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Retailing Lumber

Started by car, May 15, 2006, 08:01:43 AM

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car

Hello Everyone,
I was wondering if any of you in the forum have had much success retailing any of the lumber that you saw on your mill's. This is something that I really have to consider when I buy a mill.I have been following the site of an individual that I believe is having success. His site is www.quartersaw.com
I do not see anything mentioned in his site about his lumber being graded. If you do need to have your lumber graded how big of an issue is it to have it done.


                                                             Thanks,
                                                             Charlie

The wise old owl spoke hardly a word .The less he spoke the more he heard. The more he heard the more he learned. Why can't we be more like that wise old bird?                                               

IL Bull

Welcome to the forum.  Most of my sales come from word of mouth.  My inventory keeps getting larger. ::) :D
Case Skid Steer,  Ford Backhoe,  Allis WD45 and Burg Manual Sawmill

kderby


Grading lumber is learning the language of the trade.  Like the Eskimos with 27 words for snow, we have a dozen words to describe a knot hole.  You can utter many noises that sound like words or speak with a profound accent.  If you do not know the language of the culture you will not thrive.

On this subject, I have a friend who is a sawmill manager where the volume is in the millions of board feet.  He has given me two tid bits to ponder.

First, he says he does not know a successfull mill owner who has not gone broke twice.

Second he suggests that the mill support it self from the sales of the low grade out put and then the better material is the cream.  He has seen many mills go under with a large volume of material in the yard that they thought was worth something.  They could not get it sold.  He advised against the ever so easy pattern of feeling like all that lumber is money in the bank.  It is lumber.  It is worth what someone is willing to pay.  It is not money in the bank.

I say this because I still do not apologize for the stack yard I am sitting on.  All that wonderful lumber I worked so hard to create, it has to be "valuable"????  I have bet money that I will be in this business for a long time.  I need to get past that fatal vision.

I wish us all the best!

Bibbyman

We retail quite a bit of ungraded lumber.  Most of it is farm lumber in the form of trailer decking, fencing lumber, barn construction lumber, etc.

We do sale some kiln dried hardwood lumber that is ungraded.  Our customers are mostly hobbies that would know one grade from another anyway.
Wood-Mizer LT40HDE25 Super 25hp 3ph with Command Control and Accuset.
Sawing since '94

twoodward15

You've got a few things going for you up there.  If you put out a sign that says you have a sawmill and put an add in the yellow pages and your local penny saver you might get enough business to keep you going.  Look at all the farmers around you.  Maybe make an advertisement on your computer in black and white and print it out.  Keep a stack in your truck and when you see a farmer, just hand it to him.  Don't stop and chat unless he has questions, let him know you have a mill and can saw lumber he needs or logs he has.  Number two.  Put a sign out front that says "Cars sawmill" or something like that.  You'll get the woodworkers in the local area coing in and buying small amounts of lumber.  We'll call it "fish fry" money!!!  These people will in turn tell more people and more people and you'll have a some steady customers that will spend a hundred bucks at a time throughout the year.  Your yellow page ad will get people calling looking for your services and looking for lumber as well.  You will also get the carpenter/finish carpenter/proffesional woodworker that needs a supplier.  Luckily most of the amish mills only cut soft wood and you'll be able to market your hardwoods to the people they aren't helping.  How far are you willing to travel to saw lumber?  How will your pricing be compared to the locals in the trade.  Are you doing this full or part time?  Will you mill primarily on weekends, which might be good up there as people tend to want to "help out" and see what you are doing.  It's entertainment for them.  Good luck and please post your info when you get up and running.
108 ARW   NKAWTG...N      Jersey Thunder

Part_Timer

My short answer is yes; enough to keep the bills for the mill and insurance paid PLUS money for a few extras from time to time.

tom
Peterson 8" ATS.
The only place success comes before work is in the dictionary.

mike_van

Charlie, as far as I know, hardwoods [flooring, cabnet, etc] get graded for looks, softwood [framing lumber] gets graded for strength. Many building inspectors won't allow ungraded framing lumber in a house unless an engeneer or architect signs off on it.  Ways around it, of course. I kind of cater to the small guys, the guy with 2 or 3 logs a big mill wouldn't take anyway. I just picked up a customer makes red cedar furniture, pergolas, etc. Word of mouth, he dropped of 40 or so logs last week, picks them up tomorrow as boards.  You do good work, for a fair price, people will find you.  On the other hand, bad news travels twice as fast -  Around the mill smelled pretty good after all that cedar, lot better than the cow crap used to !  :D
I was the smartest 16 year old I ever knew.

