Raising firewood price!!

[Firewoodjoe]

I'm in northern michigan and I just got my books ready for taxes. And ding ding hardly no profits! At least not enough to speak of. About 70% of the income was spent in fuel and wood. I'm thinking of raising my prices for this season. I'd rather sell less and make just as much if they don't all pay the higher price or would I be a greedy business man for doing so?

[beenthere]

I'd rather sell less and make just as much if they don't all pay the higher price or would I be a greedy business man for doing so?

Do you think a business man trying to stay in business is greedy for making a profit? ;)

[Firewoodjoe]

Your right, that's what I need to hear thanks lol. There was a guy on the news tonight (Farther north then me) and is almost sold out and selling it for $85 a face cord! I'm lucky to get $60

[doctorb]

FWJoe-

What are your current prices?  What species of wood are you selling?  How seasoned is it?  How do you deliver it (Pickup...vs..3 cord truck)?  As someone who buys about 50% of the firewood I use, I am willing to spend more for....

1.  Someone I get to know and can trust on my property, even if I'm not there.  That means great communication regarding my requests, and attention to detail regarding where and when any delivered load is dumped.
2.  Someone who delivers a consistently above average product.  While I don't mind the adage of "mixed hardwoods", I prefer to hear, "This is 90% Red Oak with the rest Ash.  "Mixed Hardwoods" could be 90% Maple.  And while there's nothing wrong with burning maple, if you want me to pay more, I don't think I should pay oak prices for maple.  This must be seasoned wood and an absolute full cord.  Pride yourself in that.  Get a moisture meter and show your customers what seasoned wood is.
3.  Someone who responds to a repeat customer like I mean something to them.

From where I stand as a consumer, you can raise your prices because you need to, but I would prefer that you raise them because you deliver the total package of what a repeat customer wants.  Time to start stockpiling next years' deliveries. ;)

I agree with beenthere, there's no shame in making a profit.  None at all.  The reality is that, if you do it by raising prices without superior service and product, you won't have much profit in the end.

[Firewoodjoe]

Currently getting $65 (4'x8'x16") out of 10 month old red and white oak. Sold out of maple and ash at $60. But during the early spring and summer I sell fresh cut for $50. 5 cord dump truck loads. Don't have moister meter but have considered it

[Dave Shepard]

I personally think that is a good way to look at it firewoodjoe. You have to be profitable. If you can charge a little more, and buy less wood and fuel, you will be killing two birds with one stone. Increasing your profit, reducing your operating costs. cederman has talked about doing the same thing with his sawmill business.



What kind of oak, and what kind of maple? Hard maple is just a touch higher in btus per cord than red oak. I love burning hard maple, even if it should have been made into boards:

[Firewoodjoe]

Generally hard maple and beach.

[doctorb]

If you're selling by the face cord, that's a lot of deliveries.  With that big truck, do you insist on a minimal size order?  That's another way to cut down on your work load.  Bigger orders, one delivery.

[Firewoodjoe]

Yes generally 4 cord min

[r.man]

I would also count wages and depreciation or an equipment replacement fund before I counted profit. If you are not then you might actually be losing money, which is acceptable on the short term while building up a business. In your case I think increased sales would make the situation worse because your unit price is too low for your costs. Now that you have some real world numbers to work with you could predict profitability by running the numbers at say 75 per cord. I would allow for a quarter or third drop in volume on the short term but I expect you would gain that back in a few years. If you overcorrect the sales drop will be more. I do know of a firewood producer that has two prices, one for advanced paying customers and one for everyone else. He claimed that the advanced payment would pay for his wood up front, and the higher priced majority made him money.

[goose63]

I sell my wood for $115 4x4x8 cord load is 3 cord load

[Ivan49]

I sell my wood for $115 4x4x8 cord load is 3 cord load

Is that in pole length or is it cut?

[Firewoodjoe]

How can increasing my price make it worse? I'm not doing this to stay busy. I need to make money or I'll sell my stuff and not do it. At 115 a full cord i would loose money fast. I pay 65 a full cord and process it and get 150-180 usually out of that same cord

[Firewoodjoe]

There's enough beer money guys that sell it for 45 a face that I can't raise mine to high. But yet all these OWB guys pay 85-100 for pulp and have to cut it

[AnthonyW]

I sell my wood for $115 4x4x8 cord load is 3 cord load

4x4x8 cut is 1 full cord (per dept of weights and measures). In other (non-official) terms that could be called 3 face cords.

$115 for 4x4x8 seasoned is less than half price around here.

Increasing price can only reduce sales as people look for a lower price. You won't and can't stay in business long if you don't put money in your pocket.

