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The next step… Producing product for large markets.

Started by Bibbyman, August 24, 2010, 08:51:30 PM

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Bibbyman

You started out like many of us here on the Forum.  You got an idea,  mulled it over a bit,  did some study and wound up buying a mill.   You probably bought it to saw for yourself and maybe make enough on the side sawing for others to help pay for the mill.  But things seldom stay the same.  Either you found out that running a sawmill wasn't for you or your involvement continued to grow.

Some of you are probably at the point where you are thinking of going full time or at least doing some commercial sawing.  I know some of you have questions because I often get messages from other Forum members on certain aspects of "going commercial".   What I mean by "going commercial" is that you want to market direct to brokers or industries that purchase a lot of lumber and other sawmill products such as beams, cants, RR ties, survey stakes, etc.

I thought it may be helpful to start a conversation on the topic of producing product for the mass market.  Mary and I,  Arky, ElectricAl and many others on the Forum have already been down this path.  All our experiences are a bit different but there are some things that are pretty general that could maybe a person at this point could benefit from.

Most commercial customers require some minimum volume.  Some specialty items can be low in quantity.  Mary and I receive requests for products we can't produce or produce in near enough volume to begin to satisfy with our low production level.  But when the volumes are small and difficult for large mills to produce, we excel.

Delivery is important.  It's been our experience that commercial orders are based on delivery of the product.  And they expect it to be on a truck or trailer in such a fashion that it can be easily fork lifted off.  This means bundles need to be banded and set on blocking on a flat bed truck or trailer.   We have shipped a lot by independent trucking outfits.  It's the best way to go if you can produce enough lumber to make up a load.  We have found it's hard to get a trucking company to deal with a small operation.  But once you get one and they find out that they can get in, get loaded and get out of your business, they're ok.

This brings me to another point;   space and hard surface sufficient to handle large and heavy trucks.  It seems like the state of Texas ain't big enough.  We have acres of graveled loglot for trucks to turn around and get loaded.  Yet twice truckers have managed to pull off the graveled area and get stuck.  One time we could pull them out, another we had to have a heavy wrecker come in and pull them out. (Loggers never have a problem – it's always been the concrete cowboys).

Material handing.  Once you expand to this stage,  you began to realize the importance of having equipment that will efficiently deal with log unloading, moving logs and lumber, and loading out trucks.  I know some of you get your logs here and there.  But once you start to saw in volume of one species, you'll likely need to buy logs from a logger.  Unless they are equipped with a knuckle-boom loader, you'll have to have something that will safely unload a log truck with tall bunks.  The small farm tractor with front in loader just won't do.  Most of our bundles weight over 5,000 lbs. and they are smaller than many of the big mills produce.

Finding a market.  Most every state has some kind of forestry organization or state forestry service that maintains a list of companies that buy forest products.  That's a good place to start.  Else, just keep your eyes and ears open.  You'll start spotting places that make wood products.  Another way is to watch for trucks loaded with lumber – maybe at a truck stop, etc.  Ask the trucker where he's taking the lumber.  Word of mouth is another way.  If you know of other sawmill that produce commercial lumber, maybe ask them.

Talking the language.  Each product, each market, has specific terms.  If you're planning to market hardwood grade lumber, you need to know what 4/4 is, for example.  Specifically in hardwood grade lumber, it would be good to attend a class on grading.  Even if you have all the hardwood grading rules down,  you still need to talk to the lumber buyer to see if there are any specific rules they expect in addition to the "standard rules".   It's a continual education.  Just a couple of weeks ago I learned what a "saddle board" was.  The broker explained that a saddle board was one that had a bark patch across the face in the middle.  This sometimes happens when you saw the back side of a log with sweep and the board turns out with a patch of bark in the "dip" area.  He said that was fine as long as there was enough board before and after to make product (in their case flooring).  The board would be degraded because of the bark area but you wouldn't have to scrap it.