Kelvin

You got some really good answers so far, but your background will tell you a lot about how well you might do with buying a mill.  (which is the big question, as grading is not that big a deal with small mills)  I think people with connections with woodworking businesses do the best.  Farmers who can saw for other farmers, or people who used to saw for big companies, or people who are used to just plain working hard all day long.  If you jobs up to now have any connection to woodworkers your plan will have that extra push it will need. 

I was a hobbiest woodworker who had no connections and also was not used to working hard.  I've had a hard time of making money selling lumber locally.  Here in michigan hardwood is everywhere and woodmizer told me there were "100" sawmills in a 100 mile radius of me.  Just of their brand!  Granted a lot of them were not for hire, but it gives a picture.  There is a lot of low priced lumber out there and to make it in the business you have to give everyone a reason to switch to you.  You need to know the trade, and what people who you want to sell to really want.  Can you gurantee them that you will kiln dry it without leaving honeycombing?  case hardening?  If you do, will you replace it for free?  Will you have a supply all the time?  Sometimes big companies make extra money on lumber b/c its always there and dependable.  People want things now.

For instance i called every cabinet maker in my phone book who had an ad.  I asked eveyone if they would consider buying lumber from me.  They all said they weren't interested in changing their sources.  They get 1,000 bd ft bunks del free anytime at $1500 per 1000 for sel and bet red oak, all to their demensions and bone dry.  Can i beat that service?  No way!  If i beat the price, would i be there anytime of day when they called?  Do i always have a semi going to their part of the state every thurs?
I haven't sold a single board to a cabinet/ furniture maker who was pro and i haven't sold much lumber to individuals.  When i advertise they come out, look at it and say.  "I can get that cheaper somewhere else."  After i spend 1 hour taking stacks apart to show them all the way to the bottom.

Portable sawmills are niche market machines.  You can't really compete on volume.  They are designed to be mobile and the money is in sawing for other people at $50 or so an hour.  If you get a big production machine you can saw economically for volume, but you better be familar with the industry before hand.  I"ve got a simple Woodmizer LT-40 hydraulic.  Cost me $25k.  The woodshop, kiln, support equipment were about another $75k to actually make a living sawing.  $100k investment is a big thing.  It can be done with less, but i'm just saying for $100k i'm a very low volume producer.  You need to be a good salesman to find the markets for all your products, from firewood to pallets to sel and better lumber.

People see logs and know that lumber costs money, but you can see that any material costs money right down to the dirt in your yard.  You have to ask yourself do you like woodworking?  If so, sawmilling is not woodworking, its just board making.  Sawmilling is salesmanship and networking.  Like any small business you need to be able to dedicate yourself to it inspite of the romance that will wear off.  Its fun to run for awhile, but so is a woodchipper.  Cutting logs is 10% of my time.  Stacking lumber, moving lumber, processing lumber, drying, restacking, sorting, selling, networking, haggeling, finding supplies, maintence, shopping, small businesss crap, insurance crap all are 90% of my days that are now 7 days a week, but they are my 7 days. 

I used to feel like i was a prisoner when i went to work at a job for someone else 5 days a week.  I'd hate mondays and look forward to fridays with everyone else,  now i don't care about days and can't wait for the next adventure.  For me its a treasure hunt to be a sawmiller.  I never know what i might find.  I feel like a prospector.  I learned everything from scratch, and its a real miracle i've survived 5 years so far and that things look pretty good.  Most guys i know who make a living with a sawmill live in a trailer home for starters.  You better have low overhead if you are thinking of starting a business.

