Now that I have my mill up and running there are a few locals I know that may provide logs to me on a share basis so my question is what would be a fare share percentage, 50-50 or are there any unwritten rules.
Sharing has been discussed several times on the forum here. Very difficult to arrive at what is "fair".
Seems consensus from previous discussions is to buy the logs from him that you want to saw into your lumber.
Then saw his logs for him for what you want as your sawing fee.
Keeps your business separate.
Issue with "shares" is that logs have different values, not just in the general market, but also to you in particular. Some logs are only worth maybe 50c bd/ft, others are $2-3. But they cost about the same to saw.
So if for example, you value the logs at 50c bd/ft, and charge 50c bd/ft for sawing, then it might be a 50/50 split. Divide the logs into 2 piles, saw the customers logs and send him on his way, and you now own the other pile.
But if the logs are more valuable to you, (because you have a use or ready market), you might take one log as payment for sawing 2. Likewise if they are low value, you might want to keep 2 logs per one sawed.
By putting a $ value on the logs first, and a $ value on your sawing, then the customer knows what's going on. If he thinks his logs are worth more, just tell him fine, sell 1/2 of them to someone else, and bring me the cash to saw the rest. Likewise if he thinks your sawing is too pricey, the offer to buy some of the logs is still open, because you offered what they are actually worth to you. Or maybe he just decides to pay cash and keep all the lumber? Either way, you aren't losing.
Will the deal work out 50/50, or 60/40, or 30/70? Who knows, . Just make sure you are coming out ahead on the overall deal (by ending up with a stack of logs that are actually useful to you)
I think Ian did a great job describing sawing on shares.
I normally do not saw for shares but I have and will in the future if the logs are good enough and I need them and have a use or market for the lumber. After the last shared sawing I did I decided if I do saw on shares it is almost certain the customer will have to bring the logs to me as I quickly found I had way too much time, mileage, handling and expenses in them. I'd end up handling the lumber 2-3 times instead of once. I had to take the mill to the logs then bring it home and make several trips back to get the lumber.
I do agree it is much better to saw for the logs than for the lumber as you get more flexibility in how to cut them for what you need or what will sell. To help keep down disputes, separate the piles then draw cards or flip a coin or such to randomly determine who gets which pile of logs or lumber. This helps keep the division as honest as possible and helps prevent disputes or ill will thinking you took advantage of the customer. I have often told the customer that is what we were doing, let him arrange the stacks as equally as possible then I'd tell him "You go ahead and pick". There can be no dispute then.
I liken it to telling 2 kids - "Billy, you cut the pie. Tommy you pick your piece first." You have never seen such precision dividing the prize. Let the customer stack thinking he may get either one.
Good luck. Be careful. No amount of logs or lumber is worth offending a friend or good customer.
I think a good way to look at it is. Your doing a favor for your friend and getting some free wood in return. It's always going to lean toward your friend in what's "fair" after all it's your sawmill,gas,blades, etc. but if it's a good friend and you don't mind doing him a favor then everyone's happy.
Usually I'll respond to this kind of deal with variations on I'll buy your logs, you buy my lumber. Some of them are politer than others depending on how I'm approached too, cuz I've heard it all before.
Very rarely I'll agree to saw shares, because it only works out on extremely good logs in high value species.
It's not about fair it's about business. You've got $x tied up in mill equipment and experience and time... the other guy has a tree. Think of it like a casino: the house sets the odds and the house always wins, otherwise the house goes broke. But that doesn't mean the other guy doesn't leave with a smile on his face too.
Think of it like a casino:
I've never left a casino with a smile on my face unless I skipped the machines/tables and went straight to the buffet
Unfortunately for me friendship is almost never at issue - it is simple economics. I live is a pretty poor area and many people are cash poor but may have access to logs or trees. Most people who call me about sawing on shares are complete strangers.
Be careful if you do choose to try it, and I think it is a good experience for every new sawyer to try once, that the customer does not try to short change you. It may be deliberate or simply the fact he does not know the cost/value of the logs and lumber involved.
The only time I was in a casino, they gave my wife and I a free roll of quarters. We put a bunch into slot machines and reached a point where we agreed, "let's take what's left of this free money and get out of here while we're still ahead". At no time did those quarters ever exceed the initial value.
Casinos: I agree - I have an issue with doing something that I know statistically I will come up on the wrong end of...
Valid point: most of us have 10's of thousands tied up in equipment, the customer has trees and until they're logs at your mill they have little to no value.
Personally I don't mobile mill because I avoid moving logs and lumber by hand. If someone had clear cherry or walnut logs I might put the wheels back on the mill but the'd likely want your first born... ::)
The best advise I read on the forum here is to be sure both parties clearly agree on the terms prior - that's the key to both walking away not feeling cheated.
The advice offered above is very good. No matter how good your relationship is with your friend, once the lumber is sawn and divided, either he or you will feel shortchanged. Buy his logs, saw them to order, and give him the deal you can live with. Just sayin.
Before considering sawing on shares determine the use of your share. Are you gonna use it yourself or try to market it?
Personally I will not even consider sawing on shares. When asked my quick response is "No, I am in the sawing business, not the selling business". I certainly do not need the lumber and shares puts me in the marketing/selling business before I see my share. If it does not sell, I do not get paid. I only saw for $$$.