Bookkeeping and order management.  Most of the places we deal with issue a P.O. (purchase order).   We have a couple that just e-mail us a note with a P.O. attached in Acrobat Reader format.  This P.O. number and information is important as the actual lumber is delivered to some receiving location and person far from the one making the purchase.  They don't know or care who you are or if you get paid.  We produce an invoice that contains the P.O. number and a list of what we delivered.  The receiving guy turns this in.  Every business has a pay cycle.  Only a couple we deal with pay on the spot.  Some take up to a month before we get paid.  If we don't receive payment in some known time, we have to get with their accounting department.  Without the P.O. number, you're screwed. Just to the right of me is a basket of invoices we're not received payment on.  When the check comes in, Mary matches the invoice to the check and knows we've been paid.  Then the invoice gets filled and check goes to the bank.  Mary uses QuickBooks.

Well,  I'm tired of typing and if you've read all this, you're tired of reading.

Comments or questions?


Wood-Mizer LT40HDE25 Super 25hp 3ph with Command Control and Accuset.
Sawing since '94

paul case

life is too short to be too serious. (some idiot)
2013 LT40SHE25 and Riehl edger,  WM 94 LT40 hd E15. Cut my sawing ''teeth'' on an EZ Boardwalk
sawing oak.hickory,ERC,walnut and almost anything else that shows up.
Don't get phylosophical with me. you will loose me for sure.
pc

Gilman

Thanks Bibby, I haven't found one of your posts not worth reading yet.

Your last paragraph is unfortunately one of the most important.  I use online quickbooks and have been really happy with it, unless your internet is down, then you're SOL.  If you are looking at accounting software I'd recommend looking into the online version of quickbooks.  The monthly cost is about $15.  My accountant and wife can both log into it and do what they need without me having to send a file to them.  It is also backed up for the same amount and the $15/month is about what it costs to upgrade to the newest offline version.  For this cost I figure one less thing for me to worry about is worth the monthly fee.

If anyone disagrees, please let me know, I'm always open to new information.
WM LT70, WM 40 Super, WM  '89 40HD
Cat throwing champion 1996, 1997, 1999. (retired)

weisyboy

i cut a lot of feedstock, 4x1 for flooring mainly, also a fair bit of 2 1/2 x 1 1/4.

most companys want it cut oversize. normaly be about 1/8" oversize.

they have to be packed and strapped into a certain size Pack to fit in kilns/ treatment vats/ containers of a size there equipment can unload.

they all have there own grading rules. some will only take first grade timber and reject packs with more than a certain % of band stock. and not pay for the whole pack, others will reject just the bad boards, and some will take the bad boards at a lower cost.

i use private transport, normally a 15 ton crane truck.

i dont transport logs i take my mill to the property, i will cut logs and stockpile them on site then take my equipment out and mill them.

a big issue with large scale milling is waste. we produce so muth flitching and sawdust that most of it i have to burn or berry.

i use software called SLIQ Invoicing Plus. works great, have tried most and this is by far the best.

god bless america god save the queen god defend new zealand and thank christ for Australia
www.weisssawmilling.com.au
http://www.youtube.com/user/weisyboy?feature=mhee
http://www.facebook.com/profile.php?id=100000696669814&sk=photos

Ron Wenrich

The only thing you missed was a log source.  I've been involved in many start-up operations, and the only ones that have been successful involved having a readily available and reliable log resource.  That means you'll either have to be able to do the logging, or have someone that will sell you logs on an ongoing basis.  Without the resource, the rest is a moot point.

This may involve getting several loggers in on the act and going out and actually buying those logs.  I know of one specialty mill in the area that gets top dollar for their product.  They also pay well above the average for the logs they need.  Buying lower grade logs is tougher since there are a lot of other outlets.  Free logs are not a resource.

How much can you pay?  Log costs = lumber price - mfg costs - profit.  Your markets will dictate your lumber price.  Your operations will dictate your mfg costs.  On a commercial basis, you have little control over the lumber prices.  You do have control over the operational costs.  Put a sharp pencil to it well in advance. 
Never under estimate the power of stupid people in large groups.

Ianab

Accounting software - there are many good options out there. More important is that you actually use it properly. Garbage in --> garbage out. And do your backups, my day job is fixing dead PCs. Sometimes I can work miracles and get your files back, other times that hard disk is just a paperweight.

As Ron points out, you need to do your sums on any production process. It's not simply turnover, it's the difference between sales and expenses. Producing $100 of product an hour seems good, unless it's costing you $95, then you may as well go fishing. Maybe buying better logs, costing $150, but producing $200 of product? Now you are making $50 an hour. Sometimes you will just do the maths and decide that this particular job is just no economic.