Hope you understand i'm not trying to be negative, but just giving someone who might be like i was, quite awhile ago, some heads up.  Small businesses are more like each other than sawmilling is like woodworking in my mind.  If you've been successful, or involved in running a small businesss you will be well off.

The most money i've ever made with my sawmill was in making my own house.  I"ve made more equity for ourselves then i've ever done with anything else.  I paid for my capital invesments, but luckily my wife has a good job to make those monthly bills so i can hold onto the lumber i have until i get the value that its worth.

Good luck!
KP


Frickman

I sell lumber both wholesale and retail. Retail is alot more work, but it's alot more interesting too. If you get yourself known as the "go to guy" for specialty orders you'll stay plenty busy. What I like about retail sales over wholesale is I can drive down the road and point out various buildings that were built from my lumber, or homes that contain furniture built from my lumber. I can't do that with the wholsale truckloads I have sold over the years.

Retail isn't as steady of work as wholesale though. You'll either be swamped with work, or wonder if you'll ever sell another board again. It can be feast or famine depending on the season.
If you're not broke down once in a while, you're not working hard enough

I'm not a hillbilly. I'm an "Appalachian American"

Retired  Conventional hand-felling logging operation with cable skidder and forwarder, Frick 01 handset sawmill

Pretend farmer when I have the time

Cedarman

Kelvin, well put.  You summed it up in fine fashion.  That's the way it was when I started out 23 years ago.  Then I was competing with a small circle mill on every corner.  Our business didn't take off until I went into a niche market with cedar.  Get as much knowledge about your business as you can, study marketing and salesmanship.  It's a great life.
I am in the pink when sawing cedar.

twoodward15

Unfortunately or fortunately for Charlie there isn't a lot of money in the area.  Most people are looking for bargains.  Most of the lumber being sold green or air dried will bring a buck a bdft up there.  You can get cherry at that price if you look hard.  I think custom sawing will bring good money.  Sooner or later you'll cut on shares and have some stock to sell.  I notice that the people that I talk to use either air dried lumber or will buy it green , dry it in their yard for the season and then take it to the kiln.  It seems like the cheaper way to go for them.  When it's all said and done they still have less than a buck a bdft (cash money, not counting time and their own labor) into the wood.
    Charlie, What are your thoughts on the area and it's market potential?  Where do you see this going, what do you think will be your big money maker?  I think you are on the right path and hope you do very well.  Keep after those farmers, they are cheap sometimes, but they'll spend!
108 ARW   NKAWTG...N      Jersey Thunder

woodmills1

I retail in small lots, from one or two boards rough or planed to making and then installing hardwood floors and stair parts from my stock.  It is both interesting and profitable, as long as you don't expect big bucks for the hours you spend stacking, moving, sorting and planing.
I got some big dollars for some spalted maple I made into v match tounge and groove.... but had the stuff for at least 6 years and moved it 5 or 6 times.

The truth is   I LOVE THIS WACKIN AWAY AT WOOD   and it is paying the bills and letting the lovely Kath and I have lotsa fun with the few extra bucks while allowing me to reinvest and get bigger.  My next vision is an Lt 70 or.... inside a building with a kiln and a 4 sided planer molder  well maybe its a dream...  but it would be the logical progression of what started as a firewood guy with a pick up and a chain saw :D
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

car

Hello everyone,
I have a lot to learn and a short time to get there. To answer a few questions. The demand market for hardwoods I believe will continue to increase. The demand around here is starting to depleat the decent supply of really good timber. We are seeing trees logged out of forrests that you would never dreamed of being cut twenty years ago. What I see left standing in the forrests today is a shame.People do not have a clue to what conservation is! Everyone and there brother is trying to buy up timber and timberland so that they can make a fast buck. They will strip the timber off the land and then try to sell the land off into residential building lots.
I believe that if I conserve my sixty seven acres I will have some pretty decent timber within a year or two that I can start to saw. And use just plain old common sense in taking care of my land. I have family in Lancaster ,Pa. that I visit regularlly. I could allways take a trailer load of hardwoods with me when I am down there. Matter of fact my sisters brother- in- law is a contractor and he could hook me up with some buyers. Long before I take one dollar a board foot for my timber I will sell it for one hundred dollars for a cord  firewood. I will become better educated and not give my timber away! Walk into a Home Depot sometime, you will pay six dollars a board foot for poplar, maple, or oak. It is probably higher in major cities.Try to find Cherry there. It is time to cut out the middle man and time to keep the profits for ourselves, the timberland owners!

