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Author Topic: Need some advice !  (Read 4197 times)

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Offline macurtis

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Need some advice !
« on: March 26, 2002, 06:05:38 PM »
 :-/ I am running into a problem with my price. So far its
.20bf. Talked to a few people and the question from them
to me ---How much do you charge? my answer .20 Well ole so and so
does it for .15 and ole so and so does it for .165. I asked
for their name, "well I cant remember off hand". I do know
of a person who charges .165 and he does a good job, but
he picks and chooses. Give me some direction on what
to say to these people.


Offline woodman

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Re: Need some advice !
« Reply #1 on: March 26, 2002, 06:28:56 PM »
   When some one asks how do you charge i tell them by the hour and the blade, The custermer payes for all my blads and WM sharpens my blads that the consomer uses. By the way if i hit metal you buy the blade every time. Then i tell them how much and the 4 hr. min.
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Offline Frank_Pender

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Re: Need some advice !
« Reply #2 on: March 26, 2002, 06:33:58 PM »
I have suggest that they get the other person to  saw their lumber.   I also tell people that this is my price to at least break even and perhaps make some money above all  of the overhead, including taxes. :'(   If they want to have me charge them by  the hour they can come and help in the process and perhaps save a few dollars.
Frank Pender

Offline Tom

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Re: Need some advice !
« Reply #3 on: March 26, 2002, 06:51:54 PM »
Mike,

I charge 20 cents a BF because that is what it takes to keep my sawmill on the road and make enough money that I can justify staying in business.  I recently went up from 15 cents, which is a pretty good jump, and I should have eased into it over time.  My old customers have told me I charged too little. Now that I went up they hesitate for a couple of seconds before saying "when can you come out?"

I know I'm not too high.  On the West coast of Fl. they are asking 30 cents and better.  North of me they are asking 25.  I figure that I am the target all the portable competition will shoot at because I've been at it longer so I'm the one to define the mark.

If I can't make it I'll come back down or quit.  If they can't compete  then I'll hear a bunch of lambasting and sour grapes.  If the customer wants to play me against them then it doesn't bother me too much because I have more independence than that.

I know I'll be fair but I'm not going to give myself away.  I am going to be the mark that the others try to reach.

The proof of your strategy is whether you are busy or not.  If a new guy comes in and undercuts your "fair" price, then he will either go away because of lack of profit or be so busy that his customers have to come to you.  That's when you do a better job than he does.

Figure out what you need and stick to your guns.
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Offline woodmills1

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Re: Need some advice !
« Reply #4 on: March 26, 2002, 06:55:41 PM »
i only charge by the hour now.  $50 if they are new or i think one time customers.  $40 if they are good repeat customers or new ones who are in wood business or i think might repeat.  for this i will do what ever the customer wants.  like quarter saw, work alone,  move the saw, sticker, make stickers etc.  this also includes normal blades, hitting metal is extra.
James Mills,Lovely wife,collect old tools,vacuuming fool,36 bdft/hr,oak paper cutter,ebonic yooper rapper nauga seller, Blue Ox? its not fast, 2 cat family, LT70,edger, 375 bd ft/hr, we like Bob,free heat,no oil 12 years,big splitter, baked stuffed lobster, still cuttin the logs dere IAM

Offline Bibbyman

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Re: Need some advice !
« Reply #5 on: March 26, 2002, 06:56:03 PM »
I had to hear the same things when I first started sawing. I’d tell them “Then that’s who you should get to saw your lumber.”  Then little truths start to come out like: “Well,  he’s been dead for 20 years.” Or,  “Well,  I took him logs two years ago and when I went back to get the lumber, they had lost the logs.”   One by one,  they’ve had me saw for them and came back for more.

BTY,  I was charging .20/bf back in 94 and went up to .25/bf a couple of years back.  I’ve been thinking of going to .30/bf.  That’s sawing at my place as we don’t do mobile but we do provide all the labor.  

One thing for sure, don’t give away your thin kerf advantage.  You can point out the value of the 20% more lumber you can make for the customer that will often be worth as much as the total saw-bill.  

If your prices are within the norm for similar portable band sawmills in the area for the same service, then don’t back down from your price.  You’ve got to make enough to pay for your machine and time.
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Offline macurtis

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Re: Need some advice !
« Reply #6 on: March 26, 2002, 07:08:43 PM »
Tom---- I think the ones doing this are the old hands and I am
the new guy. I was thinking about .20 for the first 1000 or 2000
and .165 or .175 anything after. This would, I think, be fair to
the person who has a lot to be cut and the guy with a small
amount will have to pay a little more. What do you think?