This is a local company I do computer work for.
http://www.valuebuilding.co.nz/#/products/4528992996

They have their own log truck and pick up their logs from the landings of several of the local loggers. The logs are sorted at the landings and may be shipped to several destinations, depends who is paying the best for the various grades. The logs these guys bring is, about the only thing that is wasted is the smell. Small stuff is made into fence posts and poles, treated and sold to local farmers. The good logs are sawn sand old / used in their various operations depending on the grade.

Slabwood from the sawmill gets sliced up and sold by the truckload, green, but it's the cheapest firewood on the local market, so they usually have a 6 week waiting list. Buy a truckload in the summer, stack it up and it's dry by winter

Even the bark and sawdust is sold. A friend works as a truck driver for another company, picks up bark / sawdust / shavings etc and delivers them to farmers and plant nurseries.  So the bark he picks up from the sawmill might end up chopped and graded and delivered to Lil's kindergarten as a crash pad under the climbing frames. The sawdust could end up out at Sharon's farm as bedding for her calves.

They also did the framing and trusses for Sharon's new house. Custom designed house, the plans were drawn up and emailed to Value Timber. They load the file into a computer controlled mitresaw. All the walls and trusses were cut and pre-built in their factory, loaded on a truck and taken to site. The builders just assemble it like a big Lego. This is from logs they have picked up from the forest landing, sawn, dried, machined, treated, cut into custom components and nailed together, for a one off custom house plan.

But for a smaller operation, work out what your niche(s) is, and be flexible. Know what each product is going to cost YOU to produce. If it's not going to turn a profit, move on.

Another thing is to look at the Whole log. A $50 log that turns out $60 of good grade lumber is not so good. But if you can recover a $25 railway sleeper or pallet cants, AND $10 of firewood for little extra work, then you have a business model that can work.

Ian
Weekend warrior, Peterson JP test pilot, Dolmar 7900 and Stihl MS310 saws and  the usual collection of power tools :)

Okrafarmer

He that dwelleth in the secret place of the most High shall abide under the shadow of the Almighty. Psalm 91:1

Operating a 2020 Woodmizer LT35 hydraulic for Upcountry Sawmill, Dacusville, SC

Now selling Logrite tools!

Writing fiction and nonfiction! Check my website.

Meadows Miller

Gday

This is a Great Topic to Tackel Bibby  ;) ;D and theres been some great imput sofar from Everyone with regards to Wholesale direct and brokered timber sales through to Ians example of Values settup which has taken them 50yrs to achieve  ;)

Ive worked on both sides of the fence From taking hardwood logs worth $300 per ton and turning it into a post and beam frame pinic pravillion worth $3000+ per ton like I am doing now and have done in the past with my parents in the log building business's It is the most direct and profitable form of Sawmilling as your are going strait to the End User with A high return its also one of the harder ways of growing in the startup phase as cashflow can be spasmodic at times but it dose not require a huge amount of startup capital  ;)

The other way which is producing a steady and consistant volume of good quality wholesale product in larger orders (this dose not allways mean it has to be huge volumes per day it might be an 8ton tray truck load a week for a costomer  ;) ) wether that be sawing grade , ties or pallet cants  and also Keeping your mill in productive section sizes for how you are set up with regards to log size target product ect  ;) Ie cutting ties/cants or larger sections instead of inch keeps production up in smaller logs  ;)

All the larger production mills advertised on the Forum like hyd Bands,Swingers and the good oll Manual circs can all make a bloody good return to the owner p.a when used to their full capacity in a fine tuned operation and very few small sawmills work at peak production on a consistant daily basis  ;)

For example I could easly prouduce a steady bft2550 or 6m3+ of pine garden ties per day on the lucas with two blokes just by keeping it in lage sizes 8x2 & 3"  sawing large cheap low grade logs 16" + sed  having a shed so weathers not an issue and a larger more reliabe loader to handel larger logs, unload trucks,and place logs into the mill quicker   ;) which is what im working towards atm  ;) ;D 8) 8)

