Don't wanna work for free anymore . . . Pricing Help, Please!

[Downhill Cutter]

Hello, Folks.

I'm running a Mobile Dimension, a Lucas 8 with slabber, a Nyle L53, and a 21" Woodmaster with a helical head.  Local Folks are starting to hear about me and ask me to do stuff for them in spite of myself.  I have a couple of job offers, and I want to be fair to clients AND profitable.  I'd like to do the work, but I don't want to get 2/3 into the project and finish it with gritted teeth (AGAIN) when I realize I'm working for below minimum wage.  I'm trying to build a reputation for quality and custom work  . . . not cheap . . ..Hoping for some input:

1)  A guy who makes specialty boxes wants a unit of 12' 2x12, KD pine, planed.  I've already done my "audition" run for him, and he likes my product.  He's willing to pay for quality.  I'm milling the lumber from logs, air-and-KD'ing it, shooting for as close to v/g as possible, and producing essentially clear material.  Beautiful, custom material, if I do say so.  I have no frame of reference for real pricing.  Suggestions, Please?

2)  Another guy wants me to mill a ~~30" red oak into 1x material.  He'll probably want it KD, and maybe planed.    I may also have to go fetch it for him with my logging arch. How do I charge for each operation?  

Thanks in advance to the Kindred Spirits on F/F!!

DownHill Cutter

[scsmith42]

Check what lumber is selling for from the big wholesalers and resellers.

Walllumber.com and The Hardwood Store of NC can provide some product value guidance.

[beenthere]

A guy who makes specialty boxes wants a unit of 12' 2x12, KD pine, planed.  I've already done my "audition" run for him, and he likes my product.  He's willing to pay for quality.  I'm milling the lumber from logs, air-and-KD'ing it, shooting for as close to v/g as possible, and producing essentially clear material.

What percentage yield of the 12' 2x12 material do you get per thousand bf of logs sawn?

Sounds like producing this product as you describe is a low-percentage yield.  
What value is given to all the material that doesn't make this product?

[WDH]

If you buy/sell lumber it is important to understand the wholesale market that the commercial operations buy and sell into.  Many people with portable sawmills saw and sell lumber below even wholesale price and are losing money or sawing for beer money because they do not understand the market.  This hurts the professionals that are operating a business.

The good thing is that some of this lumber is poorly sawn, poorly stacked, and mostly undried, so those that do all the steps well and produce a high quality consistent product that is properly dried can compete because you get what you pay for if you are a knowledgeable customer.

I see countless ads on FB Marketplace for very cheap lumber that has been poorly sawn/handled/stacked etc.  What many people do not realize is that wood does not move unless it changes moisture content.  If it is not properly dried for the intended use, the wood will not be stable.  

Reminds me of a good customer that I did not see for an extended period of time, then he came back to buy wood.  I asked about his absence and he told me that he found someone about 30 minutes away from me that was selling kiln dried wood a good bit cheaper than me.  I asked why he came back and he said that he bought some kiln dried sycamore from the new guy and built a dining table.  After about 30 days, the tabletop warped and one of the legs was about 2"to 3" off the floor. Wood does not move unless the moisture content changes  .  Just because you put wood in a kiln does not mean that it has been properly dried.  

[YellowHammer]

If you want to make money, no holds barred, or find out what you wood is worth, at a fair market price, turn off your sawmill, pick up the phone and call the nearest or similar place that can supply that product.  Do a true market survey.  Sounds like it is FAS and better, if not Prime, grade.  So find out what it really costs in the real world, not what you can saw and dry it for.   That is the "Replacement Cost" of the wood if you simply bought and resold it at a marked up profit.  Where does this come in?  Say you get hurt, or can't get logs, etc and this guy becomes a good customer.  You want to make money and keep him happy so you call you nearest wholesale lumber distributor and order a pack.  Then you resell it to him at a profit.  That's the true price of that wood, because, as WDH mentions, the wholesalers track the commodity prices of wood via the Hardwood Market Report, and then put their markup in that.

I set many of my prices that way, just a few minutes ago I had a unit of wide sort, Over 10" poplar and a unit of wide sort red oak, both FAS, deliver by a semi.  I needed the wood because I sold those two products out last weekend.  I have more drying but it's not ready.  Since I can't sell it I don't have it, then it makes sense for me to get it.  Since my price reflects true market price, it won't change if I buy it or make it myself, as long as it's the same quality (which is very difficult to do).

Would a corn farmer sell his crop for less than straight market price, per bushel, just because he had a good year and produced his crop for less than expected?  Nope, not if he wants to stay in business long.