                                                         Thanks,
                                                         Charlie

The wise old owl spoke hardly a word, the less he spoke the more he heard, the more he heard the more he learned. Why can't we be more like that wise old bird.

footer

All that wood in the retail stores is kiln dried and surfaced 4 sides. Very labor intensive and time consuming, even if you outsource the drying and surfacing. If you are going to dry and surface yourself plan on investing a few hundred grand in equipment, and have several full time hardworking employees. If you are going to try and sell rough cut green wood, and won't take under a dollar a bdft, you might as well go into the firewood buisseness.  Also, I believe that the lumber they sell in the home depot's for that kind of price doesn't turn real quick. Very limeted market. Like was said earlier,  every cabinet shop can buy 1000 bdft qty's of kiln dried  s3s lumber delivered to their door for less than it would cost you to produce it.
In reality, you need to find the fairly small volume nich market like cedarman has.

treecyclers

Here in AZ, it's the niche markets that keep me running.
I am the only game in town that mills Juniper, and that has Ponderosa pine 20" and wider as well as 3" thick and more.
I sell a lot of mantles, highly figured wood, and fun stuff that can't be procured anyplace else but me.
I augment my lumber sales with my furniture side, making custom rustic furniture from the lumber I mill.
I keep my costs down, have never bought a log, and harvest most of my own trees. I also get lots from tree service companies that just want the logs to go away, which I do for free.
When I sell volume, most of it goes overseas, to England, Dubai, Kuwait, Moscow, and Beijing, where they can't get what I have at any price, and I get premium pricing across the board.
Typically, I get local retail price for wholesale lots that go overseas, as they're willing to pay it as well as paying for the shipping and export costs.
Typically, I ship 1-2 MBF, not quite a container load, and they often ask me if I can get more to fully load the container, which is tough most of the time, but possible.
My operation investment is currently at about $74K, and I augment my income with a job, but my heart is truly in the milling and woodworking.
I'll reiterate what has been said regarding setting yourself up for success:
1) Have a plan, and discuss it extensively with a SCORE counselor to determine feasibility.
2) Know your target market and target client. Know what they want, and what they're willing to spend for your products.
3) Get the best information you can on costs, and estimate them fat by about 25% over what you think they'll be.
4) Find out who has the best products that you'll be consuming, like blades, chains, chainsaws, bearings, grease, and so forth. That takes a little trial and error, but it works, and you'll figure it out pretty fast.
5) Have a loving spouse that has a job for the months that sales are lean, and cash flow is wanting.
6) Network, network, network
7) Advertise in every place that you can for free, that your target markets frequent
8) Minimize your cash outlays as best you can, but don't skimp on the important stuff. Quality ALWAYS pays for itself.
9) Get educated on safe operation of all your equipment, and mind your lessons.
10) Wear a belt, earplugs, and a tight necked shirt - sawdust gets into places that you never thought it would, and when it gets into your drawers, it itches like a (&*%(&^%(^%(%(&%$$#$!
11) Keep us informed of your successes and failures. We've all been there, and may have a better solution for you to try that can save you the learning curve we went through.
We're here to help you succeed, and sharing knowledge is one of the best ways we can do that.

Superdave
I wake up in the morning, and hear the trees calling for me...come make us into lumber!

kderby

Kelvin that was great!  Thanks for your honesty and perspective.  I am about in the same boat and happy to be here.  I really like the part about running a wood chipper. :D :D :D

Why is it so easy for so many to aspire to or land in a corporate job.  Our daily grind may sometimes be a grind but...IT IS OURS!!! I love creating value (I can't say that with enough emphasis, it is like an addiction) It is my challenge to create value and income at the same time.  If it takes an extra day in the stack yard to have the drying lumber organized, stickered and covered correctly than I do that.  The resulting lumber is beautiful.  If I market it well, I win.  If I ever move on to another "career" I'll sure be proud of this one.