You also need reliable outlets markets for your timber who pay within Your trading trems ;) Marketing has always been easy for me but alot of people have to work at it ;)  you have to make contacts and find out what they are willing to pay  ;) and if it seems low against what you have worked out as profitable And dont be shy to say well this is what i need to make per bft or m3 I can move asmuch as i like at usualy 10to20% more than most other mills are doing it for  ;) the demand for timber products  is always there some things may be seasonal/or spot markets and pay realy well others are consistant year round volumes do alot of  research into the market area you are aiming to supply ;)

Log Supply Everyones already said it there aint no such thing  ;) :D ;D  in a commercial mill always buget on your log imput cost costing what you would have to pay for them  ;)
That being said dont look a gift horse in the mouth my min volume to pick ups about 55ton two semi loads I currently have 4 to 5 loads of very nice Mountain ash to go pick up on monday min sed of 12" & the biggest is 48" at the butt and they are all in 41'6" lenghts Now for me to buy logs of this grade the lot would set me back around $12 to$15000 they have a 35 ton excavator there to load me so all i need is a truck to cart them home  ;)

Logistis/Transport Bibby touched on this and its the serious end of the game and goes for loaders and Transport/del of your finnished product  if you cant shift logs to the mill or deliver timber in larger lots or in a timely manner it can be very hard game at times finding good reliable trnasport operators is getting harder and will do if you suby out your transport as the average age of drivers is nearly 55 yo now and with less young ppl taking it up wil only get harder over the years ;)

Im also lucky in this department too as John my contractor has 11 semis & 22 trailers and afew subis and shuffles work to suit my schedual he also throws in a 5ton jcb telehandeler to sort and load the trucks when needed over the last few years we have worked on the barter system as he uses abit of timber he puts a $$$ figure on the transport which is $100 per hour and I give him $$$ on the timber he wants and we are both Happy  ;) ;D 8) 8)  as volumes pick up things will change a little with that which is expected  ;)

Working Capital which alot of us lack in the startup phase if your working partime and want to move into fulltime milling a good figure to aim at is $10 to $20k to cover imput and production costs for your first 30 to 60 days of operation you can either achive this buy putting all or a good part of what you make out of the mill on a partime basis into a business account (which also helps with the bank down the track)

Its been along post so Ill leave it at that for the timebeing  ;) :D ;D

Regards Chris
4TH Generation Timbergetter

Bibbyman

Quote from: Meadows Miller on August 25, 2010, 12:25:03 PM

Working Capital which alot of us lack in the startup phase if your working partime and want to move into fulltime milling a good figure to aim at is $10 to $20k to cover imput and production costs for your first 30 to 60 days of operation you can either achive this buy putting all or a good part of what you make out of the mill on a partime basis into a business account (which also helps with the bank down the track)


Regards Chris

To talk a little more on working capital... 

It's easy to feel like you're rich when you get a check for a tractor trailer load of grade lumber.  But you need to consider that you now need to replace the logs you depleted making the lumber.  And also the overhead incurred in producing the lumber.  We have a separate "sawmill" account.   When our log inventories are down, our sawmill account looks good.  When we have a yard full of logs, then our sawmill account shrinks.  I have to recognize log = money.  Someday maybe I'll have both logs and money!

Ron mentioned log source.  Page through my "Loglot management problems" thread and see what a problem it is.  There never seems to be some steady state.  It's either feast or famine.  Even if you have a yard full of logs, often you won't have something you need when you need it.  Sometimes you get stuck with logs you'll never use.

Being your own boss may not be for everyone.  People often comment, "It must be nice to set your own hours."..  "Yea." I reply, "24-7".  When you work for yourself, you'll have the discipline to get up, get out and get it done,  or,  you don't.   When you work for yourself, there is no such thing as paid vacation, holidays, sick days, weekends, etc.  I've actually worked on Christmas Day more than once.  Some have enough discipline to set business hours and keep to it.  But many tend to work as hard as they can when they have orders and the weather permits and then try to get some personal time off when the weather is bad or orders are slow.  In a small operation, every person is critical.  If one person is not there, production level is hampered.

Learning what jobs to go after or to accept is another thing that will come with experience.  It's too easy to take on way to much and not meet the commitments you've made.  Scheduling and quoting reasonable date of delivery is important.  Try to meet the commitment you made and if something comes up,  get with the customer as soon as possible and inform them of the delay.