Offline Don P

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Re: Need some advice !
« Reply #7 on: March 26, 2002, 07:15:05 PM »
My story isn't about sawing but is about sticking to your guns.
I got a contract to build for a homeowner the first log home in a new development. We met with the developer and built a spec for him. He then brought in 2 other builders and started playing games...I don't dicker, my price is fair and thats all the discussion we're having.
The other two went into cahoots and bombed. In the following years I've built for the developer again, his daughter, and nephew. He allowed as to how my higher bid was the cheapest finished house in the long run..sometimes they do come around :D
A laborer works with his hands
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An artist uses his brain, his hands, and his heart

Offline Tom

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Re: Need some advice !
« Reply #8 on: March 26, 2002, 07:18:04 PM »
I think that if you start backing off then the 20 cents is too high.

Your customer, you will find, will have no problem asking for 2000 feet of 1x4's and the jobs where you cut 6x6's will be a lot further apart.

I considered making schedules for sizes and time and help and distance travelled etc.  but it all got too complicated.  I tell them what I charge regardless of the the size of the board or timber and stay busy all the time.

You can always give a discount if you feel guilty when you make out the bill (good advertising too) but its d*mned hard to ask for more money once the job is completed.

Stay with your 20 cents and make those old timers rethink their economics.  :D

You don't even have to justify it to anybody.  You have a new mill, new equipment, new this, new that, kids to put through school, a wife to feed, and your heart medicine is costing you $1000 a month.  Maybe those oldtimers live alone and drink slimfast. :)

Oh yeah, If you need something to say to them when they say  "joe blow will do it cheaper."....look them in the eye, smile and say quizically, "really?" and don't say anything else.  They will feel a need to fill dead air with something and may change the subject.
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Offline Bud Man

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Re: Need some advice !
« Reply #9 on: March 26, 2002, 08:19:45 PM »
Macurtis  Opinions are a dime a dozed so here's mine, Your new in the business and people have to have a reason to change and in a smaller community sometimes it even harder. So what to do ?, Pay some dues let em test the waters with a one time discount , let em beat you out of .05 cents a ft on the iniatial 1000 or so bd.ft (advertising),show em what you got .  You got the best machine in the business, the best cut in the business, you'll cut more and  better and faster but more than any thing show them Macurtis.  People buy from people they like and if you let them get to know you and your machine and your ways then as I  always say "The Cream Rises To The Top And The Impurities Settle To The Bottom. Give em a taste of the best and they won't be able to resist coming back for more. As time passes the demand will increase for the Cream and let the hard tails drink the dregs. "Show Em You're Stuff --They'll Line Up To Wait"
The groves were God's first temples.. " A Forest Hymn"  by.. William Cullen Bryant

Offline JoeyLowe

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Re: Need some advice !
« Reply #10 on: March 27, 2002, 07:35:54 PM »
 ;D Mike:

The Mississippi Market Bulletin (601)359-1155 published by the Mississippi Department of Agriculture and Commerce has a classified ad section titled custom sawing.  The March 15, 2002 issue has 14 ads for custom sawing with Woodmizer mills.  Here are the rates and cities listed.  I also have the sawyers names if you want them.

Choctaw Co. .40-.45/BF
Walnut Grove: .45/BF
Columbus: .40 /BF
McLain: $85/hr.
Jackson: .50/BF
Hinds Co.: .45/BF
Yazoo Co.: .25/BF
Mt. Olive: .35/BF
Starkville: .40/BF
Ellisville: .15/BF
Sandersville: .13/BF

That's pretty varied but should give you some idea.
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Offline Cedar Eater

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Re: Need some advice !
« Reply #11 on: March 27, 2002, 08:41:16 PM »
I'm looking at this from the purchaser end of the transaction. I have no reason to expect the laws of supply and demand to bend for me and neither does the sawyer. If his rates are way out of balance with the local market, he will either get too much business or not enough. He can offer me incentives and disincentives without hurting my feelings because we're negotiating and we're not family or partners.

I asked my local sawyer if he would cut me a break on his normal rate (.14/BF) if I wanted 6 X 6's since he wouldn't be making as many cuts or working as long. He said yes if I would bring the logs to him so he wouldn't have to move his mill. These "adjustments" seem perfectly fair to me. On the other hand, when I wanted my cedar paneling cut to 1/2" thickness, I knew it would be unfair to him if I held him to his price/BF. I fully expected to pay him for twice as many board feet, because he made twice as many board cuts (even though he didn't handle twice as many logs). This is because a BF price seems to be historically based on 1" boards. He had quoted me his price without realizing how much half-inch cedar we would be sawing and he was going to stick by his price, but I insisted on paying him double for the cedar.