Again thanks Kelvin and carry on with the frog farm as well. :D ::) ::) :D

twoodward15

Charlie, I understand what you are saying, but if you took that cord of firewood andmade it into lumber you'd make a lot more than a hundred bucks and you'd spend a lot less time doing as well as a lot less time handling wood.
     Yes, home depot gets more money for their oak, that's why they don't sell a lot of it.  I broke down the handling of wood at home depot and at the sawyers in a post a while back.  Home depot something like 12 different handlers to get it to the store.  My sawyer touched it once.  All those steps add cost tot he end product.  I grew up in western new york.  I go back usually at least 3 times a year.  My father and two uncles are woodworkers as well as myself and most of their friends.  I buy lumber up there and so do they.  If you were looking at buying a mill today and I had two IDENTICAL mills parked side by side and one was $1000 more expensive than the next which one are you going to buy?  People up there don't have the money to buy 100 bdft of oak at $5 bdft.  That's why they buy from the amish for under a dollar a bdft.
    Taking lumber to Lancaster will work, if it's cherry or clear maple and you sell it at a good price.  Everything else can be had here for cheap.
     You have to remember that you aren't a retail store, you're a guy with a sawmill.  People will come to you for low prices, not "lower than Home Depot" prices.   If you want to sell firewood, bring it down here.  We're gonna break $200 a cord this winter I think!!!
     Now, if you are buying logs to saw then you have to charge what you need to make a living, but if you are getting them free (from tree services and others, not your own land) then the lower you can keep your costs the more lumber you will sell.
     Another point:  You know what you have to make on that piece of wood.  You have to stick with that because you have to eat, too, but if you think you will get even $3 a bdft  for oak and maple up there I really believe you won't be in business very long.  I don't think the market will support it.  people just don't have a lot of money up there.  I'm in a suburb of Philadelphia and don't pay that kind of money.  I can buy walnut and cherry for less than $2 a bdft here!
    I'm not trying to discourage you, I just want you to look at it from a non-sawyers point of view.  if I can buyfromthe guy next door to you for less than half what you want, then why would I buy from you.
    I will add that, yes I can buy lumber up there for $1 a bdft, chery included sometimes!!!
108 ARW   NKAWTG...N      Jersey Thunder

Cedarman

I have always looked at my business as  balancing 3 things.  Raw material acquisition, processing, and sales and marketing.  I lump marketing and sales together because they are related.  When we put in our grinding operation in Ok, I first made sure I had a huge supply of raw material and knew the price to acquire it,  second I made sure we had enough mulch sold to guarantee we would be in business at the start of the second year, during all this time we looked at equipement and studied the lay of the land to make sure we would have the right equipment to be able to operate most of the year.  We rented equipment and had a grinder demonstrate its capabilities with the buyers present and agreeing to buy so much per year once they saw the product and liked it.  Before we plunked any money down other than for R&D, we had a balance between trees available, equipment to transport and grind mulch and a way to put it on the customers trucks and enough sales (signed contracts) to guarantee payments for one year.

I would spend a lot of time on researching markets. Especially niche markets that others are not filling.  Ask customers what they would like to have that they can not get now and would be willing to pay a decent amount for.  It will take effort, but it will pay off.  It may be that you can not find these markets and starting a sawmill business would not pay off. But you need to know that before investing.

Marketing and sales will be the ticket to profits.

I have never went broke, but we have eaten beans for extended periods of time.
I am in the pink when sawing cedar.

Part_Timer

Car

In my local area I can name 6 mills within 20 miles of my place and another dozen or so within 100.  Some are large operations and some are very small like mine.  The very small ones that do portable and sell also are selling most stuff for $1 bf green doesn't matter what it is.  Some times if I find a buyer that wants something specific I don't have I'll buy it from another mill at $1 bf and resell it for the negoated price.

I guess what I'm saying is you can only get what your market will bear.  It doesn't matter how much lumber is stacked in the yard it won't pay the bills untill you sell it.
Peterson 8" ATS.
The only place success comes before work is in the dictionary.

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