We,  I'm tired again.  Out at 6:00am and came in at 6:00pm.  And I may go back out and put away some logs before sundown.
Wood-Mizer LT40HDE25 Super 25hp 3ph with Command Control and Accuset.
Sawing since '94

paul case

 i did go back a week or so ago and read log lot mngmtproblems from pg 1 to 30 something, and i think i understand those troubles. the deal for me right now is almost no logs so i have to go fetch in some of my own. this is partly how i am planning to build some capital to buy logs.
i also have been doin some tag teaming with a friend of mine on cutting bundles of ties and 3x4's for markets he has secured. this has worked out great for both of us. he is leaning more toward cutting parts and building shipping boxes at his mill. maybe someday i will be selling him parts for those.
my cutting for these larger markets will depend greatly on log supply and custom orders. i can make just as much $/hr cutting someone elses logs for them and i dont have to delver it.
i have never yet had to deal with po#. the pallet stock i sell is paid for before i leave there. when i was selling ties to koppers i delivered them to a local sawmill that produces ties also and the buyer told me when to be there and wrote the check before i left. having to wait on a big corperation to pay me for lumber makes me nervous to say the least. i am going to try it though, with the opportunity and some good logs to saw maybe i will discover a new revenue source for my mill.

thanks for your honesty and integrity here, this is a great forum because of the people who share here. pc
life is too short to be too serious. (some idiot)
2013 LT40SHE25 and Riehl edger,  WM 94 LT40 hd E15. Cut my sawing ''teeth'' on an EZ Boardwalk
sawing oak.hickory,ERC,walnut and almost anything else that shows up.
Don't get phylosophical with me. you will loose me for sure.
pc

Dave Shepard

If I had a supply of good quality white pine logs with a reasonable delivery time, I could make a nice living for myself, as well as pay a good price. The unstable nature of the market makes that next to impossible. I don't need junk, at any price. I need about 15-20mbf this fall for a couple of our own projects, and I am expecting a real hassle getting it delivered in a reasonable fashion.
Wood-Mizer LT40HDD51-WR Wireless, Kubota L48, Honda Rincon 650, TJ208 G-S, and a 60"LogRite!

tyb525

I tried getting about 10mbf of ewp delivered here for a timber framer, first I was quoted an extremely high price, then just blown off completely. :-\
LT10G10, Stihl 038 Magnum, many woodworking tools. Currently a farm service applicator, trying to find time to saw!

Dave Shepard

It's pretty scarce near you, isn't it? We've got a ton of ewp around here. Good walnut, on the other hand, is unusual, unless it's on someone's front lawn. :D
Wood-Mizer LT40HDD51-WR Wireless, Kubota L48, Honda Rincon 650, TJ208 G-S, and a 60"LogRite!

Okrafarmer

Quote from: Dave Shepard on August 25, 2010, 11:05:58 PM
It's pretty scarce near you, isn't it? We've got a ton of ewp around here. Good walnut, on the other hand, is unusual, unless it's on someone's front lawn. :D

Isn't that where all the walnut is? And filled with 17 nails and a lag bolt? The only other place good trees exist is on national historic places grounds!
He that dwelleth in the secret place of the most High shall abide under the shadow of the Almighty. Psalm 91:1

Operating a 2020 Woodmizer LT35 hydraulic for Upcountry Sawmill, Dacusville, SC

Now selling Logrite tools!

Writing fiction and nonfiction! Check my website.

tyb525

I've got dozens (shhh) a few nice walnuts here, this area seems to be prime Walnut country-And they come metal free!
The only EWP we have around here is a windbreak along our lane.