I also took an active role in helping him get more business. I'll throw more business his way if the opportunity arises. I don't know if these things make me an unusual customer, but loyalty is a two way street.

I guess my point is that as sawyers, you are businessmen. The nature of your business relationships is as important as your rates. You start with the going rate for your market, but then you create a unique relationship with each customer. Some of your customers are also businessmen and know the value of business relationships that blur the lines between supplier and buyer. If you take a hard stance on your rates, you may limit the benefit you can derive from business savvy customers. This is just my opinion, but a good businessman counts "alliances" as valid business relationships.

Cedar Eater

Offline Bibbyman

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Re: Need some advice !
« Reply #12 on: March 28, 2002, 05:46:19 AM »
CE,  I agree with everything you said but I still reserve the right to set my price for my services.  If someone has a legitimate offer to consider,  I'll listen to it.  But I've ran into a few (just a few) hard-nosed old skinflints  >:( that make a sport of trying to beat you down on price or wanting you to do more service for the same price.  Especially when we were just getting started.  One of the common ploys is "You lower your price for me and I'll get you all kind of business."

Even if I would drop my price, they'd find something to complain about and go around telling people you were too high and wouldn't do this or that.  More than one time I've listened to them politely and extended my hand and said "Sorry we can't do business.  Maybe you can try this person or that person." and turned my back and walked off.  Rude? Maybe.  But he'll take all day to beat me down $50 on his sawing job when I could be making $4-$500 sawing.

You know, most have came back and I've sawed for them on my terms and they have been good customers.  ;)

Joey,  It would be interesting to know if the prices you found were for band or circle mills,  mobile or stationary, etc.   We have some Amish circle mills north of us that charge around .17/bf - last I checked.  I talked with a few of them and told them they need to raise their prices but there are about 20 small Amish mills in a 5-mile area and they are competing against each other (I suspect).  Plus, they have a lot of young men they need to find work for as they don't have enough farm work to support their community.  It's hard to compete in that area.  Would be better off taking up dog grooming. ::)
Wood-Mizer LT40HDE25 Super 25hp 3ph with Command Control and Accuset.
Sawing since '94

Offline Gordon

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Re: Need some advice !
« Reply #13 on: March 28, 2002, 04:59:07 PM »
The ole price is right game. That is one of the hardest things to do in business---set a fair price. Doesn't matter what business your in it's all the same. When your the new blood on the street they will test you. Even when your the old blood on the street they will test you, so get used to it. Sort of like playing poker got to know when to hold them and know when to fold them.

First some people love to bicker in price it's in the blood. So I'll tell a quick story that happened this past week to me. I bid a small job for a fair price. I've already done some work for this man and he is a good pay, but he always wants something knocked off the price. Once again the guy wanted me to knock off $25 bucks, granted it wasn't much off the bid at all. BUT the price I qouted was a fair one and I knew that. He told me that he would think about it and if I wanted the job to take off the $25 and I would have it. No thanks I replied.

Well two days went by and I recieved another phone call from that gentleman. This time he says if I knock off $15. bucks I'll have the job. I started laughing into the phone, couldn't help it. I said I'll split the difference, at $7.50 off of the job, with out a seconds silence in the phone he says when can you start. You see if I would have waited another day or two I still would have had the job. The point of this story is that some people just have to get something off reguardless of the percentage. Just the nature of people I guess.

But the best thing of all I guess is that I added an extra $50. bucks on the bid. Why do I add an extra $50 on each one of his bids? Because I made the mistake of giving him a break on price a couple of years ago and now he expects or tries for one on every job since then. It's worked out for the better for me in the long run I guess profit wise. But once you start doing something in business people expect it every time from you. So be careful, with any discounts that you offer or make it plain that it's a one time deal to get your foot in the door.

Get to know your customers I guess is the key and what they like and what they expect of you.

Let me ask a fair question from a customers point of view. Because your just starting out can you actually saw as fast and do top quality as someone who has been sawing for years? If the answer to this is yes then stay at your price, if not then knock a penny or two off. Reason being .19 is alot cheaper than .20, at least it sounds like it is. ;) Get your customer base started, your sawing speed up and then jack it back up to .20 again.

