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Pricing my drying services using vacuum kiln

Started by TCove, May 09, 2020, 07:47:47 PM

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TCove

I see a lot of people up here struggling with how to charge for their drying services, when they have a vac kiln.
I see some saying they charge so much per BF, but won't take anything over 20%.
I see others charging by the BF, but need 3/4 of their kiln full.

I think it might be a whole lot simpler, to just charge per day. Period. Done.

I've learned a long time ago, to never say 'no' to a customer.
Never turn them down....just raise your price, and let them decide. All too often, when I 'think' I don't want the business, I just jack my price waaaaaay, and low-behold, they say 'yes'.

So, I don't have my kiln yet. But I live in an area with a high demand for drying, and nobody but the Amish doing it....and their quality just doesn't cut it.

So, my plan is to simply charge $120 / Day for the kiln.

Doing it this way:

I Don't care how thick your wood is
I Don't care how dry it is
I Don't' care the species
I Don't care if you want to put in 10 boards, or fill my kiln

With a full kiln, it works out to about 42 cents/BF. 

If you don't have enough wood to fill my kiln....well, with all due respect, that's your problem, not mine.  The nearest kiln to me, which is 50 miles away, hates drying for others, and charges 40 cents/BF......and, as you know, that's with 5 week turn around, on 4/4, and he won't touch anything thicker.

Now, realize that most will be shocked, but will quickly ask "How long will it take?".  It's a piece of cake to answer that question, after you spend a little time on these forums.  As you give them your answer, hand them a calculator.  


You gotta remember, there's people with money out there, that just want their wood dry.  Don't tell them 'no'. Let them tell you 'no'.....and you'll get a lot of yes's along the way.

Years ago, I sold some bowl blanks to a guy, and then after the online sale, he told me he wanted me to ship them to Norway.  These were several walnut blanks that were over 20" in diameter, and over 6" thick.  When I told him the shipping was going to cost more than the wood, he said "I didn't ask what the shipping would cost. Just tell me when they will arrive, and send me a bill".

I then did some digging, and realized I was selling to the president of Oracle.  Bottom line, never say 'no'.

nativewolf

First welcome, not sure if you just have been here before or not but that is a heckuva good first post if you are a new poster.  

Others have proposed by the day for a vac kiln as well.  I assume you've bought an idry?  

Where are you located?  Ohio or PA or ?
Liking Walnut

TCove

Yep....first post.
I'm in North Central Wisconsin.

Tom the Sawyer

I have had a couple of my clients take lumber to a vacuum kiln (iDry) service.  They said they were charged $1 per board foot, per inch of thickness.  12/4, LE planks (3" thick) were $3 per b/f.
07 TK B-20, Custom log arch, 20' trailer w/log loading arch, F350 flatbed dually dump.  Piggy-back forklift.  LS tractor w/FEL, Bobcat S250 w/grapple, Stihl 025C 16", Husky 372XP 24/30" bars, Grizzly 20" planer, Nyle L200M DH kiln.
If you call and my wife says, "He's sawin logs", I ain't snoring.

boonesyard

Welcome to the Forum.

I've been running an iDry since Last November. We charge $.10/BF/day. It's an easy formula for the customer, and easy for us to keep track of a load that has mixed customers. Our minimum load is 500 BF and that depends on the species and thickness. We will not run a 500 BF load of 12/4 white oak (that would need to be at least 1,000 BF), but would run 500 BF of 4/4 black walnut as an example. We will run a smaller load for a customer that really needs it, but the price increases. We also have a regular customer that keeps us in full loads that we give a substantial break on price, but his stuff only runs when we don't have other regular priced customer loads to run. 