Now back to your regular programming, sorry Bibby!
LT10G10, Stihl 038 Magnum, many woodworking tools. Currently a farm service applicator, trying to find time to saw!

weisyboy

got a call today from a mob that makes ute trays wanting 85mm x 19mm toung and grove  in spotted gum for there floors.

about 1000 lm/month. 8)
god bless america god save the queen god defend new zealand and thank christ for Australia
www.weisssawmilling.com.au
http://www.youtube.com/user/weisyboy?feature=mhee
http://www.facebook.com/profile.php?id=100000696669814&sk=photos

woodmills1

dave

too bad you and I are 3 hrs apart
I could be your pine supplier
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

Okrafarmer

Quote from: weisyboy on August 26, 2010, 04:57:51 AM
got a call today from a mob that makes ute trays wanting 85mm x 19mm toung and grove  in spotted gum for there floors.

about 1000 lm/month. 8)

That sounds like a winner! I hope to keep it fairly low profile when I get my own mill and have some small contracts like that, no huge contracts that suddenly tyrranize my life!
He that dwelleth in the secret place of the most High shall abide under the shadow of the Almighty. Psalm 91:1

Operating a 2020 Woodmizer LT35 hydraulic for Upcountry Sawmill, Dacusville, SC

Now selling Logrite tools!

Writing fiction and nonfiction! Check my website.

weisyboy

one big tip from someone who has been there.

dotn sight a supply contract that fixes you to a set volume a month.

if sompthing goes wrong and you cant supply then you are in deep dodo.

believe my its not fun.
god bless america god save the queen god defend new zealand and thank christ for Australia
www.weisssawmilling.com.au
http://www.youtube.com/user/weisyboy?feature=mhee
http://www.facebook.com/profile.php?id=100000696669814&sk=photos

Cedarman

If you are running a sawmill business you are juggling 3 things all the time.  #1  Procurement,  you need material to saw.  Right kind of material to saw.  Need enough, but not more than you have money for.  This is where a credit line helps. Take the time to develop good relationships with your supply folks.
#2.  Processing equipment.  You must spend a good deal of thought on what you need to take raw  material into a saleable product.  This can change as your markets change.  Attending trade shows, reading this forum, reading every trade journal you can get, (most are free) will keep you abreast of new equipment, markets, etc. You must know what your equipment is capable of, what repair items that you need on hand and where to get parts and how long it will take.  It is a good idea to have plan B,C,D,E,F ready to jump on if a piece of equipment breaks down so that you can immediately keep people busy doing productive work.  Keep in mind that what you are doing today may not be what you need to do in the future.  Building layout, equipment purchases affect how easy it will be change down the road.   For example, if you buy a small mill today and later need to upgrade, will you have the electricity and space to accomodate the new equipment.  If you want to add a planer, where will it go.  Can you add on to your building without major change?
#3 Marketing and sales.  It is extremely difficult to compete with the big boys because of their buying efficiancy, market efficiancy, and processing abilities.  Therefore niche markets are the most important area on which to concentrate.  You must be able to sell yourself as a reliable provider and do your homework to discover what you customers need that they are not getting now.  Either product or service.
It is a balancing act to keep raw material supply, production ability, and sales in balance.  Material supply and sales are the ones that fluctuate the most.  Constant attention to processing efficiancy is a way to enhance the production side with little cost.
#4 Research and Development.  Although not part of the balancing act, it should be considered at all times to help improve the first 3.  Whenever you try something and it doesn't work out, think of it as R&D.  If you are not doing R&D, you will end up behind those who are.  Education is extremely important.  Lumber grading short course is one examply. Reading, networking are very important. Learn how to market, how to sell.

My philosophy is that it is my job to get the greatest economic value from each log with the most profit possible in the most efficient manner possible.

By focusing on the goals rather than making sawdust (actually we do focus on making sawdust as it is a very profitable item) you will be more successful.

Another item to think about is how narrow or broad a range of products do you wish to produce.  There are advantages of each.  You must know your capabilities and at what point you are stretched too thin.  If would take a full chapter in a book to cover the range of thinking on this aspect of the business.
I am in the pink when sawing cedar.

ElectricAl

Be ready for some big ups and down.

Bibbyman mentioned Feast or Famine, and it truly is Feast or Famine.

We have seen them both in our 17 years of sawing.



The worst part of being self employed is the general public.
They seem to think we need to be at their beckon call 24/7/365.
Nights & Weekends, what ever strakes their fancy, here they come.

We put a stop to that with gates that lock.
2 - 4 times a month we hear skidding noises at the end of the drive.
We look out and someone is right up to the gates.

We have set hours for our business. That way we can get work done before and after the gates open and close.
Or I have time to do deliveries before or after official business hours.   


