Pricing Lumber of unusual species..

[jack]

Gents & Ladies,

I'm Milling urban lumber from the Monterey Penninsula, WEST COAST, Pebble Beach and surrounding areas,  Some of my customers want the Monterey Cypress, which is a lovely wood,  difficult to get  pieces longer than 10 foot.  The wood is really hard when dried,  you can't easily put a nail through the stuff when its dry.
I have been trying to develope a price that is worthy of the my time labor and fair market value.   I pick up the logs mill them and dry then will plane them for the customers needs.  No other Big or small Lumber yard in my area carries MOnterey Cypress. So i have no Cost basis to compare.

What should i do? to be accurate but not short sheet myself,  I am a forprofit business......sometimes.

Any suggestions and ideas would be welcome.
I have charged  $1.00/bf green Monterey pine,  and customers have been fine paying that. 

Thanks
jack

[Ga_Boy]

Hi Jack,

First, welcome to the FF.

Now to your question.   How much to charge to an unusual species.

Well, first thing is to calculate how much the material costs you, then add in your processing cost then add your profit margine.

You mention Urban timber so I will assume this material is Urban Wood, so how long does it take you to get the material back to your yard?  Multiply this number by your hourly rate.

Take this amount and add in your costs to process.  Take the sum of these two and multiply by your profit margine.  Then add the product of this to the sum of the first two and you have your product price.

Doing this with round numbers looks like this:

Hours:  5
Hourly Rate: $50.00
Cost to process: $1.00
Amount of material harvested 500 BF

5 hours times $50 per hour = $250
500 BF times $1.00 = $500

$250 + $500 = $750

Profit Margine 50%      $750 times 50% = $375

Material cost = $750 + $375 = $1,125.00

Cost per board foot = $1,125 divided by 500 BF = $2.25 per board foot

Let me know if this does not make any sense.





Mark

[Furby]

What Mark said, and I would guess that with the area you are in and it being an "unusual species", probly start at $10 a board foot and see if they bite!
If they do, great!
If not, drop it a buck or two.

[wiam]

I would go higher.  Have you looked at $ of oak at home cheapo?  I almost fell over.

Will

[crtreedude]

The price is dependent on your ability to sell - wood prices are all over the map. Cocobolo for example sells BY THE POUND (like 40 dollars a lb).

One man's trash is another man's treasure. A lot of "worthless" wood goes for premium bucks as curly wood, spalted wood, and pecky wood. Just got to find someone who wants something different.

Different can mean firewood - or it can mean serious bucks.

To successfully make a business of this depends on your ability to find it, and find buyers - and have them intersect at the same time. 

[SwampDonkey]

I would follow Furbys train of thought, since it's hard to come by you have to add a 'finders fee' into your other costs.

[Ianab]

GA's figuring is good, that tells you what the wood owes you, even if it's mostly your time. Although the log may be 'free', you still have to collect it and haul it home, so it now has a value, your time, gas and miles on your truck. Each stage it goes thru will take time / materials and (hopefully) add value to the log. Sawing, drying. machining. You can work out a cost on each stage. Your costs are going to be higher per b/f than a large commercial mill, but they are never going to bother processing a single log of an unusual species either

Now if you cant sell the wood for that value, well it probably wasn't worth doing.
However you can probably get more for it, people cant go across across the road and buy it from someone else, so that should mean a premium on price.

Another thought is to look at what wood your customers would be using if they couldn't get your macrocarpa cypress. What would Fijian Kauri, Florida cypress or one of the cedars cost?. Compare it with other premium timbers, these people aren't going to be trimming their nice houses out with construction grade pine.

I agree the wood is very nice, it's common in NZ as a farm tree, and grows HUGE here. I'm fitting my kitchen out with it, solid bar and tabletop made from single slabs. Now I bet you could get good money for a board like that in your location.

Cheers

Ian

[jack]

Gents,

Thank you for the input.  I have figured the Hard costs of me picking up the dumpster and milling costs, insurance and maintenance, and paying the help.  So with those figures i used the formulation that GA_Boy put out there,  Which was very like my own formula, little different but the numbers came out the same.

I will now persue the cost of compairative wood,  See how MUCH WEIGHT THE ROAD CAN BEAR.

I will get back to the FF to inform as to how much the road can bear.
seems that if these ppl can afford a Million dollar remodle on a home, then they can probably spring some green for a Locally milled piece of fine lumber.....

take care
Jack

[Ga_Boy]

Jack,

As for a profit margine; mine is a sliding scale.

What I am trying to say is my profit margine is higher on Black Cherry than it is for Pine or Yellow Poplar.

I would do just as you are doing charge what the market will bear.

I just went up on my prices as of Jan 1.  Some people complained and did not buy, some complained and bought anyway and others did not say a word and bought what they were looking for.

This telles me my prices are in line with the market, but I knew that when I incerased my prices.  I did a survey of others around me and matched the market.





Mark

[twoodward15]

Here in NJ pricing for dried wood is about twice that of green wood, so if you were selling it for $1 abdft green, then when air dried you'de get $2 for it.  if you got it Kiln dried then add another $1 a bdft.

     I also think that as a whole we need to stop looking at the prices at home depot.  Yes, they get $5 a bdft for their lumber.  The reason sawyers have a job is because not everyone is willing to pay that price.  I buy from a sawyer to cut out the middlemen because of the price.  If everyone that owned a mill charged home depot prices I guarantee that you wouldn't sell 1/10th of what you sell now, which would effectively take everyone out of the sawmill business for lack of money.  Let's count how many "middlemen" are removed fromt he process when I buy from my sawyer as opposed to home depot. 
Home Dpeot:  1. Forester   2. logger   3. truck driver   4. mill   5. kiln   6. truck driver   7.warehouse   8. truck driver   9. store   and then I can finally go pick out the pieces I want.  Now let's do my sawyer

Sawyer Dave: 1. Sawyer Dave the Logger   2. Mill 
   So now we see that it took 9 steps to get to the point where I can buy it from HD and ony 2 steps to buy it from the mill.
   I completely agree with getting what the market will bear and pricing the product at what you need to get for it to make a living but how many woodworkers do you know buy their lumber at HD??  Do you buy HD oak?  I'm guessing you don't for the same reasons I just posted.  It really is an apples to oranges comparison.  Rant off.