

One is a "complete chain", from having their own log truck to collect logs from the landing, mill, kiln, treatment, machine shop, lumber yard, hardware store, house building operation. But to do that that have to have multiple staff in each part of the operation. I don't know their exact staffing, but they have 6 computer terminals on the various "retail" counters. They also operate wholesale, buying and selling to other companies.

But the point is they have a considerable investment in staff, retail space and advertising, and that costs money, which is hopefully offset by the higher retail price. If you want a truckload or house lot, you get to talk to the wholesale guy, and get a good discount.

The other company has no sawmill, or retail outlet. They buy bulk rough sawn wood wholesale, and process it into more valuable product, which they resell wholesale to retail outlets. No sawmill or "shop front" to maintain, just a large factory type site with various high tech wood processing machines (several million $$). Rough sawn boards come in on a truck, and finger jointed / treated / profiled / pre-primed / machined / laminated wood goes out on another truck.

Both business models work (they even buy and sell each other product when convenient).

But for a small operation, can you afford the time taken to do retail sales. It's going to be cutting into the sawing time, and you have to set up your operation for retail sales, or you have to employ more staff to cover that side. Or are you better to keep the saw running, move the product wholesale, and keep the cash flowing as Lurker suggests?  Or maybe retail is actually your thing, and you should be buying wholesale from someone else, and spend your energy on the retail operation?

This is just an observation from someone that, as an amatuer can take things from a standing tree, into a finished product, and even sell it. So I know all the steps involved, and I work with folks from loggers to furniture sellers. But as a one man band, that's not the way I would go, as you need all the equipment for all the various stages, and you end up actually running the mill 1 day per week, or less if you are into fine furniture.

If milling is your business, then work on that first. Keep the mill running as long as it's turning a profit. If the mill can't make a profit, then you should be looking for some other niche to work in.

[Peter Drouin]

Ianab, Till you do the job, You don't know. Looking at other guys business one can only guess how well you can do. I cut 5 days a week, sell 6 days.
;)

[killamplanes]

I have had several conversation with retail stores around here specializing in woodworker kind of things. They seemed to have there own sources but were willing to talk about there needs and concerns. I found out very quickly that they were looking for very high quality kiln then resaw ed to perfect specs. They acted like the woodworkers they delt with and the products they requested were ready to stain or install. I was under the impression that the store was full of rough cut dry lumber and the customers finish it to fit there needs.   Theres a nice and very large custom cabinet, doors, trim basically anything wood shop 5 miles from my house. They buy from only certain suppliers and really it's not that custom as far as the raw materials go. There finish is custom but the wood is just based of off grade. No exotic mantels or burl table.  And they were telling me the stains now and days are unbelievable. They can make pine look like cherry and sell it for 20% less than cherry and that's what people want.  I originally thought that my mill would help feed these kind of retail store and wood shops but I decided to go another direction.

[Greyhound]

Better yet, get your local woodworker stores to advertise for you, like letting you put up a small advert on the corkboard.  That's how I found my first sawyer.  This way, you can sell directly to the end consumer and eliminate the consignment/middle man fee's.  It's a win for everyone.  Woodworker stores make their $ of of tools, etc.  They only sell lumber as small, artisinal pieces to keep you coming in the door. 

Green vs. k.d.  Find a local small kiln operator. K.d. definitely is a value added feature.

[ozarkgem]

I haven't sold any lumber since May. I have given up . The only people that show up are the ones wanting free lumber. I am fed up with it. I will saw for myself. Example. I was offered 8.00 each for 26" wide 2" thick 8' long walnut slabs. I'm done.

[Kbeitz]

Wait... Don't stop... I'll give you $10.00

[4x4American]

I haven't sold any lumber since May. I have given up . The only people that show up are the ones wanting free lumber. I am fed up with it. I will saw for myself. Example. I was offered 8.00 each for 26" wide 2" thick 8' long walnut slabs. I'm done.

I know what you mean...I get low balled all the time people it's really annoying.  They always say they can get it from ______ for cheaper.  Then get outta here why waste my time!  That's a plus for the wholesale markets: they pay.  It might not be the best price you coulda gotten but they pay and they don't complain they just sign the check. 

[ozarkgem]

Wait... Don't stop... I'll give you $10.00

I bet you want that delivered for that price also.

[PA_Walnut]

People are shameful sometimes. I had a local dude tell me that he had a customer come and ask for quarter sawn red oak-- "I want the widest board you've got." SO, they spent about an hour hand sorting to the bottom of the pile. Finally found a 12"+ board. The guy asked, "Can you cut it in 1/2" since I only want to buy short lengths and need only 1/2 the board. Dude told him, "No, you can't, you have to buy all of it. BTW, what are you doing with it?" The customer responded, "I'm ripping it into 1 inch strips to make checkerboards...."  smiley_argue01 smiley_chop

[ozarkgem]

People are shameful sometimes. I had a local dude tell me that he had a customer come and ask for quarter sawn red oak-- "I want the widest board you've got." SO, they spent about an hour hand sorting to the bottom of the pile. Finally found a 12"+ board. The guy asked, "Can you cut it in 1/2" since I only want to buy short lengths and need only 1/2 the board. Dude told him, "No, you can't, you have to buy all of it. BTW, what are you doing with it?" The customer responded, "I'm ripping it into 1 inch strips to make checkerboards...."  smiley_argue01 smiley_chop

The same guy came by my place later on, I am sure of it.