The $120/day for the kiln would not be a bad way to go, you'll just need to keep track of proportional load sizes with mixed customer loads. Good luck and enjoy
LT50 wide
Riehl Steel Edger
iDRY Standard kiln
BMS 250/BMT 250
JD 4520 w/FEL
Cat TH255 Telehandler
lots of support equipment and not enough time

"I ain't here for a long time, I'm here for a good time"

TCove

Quote from: Tom the Sawyer on May 09, 2020, 09:34:59 PM
I have had a couple of my clients take lumber to a vacuum kiln (iDry) service.  They said they were charged $1 per board foot, per inch of thickness.  12/4, LE planks (3" thick) were $3 per b/f.
That pricing model fails as soon as a wealthy customer wants 300 ft. dried of quilted maple.
And, if 12/4 has a different price, I'd imagine 6/4, 8/4, and everything in between, would also.
And why would the vac service charge more for 12/4 vs 4/4?  Cuz 12/4 ties up the kiln longer.
Therefore I'll bet that service charges more per bf to dry white oak vs soft maple.

Too messy.

btulloh

Sounds interesting. The only way to know for sure is to try it. 
HM126

TCove

Quote from: boonesyard on May 10, 2020, 10:02:22 AMIt's an easy formula for the customer,


But it's not so easy for the customer, when you have to start throwing in all the exceptions.....

Quote from: boonesyard on May 10, 2020, 10:02:22 AMOur minimum load is 500 BF and that depends on the species and thickness. We will not run a 500 BF load of 12/4 white oak (that would need to be at least 1,000 BF), but would run 500 BF of 4/4 black walnut as an example. We will run a smaller load for a customer that really needs it, but the price increases.


That's a ton of exceptions....especially the 500bf minimum, depending on species and thickness.

You do point out one thing I didn't think of, and that's the possibility of a single kiln charge with wood from more than one customer.
But like you said, it's easy to calculate what percentage each customer is using.

Does that occur often?

I dunno....I'm really liking the sound of $120 / day. Boom. Done.

Crusarius

120 per day sounds nice. Especially if you double or triple stack customers. 240 or 360 a day sounds better :)

If ppl are willing to pay for it then you can't go wrong.

longtime lurker

I'm curious as to how you come up with $120 a day. Can you break that out a bit for me please.



The quickest way to make a million dollars with a sawmill is to start with two million.

Walnut Beast

Quote from: TCove on May 09, 2020, 07:47:47 PM
I see a lot of people up here struggling with how to charge for their drying services, when they have a vac kiln.
I see some saying they charge so much per BF, but won't take anything over 20%.
I see others charging by the BF, but need 3/4 of their kiln full.

I think it might be a whole lot simpler, to just charge per day. Period. Done.

I've learned a long time ago, to never say 'no' to a customer.
Never turn them down....just raise your price, and let them decide. All too often, when I 'think' I don't want the business, I just jack my price waaaaaay, and low-behold, they say 'yes'.

So, I don't have my kiln yet. But I live in an area with a high demand for drying, and nobody but the Amish doing it....and their quality just doesn't cut it.

So, my plan is to simply charge $120 / Day for the kiln.

Doing it this way:

I Don't care how thick your wood is
I Don't care how dry it is
I Don't' care the species
I Don't care if you want to put in 10 boards, or fill my kiln

With a full kiln, it works out to about 42 cents/BF.

If you don't have enough wood to fill my kiln....well, with all due respect, that's your problem, not mine.  The nearest kiln to me, which is 50 miles away, hates drying for others, and charges 40 cents/BF......and, as you know, that's with 5 week turn around, on 4/4, and he won't touch anything thicker.

Now, realize that most will be shocked, but will quickly ask "How long will it take?".  It's a piece of cake to answer that question, after you spend a little time on these forums.  As you give them your answer, hand them a calculator.  


You gotta remember, there's people with money out there, that just want their wood dry.  Don't tell them 'no'. Let them tell you 'no'.....and you'll get a lot of yes's along the way.

Years ago, I sold some bowl blanks to a guy, and then after the online sale, he told me he wanted me to ship them to Norway.  These were several walnut blanks that were over 20" in diameter, and over 6" thick.  When I told him the shipping was going to cost more than the wood, he said "I didn't ask what the shipping would cost. Just tell me when they will arrive, and send me a bill".