It's fine to dream big,
but once you're big expect visits from the DNR, USDA, and the EPA.
And if you have employees get ready for OSHA.


Linda and I custom saw NHLA Grade Lumber, do retail sales, and provide Kiln Services full time.

paul case

i understand feast or famine.

is it safe to assume when things tighten up the  small producer is the first to be cut off by the big companies that buy these products?  the way i see it i am best off to continue the sales of custom products for individuals and set an amount to deliver to the big co.'s each week or even month,whatever they will agree with . hopefully this steady supply,even of a small volume could make me a valueable asset to the big co's.
at least i think it would demand enough respect that they would call and let me know that things are off. it didnt work this way for me before and i got burned. delivered some product and took it home with me. i dont want to do that again.
my desire in a business agreement is to deliver a quality product that makes the buyer money. pc
life is too short to be too serious. (some idiot)
2013 LT40SHE25 and Riehl edger,  WM 94 LT40 hd E15. Cut my sawing ''teeth'' on an EZ Boardwalk
sawing oak.hickory,ERC,walnut and almost anything else that shows up.
Don't get phylosophical with me. you will loose me for sure.
pc

Bibbyman

Quote from: paul case on August 27, 2010, 11:31:13 PM
i understand feast or famine.

is it safe to assume when things tighten up the  small producer is the first to be cut off by the big companies that buy these products? 

Not necessarily.  When things tightened up about two years ago now, the flooring mill started cutting off mills and then putting everyone else on quotas.  I know some larger mills that had been doing business with them for years that were cut off.  Why?  Because (my assumption) they were marketing to competitors that would sometimes pay a nickel more,  or they would pre-sort their lumber and send their better grade somewhere else, or their quality was not as good as they would like.  We were kept and we where even allowed to go over quota a few times. 

Also, other big mills were shut down or had gone out of business.  We were getting frantic calls for product that we couldn't produce for one reason or another.  For example, we had one call for a quote on heavy 12' oak planking for oil drilling operations in Kansas.  But they wanted a trailer truck load commitment a week and we didn't have enough 12' logs on the lot to even make a first load and no reasonable expectation to get any in the dead of winter.  Besides, the volume they expected would take at least our total production output.
Wood-Mizer LT40HDE25 Super 25hp 3ph with Command Control and Accuset.
Sawing since '94

Ron Wenrich

Jumping markets has a lot to do with it.  We've gone through long spurts where we could have made a few more dollars at another outlet, but stayed with long time customers.  When they needed something in a hurry, we supplied it.  We look at it as an insurance policy.  We take care of them when they can't find lumber, they take care of us when we need lumber moved.

But, the quality of your lumber is extremely important, especially in poor markets.  We do separations of grade and put them into different markets.  We don't push the grade too hard like some mills.   I also don't chase low grade and put a glut of low grade in a 2 Com and btr load.  I usually average 40% uppers in average sawlogs, no butts. 

You don't want lumber filled with wane, and you want a consistent cut.  Too often the small producer makes boards that are wavy, or thick and thin.  I know buyers who wouldn't buy bandsawn lumber.  The consistency was just too poor from the majority of producers.  That has gotten better as the sawyers have gotten better. 

Lumber must be plump sawn.  If you think you're going to be able to skirt the thickness, you're wrong.  I have sawn my lumber plump and have not missed any markets in this recent downturn and have even picked up some.  Know your buyer.
Never under estimate the power of stupid people in large groups.

paul case

sounds like to me , the key to being successful at being a little mill in the big market is ,

make a very high quality product.
make a consistent quantity . 
and repeat.

i have always thought even big companies see the value in a stable supplier. when i was growing chickens i tried to always be ready. as soon as my chix went out  would get ready for another bunch. serveral times i would get moved ahead in the schedule because i was ready.
i think a sawyer is ahead in the market place to be able to provide services in a timely fashion, am i right? this is why sawmills try to keep a supply of logs on hand. so they can supply the markets that they have developed right?   pc
life is too short to be too serious. (some idiot)
2013 LT40SHE25 and Riehl edger,  WM 94 LT40 hd E15. Cut my sawing ''teeth'' on an EZ Boardwalk
sawing oak.hickory,ERC,walnut and almost anything else that shows up.
Don't get phylosophical with me. you will loose me for sure.
pc

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