Quote from: Crossroads on June 27, 2022, 10:44:09 AM
Think of it like a casino:
I've never left a casino with a smile on my face unless I skipped the machines/tables and went straight to the buffet
You Got It Right. I always leave with a Smile when leaving the all you can eat Crab Leg Buffet The only loss I have is the cost of gas. :)
I was given some excellent advice after my first (and last) sharing job. Magic Man said "Butt logs are always the log owner's". I wish I had known that prior to ruining 3 blades on "my" logs. I will gladly pass this advice along to you for the same price I paid. Good luck and God bless.
This first time I cut on shares was right after I bought my mill, and I totally shorted myself, big time... on figured maple, no less ... lol...
A few years later I did another cut for shares job right after I moved back to WA and was scrambling for any work I could get. Ended up being pretty low value logs and I didn't get much out of it. Mostly since then I've avoided those deals.
BUT... I just got a few thousand feet of logs delivered to my site by a customer for whom I will cut for half. Pretty clean fir logs, I get to work on my own site, and the site that they wanted me to mobile cut on was way too tight to work in, or even effectively move the mill into. I've been wanting to try selling dimensional lumber locally, so keeping half of this pile gives me some logs to try that out on.
If it turns out that there's no interest in that, well, I can always use the lumber myself. Plenty of projects around the compound.
Quote from: Crossroads on June 27, 2022, 10:44:09 AM
Think of it like a casino:
I've never left a casino with a smile on my face unless I skipped the machines/tables and went straight to the buffet
I have left the casino lots of times with a smile on my face. I play $5 & 10 blackjack table. I set a limit, I can play a long time, have a few beers and few laughs, sometimes I even come home with some money.
Sawing on shares does not appeal to me. As MM said, I do not sell lumber, I sell a service. So you have some logs you want me to saw using my saw, bands, fuel, time, and support equipment. You provide the logs, I provide everything else and you get half. Seems like their half is coming out of the middle. JMTC, Brian
When I sawed on shares, it was 2/3rds lumber to me and 1/3rd back to the customer.
The customer got his logs for free, and then would get the lumber I sawed for free. It's magic to them, their logs magically turn into free lumber. What could be better.
For me, it was the other way around, as my money and time magically turned into their lumber. I paid the fuel, the bands, the wear and tear on me and my equipment, the payment for the mill, etc. The gas stations and banks don't take wood, they take cash. So if their logs were worth more, then they could sell the two thirds I was going to get, and just hand me the money and I'd mill up the one third that was left for a fee.
In the end, I just stopped doing it. I got tired of explaining to people how "not valuable" their logs were when all their neighbors were telling them the logs were gold.
I've used the example of dirt. Dirt has very little value. It's after it has been dug, loaded and hauled to your site that it's worth anything.
Lots of interesting credible opinions here and all good info. Since I'm sawing strictly as a hobby to provide lumber destined for the development of my property and woodworking. I am only considering this on an occasional basis to provide myself an additional source and possibly come across some cool stuff.
(https://forestryforum.com/gallery/albums/userpics/59695/5BF92D3C-6F2F-40FA-A68D-AD3038F7E91A.jpeg?easyrotate_cache=1656459652)
I do 50:50 but only on walnut. I did some red cedar, about 3000 bf, with 2/3rds to me and 1/3rd to the log owner. That worked out OK for me.
My small sharing experience.
In my earlier days when I had nothing, I looked at some wooded lots for sale that just had a road bulldozed through some very high quality red and white oak stand. The realtor apologized for the piles of dirt and logs pushed up from the roads punched in. I asked about the wood in those piles and was told that I could have all I wanted.
Talked to a friend who had a small sawmill and he looked it over. Said he had tried for a several times years prior to buy timber off that hill but would not sell.
He thought we might be able to salvage a truck load of 8ft logs using his chainsaw, his 50 ford 8n, his 49 ford stake truck with winch, and saw them up on his mill.
He said if I helped, that he would provide the equipment and saw the logs for half the lumber. Then we would split the remaining half between us.
We spent many hours after work pulling out 8 ft oak logs and during the process (and their decision to push more roads through) the sellers offered us more marked timber including any dead or dying oaks. We ended up with a lot of lumber between us. We logged around 12k bd ft iirc.
Think my friend was very happy and I was elated. Two years later had all the oak for building my 3 bdrm home that included 1200 sq feet of 3/4" paneling, all the oak flooring, oak trim for doors and windows, baseboard and jambs. The yield was 60% clear oak boards.
A few years later I ran his mill with three other fellows who wanted lumber, and we agreed to do it on shares. But a problem developed as to how to sort lumber into four equal piles, plus seldom could we have all four available for sawing. I had to be there to run the mill, but the others were really not committed to be there all the time. Not a real successful project, but we had a good time doing it. About 8k bdft in the end.
Everyone's scenario is different.
Some folks just saw (have no use or market for lumber). Sawing on shares is not for them.
Others will mill, and sell (or use) lumber, and might buy useful logs (for a sensible price). The "buy some logs, do some sawing" deal can work.
Others are "hobby" (like me). Then you can forget the economics. A good friend might GIVE you logs, or you might GIVE them lumber, because they are good friends / family / neighbour, and they would will help you out return.
Or some mix of the above. But going back to the Casino analogy. YOU are the House, you set the rules of the game. If you aren't happy with the deal, then it doesn't happen. If you want to do it, explain the log rule, how you scale logs, what they are worth etc.
Like the Dirt example, it's not worth much, until you need a truck load delivered. Then it has a value, same as a load of useful logs delivered to the mill, even if they came from a land clearing job. Well technically standing trees often usually have a value (stumpage), but it goes WAY up after the harvesting and delivery work.