I then did some digging, and realized I was selling to the president of Oracle.  Bottom line, never say 'no'.
How is your plan working out? Do you have a IDry? How long have you had it?

boonesyard

Quote from: TCove on May 10, 2020, 12:06:23 PM
Quote from: boonesyard on May 10, 2020, 10:02:22 AMIt's an easy formula for the customer,


But it's not so easy for the customer, when you have to start throwing in all the exceptions.....

Quote from: boonesyard on May 10, 2020, 10:02:22 AMOur minimum load is 500 BF and that depends on the species and thickness. We will not run a 500 BF load of 12/4 white oak (that would need to be at least 1,000 BF), but would run 500 BF of 4/4 black walnut as an example. We will run a smaller load for a customer that really needs it, but the price increases.


That's a ton of exceptions....especially the 500bf minimum, depending on species and thickness.

You do point out one thing I didn't think of, and that's the possibility of a single kiln charge with wood from more than one customer.
But like you said, it's easy to calculate what percentage each customer is using.

Does that occur often?

I dunno....I'm really liking the sound of $120 / day. Boom. Done.
It occurs frequently. We try to keep as full a charge as we can, and many times that means multiple orders. Our situation here is probably vastly different than others in that we don't get a lot of large (full) customer loads. In your application, if you have full loads and $120/day works for everyone, sounds perfect. The elegance is in the simplicity.  :)
LT50 wide
Riehl Steel Edger
iDRY Standard kiln
BMS 250/BMT 250
JD 4520 w/FEL
Cat TH255 Telehandler
lots of support equipment and not enough time

"I ain't here for a long time, I'm here for a good time"

longtime lurker

(now I've got time for a longer response)

I'm curious about how you come up with a figure of $120 a day because...

If you've got the base model $50k kiln + freight + installation cost sufficient so it can run at 60° ambient (that's going to need a good shed + maybe heat in winter in a lot of places) you'd have to be pushing around $70k installed (just guessing)

$70k divided by 200 days a year run time for 3 years comes to $116 per working day just in amortisation cost without interest. And you haven't got the power bill yet...

I've done the sums on Vac Kilns a couple times: They're a winner if you've got the throughput to keep them full I'm sure of it. I'm also equally sure that KD is KD.... there is no premium for faster drying of lumber up to 8/4 thickness, and the market for lumber at 12/4 and 16/4 where Vac kilns really pull away from the pack is limited in both demand and supply. (It's there, but don't think you're going to crack it overnight).

Me I want a Vac Kiln but... I know I'm not big enough to justify one yet.  I just think you maybe need to redo your sums with a set of numbers that are a little more realistic about throughput, based around what you currently do and what you think you might reasonably pick up in outside work rather than basing it on what you could theoretically achieve if everything went just right.



The quickest way to make a million dollars with a sawmill is to start with two million.

Stephen1

We charge .15cents a bd ft per day. I dry both softwood and hardwood. I have a minimm of $150 per customer. I take customers wood untill I can fill the kiln and then I run the kin. 
IDRY Vacum Kiln, LT40HDWide, BMS250 sharpener/setter 742b Bobcat, TCM forklift, Sthil 026,038, 461. 1952 TEA Fergusan Tractor

TCove

Here's some rough calculations I was using:


$52,000Kiln + wiring & plumbing
$120Weekly Operating Cost
2000capacity in BF
$120Daily charge for kiln use
7Days in kiln for 4/4
$0.42Customer cost / BF @ full kiln
25Days/Month kiln is billable
$30,857income generated / year
1.69years to pay off
20.2Months to pay off


I came up with $120/day, because I feel 42 cents/BF is what customers would be willing to pay....and of course, that's untested.
I completely disagree with the previous poster that stated ..."I'm also equally sure that KD is KD.... there is no premium for faster drying of lumber up to 8/4 thickness".

I feel the biggest selling point will be the 7 day turn for 4/4 stock.

In the day and age we live in today, where people complain if their Amazon order doesn't arrive in 2 days, I feel folks will be willing to pay handsomely for a 7 day turn, rather than stickering their lumber outside, waiting 4-6 months, and then moving it to a DH kiln for 21 days.  If I'm wrong on that, then my entire spreadsheet model above falls apart.