Do a good job for a fair price and you will have work coming out of your ears.
Gordon

Offline Don P

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Re: Need some advice !
« Reply #14 on: March 28, 2002, 05:11:38 PM »
 :D :D Gordon, a friend of mine calls your $50 "hassle tax", some customers just need to pay for their nonsense :D.
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Offline Bibbyman

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Re: Need some advice !
« Reply #15 on: March 28, 2002, 05:51:29 PM »
Gordon,  I had been sawing only a few months when I got a typical call from a guy; “I hear you have one of those little band-sawmills.”  I say; “Yea.”.  He asked; “Can you saw accurate lumber?” and I said, “Yes,  I thought I was doing real well.”.  

We talked a little while and it unfolded that he had taken four gooseneck trailer loads of walnut, oak, and cedar logs out to the sawmill and hardwood lumber shop in town to have it sawn.  He went out to see how the guy was doing and it was sawn so thick and thin, wide and narrow and so bowed, cupped, and crooked it couldn’t even be stacked on sticks.  And that wasn’t from board to board but in the same board.  

We talked some more and he finally asked my price and I told him .20/bf.  There was a silence on the other end.  I asked,  “Is that a problem?” He said the other guy only charged .17/bf.  

We talked some more about how accurate I could cut (kind of a job interview) and I invited him to come over and look at the lumber I was sawing and watch me saw.  He accepted and we set a time the next evening he was to come over.  

I went out to the sawshed and was sawing when a PU pulled up and a guy got out.  It was the man who I had just got off the phone with. He couldn't wait. I stopped sawing and met him outside the shed.  I invited him in to look at the cedar lumber I had stacked by the mill and measure any or all of it, if he wanted.  He said,  “I don’t need to. I can see from here you know what your are doing.  I’m bringing my logs to you. But I want to show you something.”.   He took me to his PU and showed me four walnut boards.  The thickness ranged from 5/8 to 1-1/4 (place to place and side to side), the width from 5” to 7”, crook in every direction.  You could see the blade had no control what so ever.  :o (It wasn’t sawn on a Wood-Mizer!)

I charged him .20/bf for some 3000 bf he had sawn that time and a number of time after that.  He never brought up .17/bf again.   ;)

I did ask him for and he gave me one of the boards the other sawyer sawed out.  I leaned it in the corner of my sawshed for a couple of years.  It was there if anyone wanted sawing done for a lower price,  I was going to hand him that board and tell him this guy charges .17 cents.  But I never had to use it.  Mary thought it a little dark hearted and one day threw it in the slab pile. ::)

This guy moved out of state a couple of years ago but he did spread my name through the little factory where he worked and quite a number of the people who work there have had me do a lot of sawing for them.  We’ve even sawn some special shipping materials for that factory.

8)
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Offline Frank_Pender

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Re: Need some advice !
« Reply #16 on: March 28, 2002, 06:04:06 PM »
Bibbyman, that is when it reall get good.  I just sold some special sawn 71/2" x 71/2" x 12' Douglas Fir  to Boise Cascade for a bridge repair on one of their roads in the Coast Range. ;)  Now, tht is coal selling in Newcastel. 8) Good products at a fair price gets the job.   ;D
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Offline macurtis

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Re: Need some advice !
« Reply #17 on: March 28, 2002, 06:42:25 PM »
 :)  Got skinned on price given to me by potential customer.
The sawyer he was refering to about coming to cut his logs
has not moved his mill in 2 years.Joey, about the prices
in the Market Bullitin:You have to read closely---

Chotaw Co---40-45--Selling price of pine
Walnut Grove--45--same as above
Columbus--40--same as above
McLain--85---cost of treated beam
Jackson--50--Dried pine--selling price per bf
HINDS--45--same as above
Yazoo--25--Custom sawing at owners site
Mt. Olive--35--cost of pine lumber bdft
Starkville--40--same as above
Ellisville---.15---custom sawing at owners site
Sandersville--.13---Stationary mill

I am sticking with my .20 price with some variations.




Offline JoeyLowe

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Re: Need some advice !
« Reply #18 on: March 29, 2002, 07:51:34 PM »
 ;D  The small print does make a difference Mike.  As by teens would say, "My bad!"

I've been keeping pretty busy using Tom's rule of 20-20-20.  I found out that most of the sawyers around are charging .25/BF, but as another posted, I ain't that good just yet, although I did beat scale on 15 logs that I sawed today.

I had one guy that wanted me to mill some logs at .10/BF on the promise that he would refer me to other saw jobs.  I told him to start referring and after I did a couple of jobs, I would mill his logs at .15/BF.  He agreed and so far he has sent two customers to me and I've been pretty busy behind this.  I plan to mill his logs next weekend to keep up my bargan.   8)
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