The rule of thumb that has been told to me is to add up cost of materials ($65 in your case) plus consumables (assume 5 gal gas and a chain, $35). Then the hard part is to include the percentage of the equipment "used up" on the job. If the equipment costs $10k and is expected to last 1k hours, then add another $10 per hour. Finally, don't forget to pay yourself, let's charge $15 per hour. The total per cord would be $125 assuming you produce 1 cord per hour.

[Ljohnsaw]

I read this entire thread and now I see the difference.  At first, I saw $65 a face cord and I'm thinking, wow, that's cheap.  Then I figured out it is what we call 1/3 cord out here.  Most firewood comes by a FULL cord.  There are ads in the paper that state how to measure a cord and to be careful in what people sell.  But your price is still cheap considering my price out here.  It's up to $350/full cord 

[Firewoodjoe]

Anthony that's the problem.  No money is going in my pocket. So your saying a should lower my price to sell more?! Sorry if I don't under stand my college money bought my first season of wood 13 years ago and yes it's only sold as full cords if it's 100" everyone calls it a face or rick here. There are no firewood regulations in michigan. To my knowledge

[beenthere]

Then I figured out it is what we call 1/3 cord out here.

And it is 1/3 cord only if the wood is bucked in 16" lengths (i.e. 3 x 16" = 48" = 4')

Your confusion is why most states have passed commerce laws that state if you sell wood as a cord, that it means a volume of stacked wood that measures 128 cu.ft.  (which is based on a 4' x 4' x 8' measure).

There are conversions for the volume if not stacked and just dumped in a pile. That can vary by state and can vary depending upon agreement between buyer and seller. A lot of local variation comes into play with descriptions such as rick, pickup load, truck load, etc. that can cause some problems in understanding.

Notwithstanding what is meant my seasoned wood.  ;D

[beenthere]

Joe

There are no firewood regulations in michigan. To my knowledge

Here is some info for Michigan that should help.  You probably get more less than a cord of split firewood out of a cord of 100" pulpwood.

http://www.michigan.gov/dnr/0,4570,7-153-30301_30505_64424---,00.html#cord

[Firewoodjoe]

I know the terms on firewood and I'm not saying a face cord is an acctual term just that around here that's the way it's sold. 16" ,18",24" whatever u want 4'x8'x whatever length. And I've cut up many many 20 cord semi loads with my processor at 16" and u do not average 3-16" 4x8 rows of split wood. 2 1/2 is average. Sometimes more sometimes less. One crooked pieace takes up space or a hollow one. And it's not big wood, averages 8-4" diameter.

[beenthere]

Joe
Oops! And I meant to state "less" split and stacked from the purchased 100" cords. I'll correct that.
Hope you can find the better market for your wood. With Propane prices jumping, might be a good time to have wood to sell.
Talked to a friend and he said his 800 gal of Propane contracted at $1.49 is about 1/3 gone already, and the prices are now about $1/gal higher with this cold snap. He said he is burning more wood in hopes he can save some propane.

[Firewoodjoe]

$2.19 for my last fill. I only cook with it though

[M_S_S]

Joe I think you can and should raise your prices. Like others have said, deliver a quality product. You will lose some, but the clients you lose you probably won't miss them.
If I had to buy the wood I cut I couldn't make, to many wood rats around here, and a lot of the home owners get FS wood permits and cut their own. Our basic firewood (Juniper) doesn't lend itself to processer production so everything is bucked with a saw and split with a hyd. splitter or by hand. Juniper is tough, lots of big limbs therefore lots of knots to split. When you get a cord cut and split and seasoned it is only worth $150 to $160 delivered. Lol thank God I don't have to make a living doing it. ED

[AnthonyW]

Anthony that's the problem.  No money is going in my pocket. So your saying a should lower my price to sell more?! Sorry if I don't under stand my college money bought my first season of wood 13 years ago and yes it's only sold as full cords if it's 100" everyone calls it a face or rick here. There are no firewood regulations in Michigan. To my knowledge

You would sell more if you lowered your price but you would also go broke. The general idea is to make money but don't be greedy. Around here you would have room to raise your price. Another strategies you could use would be to raise your price a bunch, then offer discounts for green vs seasoned, bulk delivery (ie., multiple full trips), and any other way that would save you time, get money in your pocket faster or sooner, or guarantee you work and money.

The actually definition in New Hampshire states "a cord of split firewood measures 4'x4'x8' smartly stacked". Additionally, filing a complaint for shortage must be done within two weeks after delivery and the wood must be stacked.

[goose63]

Ivan that is cut and split