I believe long gone are the times when standard fare was Fingerhut quoting 6 to 8 weeks for delivery.

TCove

Quote from: Stephen1 on May 12, 2020, 09:22:23 PM
We charge .15cents a bd ft per day. I dry both softwood and hardwood. I have a minimm of $150 per customer. I take customers wood untill I can fill the kiln and then I run the kin.
Not bad. That's a pretty simple model.
Do you struggle at all to get customers, at that rate?
Based on my calc's, that's $300/day, for a full kiln load.

Stephen1

Keep it simple. I have yet to fill the kiln with 2000 bd ft, I use 7/8" breezewood stickers. I get 12-1500 bd ft per load, mostly live edge slabs. I have yet to fill the kiln with 4/4 lumber. I usually have a mixture of slabs. Customers are showing as they find out about me and I as I learn how to run a Kiln. Quite a science. The thicker the wood the longer it takes to dry, still faster than a DH klln? but not as fast as a RF kiln. It does turn out nice lumber, especially right off the mill. 
 I now dry hardwood and softwood seperatly. I find the kiln runs along nicely. I was going to raise my rates until this Covid hit. I will now wait until the fall .
LL is not far off from what he says. You need a building to keep the kiln warm. You also need a bulding that you can climate control to keep customers wood and yours until it is picked up. I have 2500 sq ft and I am challenged with space as I unload and load the kiln.
There is another post on the IDRY , go read it all. 
IDRY Vacum Kiln, LT40HDWide, BMS250 sharpener/setter 742b Bobcat, TCM forklift, Sthil 026,038, 461. 1952 TEA Fergusan Tractor

YellowHammer

From the other side of things, (I don't own a vac kiln) from a guy who gets phone calls from very not happy people who have had their wood "not completely dried" in both vac style kilns and conventional kilns, (I get calls about both, its not the kiln's fault, its the kiln operator) where they were quoted a predicted price and time for drying, and the operator missed the deadline and returned the wood, either through ignorance or not, back to the customer with an unacceptably high (or low)  moisture content.  The drying was quoted for a certain price and time, or a max price and time, the cutoff was reached, the wood had stalled, the deadline was blown, and the customer is either forced to pay much more than anticipated because the time required to dry was underquoted or under anticipated, or the kiln operator has to get the current load out to get the next load in, and the customer gets mad at the kiln operator, and then calls me.  

The calls range from wanting to use me as a consultant, or just my moisture meter to confirm the wood is still wet, or ask me to finish drying their wood because they will never give that "crook" any more money.  I've helped a few, and the others I simply tell them they need to call their lawyer.

So the point is, when drying wood, using any style kiln, the wood only dries as fast as it does, and will not necessarily follow a manufacturer's schedule, to the day.  So the pricing model, the kiln operator, and the customer, should be prepared for that.  This is especially true of thicker wood, and any wood prone to stalling.

I didn't see any allocation for insurance.  If drying as a business, for money, business insurance should not be ignored.  There should be insurance for the equipment, for the buildings (fire is a big one), for the employees,  and insurance for any claims due to damage caused by the product, often called "end user insurance" which covers bugs, mold, other stuff.  Its not cheap.  Homeowner insurance will not cover these.  Stacking green wood, although a very simple process, is actually quite injury prone, and I don't know anyone who has not had a finger, toe, foot, hand etc mashed smashed to some degree.  Sometimes is just a blackened finger nail, sometimes much worse.  Imaging dropping a 100 lb hunk of wood on a ketchup pack.  There is blood.  

I didn't see any time allocated for sticking and unsticking the wood.  From our experience, it takes about an hour for one person to sticker stack a thousand bdft of 4/4 to go into a kiln, and about 45 minutes to dead stack it when dried.  So for a couple thousand bdft of wood, a half day wages can be burned pretty quickly.  If processing a load a week (we do a load every 7 to 9 days, with multiple kilns) that money starts to add up.
YellowHammerisms:

Take steps to save steps.

If it won't roll, its not a log; it's still a tree.  Sawmills cut logs, not trees.

Kiln drying wood: When the cookies are burned, they're burned, and you can't fix them.

Sawing is fun for the first couple million boards.

Be smarter than the sawdust

Walnut Beast

Quote from: YellowHammer on May 18, 2020, 08:58:20 AM
From the other side of things, (I don't own a vac kiln) from a guy who gets phone calls from very not happy people who have had their wood "not completely dried" in both vac style kilns and conventional kilns, (I get calls about both, its not the kiln's fault, its the kiln operator) where they were quoted a predicted price and time for drying, and the operator missed the deadline and returned the wood, either through ignorance or not, back to the customer with an unacceptably high (or low)  moisture content.  The drying was quoted for a certain price and time, or a max price and time, the cutoff was reached, the wood had stalled, the deadline was blown, and the customer is either forced to pay much more than anticipated because the time required to dry was underquoted or under anticipated, or the kiln operator has to get the current load out to get the next load in, and the customer gets mad at the kiln operator, and then calls me.  

The calls range from wanting to use me as a consultant, or just my moisture meter to confirm the wood is still wet, or ask me to finish drying their wood because they will never give that "crook" any more money.  I've helped a few, and the others I simply tell them they need to call their lawyer.

So the point is, when drying wood, using any style kiln, the wood only dries as fast as it does, and will not necessarily follow a manufacturer's schedule, to the day.  So the pricing model, the kiln operator, and the customer, should be prepared for that.  This is especially true of thicker wood, and any wood prone to stalling.

I didn't see any allocation for insurance.  If drying as a business, for money, business insurance should not be ignored.  There should be insurance for the equipment, for the buildings (fire is a big one), for the employees,  and insurance for any claims due to damage caused by the product, often called "end user insurance" which covers bugs, mold, other stuff.  Its not cheap.  Homeowner insurance will not cover these.  Stacking green wood, although a very simple process, is actually quite injury prone, and I don't know anyone who has not had a finger, toe, foot, hand etc mashed smashed to some degree.  Sometimes is just a blackened finger nail, sometimes much worse.  Imaging dropping a 100 lb hunk of wood on a ketchup pack.  There is blood.  

I didn't see any time allocated for sticking and unsticking the wood.  From our experience, it takes about an hour for one person to sticker stack a thousand bdft of 4/4 to go into a kiln, and about 45 minutes to dead stack it when dried.  So for a couple thousand bdft of wood, a half day wages can be burned pretty quickly.  If processing a load a week (we do a load every 7 to 9 days, with multiple kilns) that money starts to add up.
That's put in perspective very well 👍👍👍

Stephen1

thank you YH you have put my thoughts into print. We figure each load is 4 hours for 2 people. That is built into our 1st cycle. 
Like everything it is a learning experience and experience is one of the best teachers. next best is being a member on the FF and having access to information here. 
IDRY Vacum Kiln, LT40HDWide, BMS250 sharpener/setter 742b Bobcat, TCM forklift, Sthil 026,038, 461. 1952 TEA Fergusan Tractor

GeneWengert-WoodDoc

I suggest that also you need to add some maintenance costs.  Likewise, some profit.

Perhaps you will have some marketing costs, an accountant to do taxes and maybe more, QuickBooks or other software and a computer with printer to write checks, etc.  payment for your time to do basic accounting.  Then you may have a business tax on equipment.  Water disposal can also sometimes cost money, as the water is acidic and can affect small sewer systems.  What about the cost of the building the kiln is in and the heating costs or air conditioning costs. Some of your health insurance should go into the costs.  Maybe a cell phone too.  Finally, the IRS will not let you depreciate the equipment in two years, so you will likely have income taxes that require more than a Schedule C.  

What about sticker cost?  What about a forklift or other rolling stock?

You might also have snow removal costs, security costs, driveway maintenance costs, and some safety equipment costs.

Then there is the guy that gives you his lumber to dry, but then claims it is warped and stained and at the wrong MC, so he gets a lawyer.  Your legal costs would be large even if you settle out of court.

You also need to get a LLC corporation formed that does the business (for various reasons, including protecting your personal assets from a liability problem with the business or it goes bankrupt).  Similarly, if you have a vehicle used for business, like hauling lumber, it would not be covered with your home vehicles, but would need a business policy.  Also, locate the business away from your home so that if there is a fire, your home will not be damaged.  Also insure the buildings and equipment from tornadoes, fire, theft, etc....all of which are NOT covered by homeowners.

Finally, do not use your cash to buy the kiln, but use a loan.  You can pay the loan off whenever you make enough money.  You will fine that cash can be quite helpful when you start a business.  Also helpful in days like the last couple of months when lumber demand is quite slow and many businesses are running short on cash to pay for lumber drying, etc.
Gene - Author of articles in Sawmill & Woodlot and books: Drying Hardwood Lumber; VA Tech Solar Kiln; Sawing Edging & Trimming Hardwood Lumber. And more

TCove

I already have an established business, with a 7,000 sq.ft. insured, heated building, with plenty of room for an iDry.  So, indirect expenses like health insurance, snow removal, and cell phone, are already covered. Same with the skidsteer, and driveway maintenance. I think advertising would be low, as ads in these northern Wisconsin papers are cheap. Plus, I'm on a busy highway, with a prominent sign out front.

I found this comment interesting:
"Then there is the guy that gives you his lumber to dry, but then claims it is warped and stained and at the wrong MC, so he gets a lawyer.  Your legal costs would be large even if you settle out of court."

What's the best way to cover oneself for this ?

Walnut Beast

Quote from: TCove on May 21, 2020, 01:30:48 AM
I already have an established business, with a 7,000 sq.ft. insured, heated building, with plenty of room for an iDry.  So, indirect expenses like health insurance, snow removal, and cell phone, are already covered. Same with the skidsteer, and driveway maintenance. I think advertising would be low, as ads in these northern Wisconsin papers are cheap. Plus, I'm on a busy highway, with a prominent sign out front.

I found this comment interesting:
"Then there is the guy that gives you his lumber to dry, but then claims it is warped and stained and at the wrong MC, so he gets a lawyer.  Your legal costs would be large even if you settle out of court."

What's the best way to cover oneself for this ?
Sounds like your ready to get one 😊

GeneWengert-WoodDoc

Several things you can do to avoid a lawsuit...
have the customer sign an agreement that

1) wood has natural characteristics that causes warp, checking (end and surface) and can contain bacteria that cause or contribute to wetwood after drying.  Plus, sawing procedures as well as log and lumber handling at the Mill can result in some warp, checking and staining evident at the end of drying.  You cannot be responsible for these inevitable drying defects or any air drying defects.

2). You will follow the best drying practices available for your equipment to avoid defects and extended drying time.  You wil have the drying records available, if desired.  (Then keep very good records.). You cannot be held responsible for checks, stain and warp when you follow the correct procedures.  Final moisture content checks will be done with a Delmhost J2000 meter and appropriate auxiliary equipment.  Any complaints for moisture content will ddbe done with this meter.

3). When on the premises, the customer will use hearing protection, use eye protection, wear a hard hat and follow appropriate health requirement, such as social distancing.

4). Lumber that is not picked up promptly after drying can be subject to storage defects, such as moisture changes and insect damage,
which are not the responsibility of the drying company.  Dry lumber that is not picked up within a week will be changed for storage costs of $15 per MBF per day payable at the time of pick up.  All drying costs will be due and must be paid before picking up the lumber.

5). Any complaints about drying quality must be received within two weeks of delivery of the dried lumber.
Gene - Author of articles in Sawmill & Woodlot and books: Drying Hardwood Lumber; VA Tech Solar Kiln; Sawing Edging & Trimming Hardwood Lumber. And more

Cs logrescue

Hello, looking at all kiln options, idry still performing well? Do you have to hand stack loads? 

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