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Author Topic: Retail Firewood Sales what works and what doesn’t  (Read 1820 times)

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Offline woodshax

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Retail Firewood Sales what works and what doesn’t
« on: April 12, 2017, 03:52:34 pm »
I am hoping to start up a series of conversations about how to maximize profits for those of us in the firewood sales game.   As we all have our own territories, sharing best practices will only serve to give us new ideas and avenues rather than making the competitor better at taking our business.  The agenda is not to shamelessly plug my invention but to start gathering info on how to cut costs during production and places and people to sell to for maximum profit......without ripping anyone off.
I have been focusing on the retail end of the business rather than the production side so, I have not invested in automated processing and bagging equipment.  As a result my firewood costs are high.  I buy from guys who sell it by the cord or have Tree Services drop off wood rather than dump it (but that is generally green wood and if I am not there to watch…a lot of garbage wood and debris).  I make it up by selling by the stick at State parks at a price that reflects the convenience of having the wood there and not having to tote it in when you could have that space available for more beer.   I can’t wrap my mind around doing all the hard work and selling to a convenience store owner only to have them double the price for having it in their store from.

So share your secrets to success and what has failed for you so we can all learn

Woodshax.

Offline armechanic

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Re: Retail Firewood Sales what works and what doesn’t
« Reply #1 on: April 18, 2017, 09:22:29 am »
I sell bundled firewood (3/4 cu.ft.) in North Ark. I think I may have talked to you before. I would like to use vending machines at some point, but will have to get a heat treat kiln first for state parks. I am only selling to a couple of stores close by right now.  So I am glad to see this post and will check in often.
1989 Lt 40, D6C CAT, Home made wood processer in progress.

Offline Mooseherder

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Re: Retail Firewood Sales what works and what doesn’t
« Reply #2 on: April 18, 2017, 12:19:49 pm »
I think there is a untapped market for these type products at Campgrounds along with bags of Charcoal.  Stores are expanding displays to carry bags of Oak, Mesquite, Hickory and these I took a picture of.  Retailing just under 4 dollars a bag makes me wish I had a Forest of it.  These items would definitely compliment your operations.  I'd estimate the percentage of our meals over charcoal are at least 25%.  Well over 50% of our Dinner is cooked outside.  I use these chunks on the perimeters to get some smoke flavor and the bags last me.  I brought 6 bags of Apple with me when we went to Maine last year and went thru 4.  I've also used these chunks in my Smoker with better results than the Chips.  Charcoal pricing hasn't gone down in the 40 years I have been buying it.  On the Charcoal side I'm disappointed with Kingsford quality and have found better products that last longer and at 60% of the cost out there.  Only thing worse is having to go hunt some down when you need it. ;)

   

 
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Offline woodshax

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Re: Retail Firewood Sales what works and what doesn’t
« Reply #3 on: April 18, 2017, 01:34:39 pm »
Absolutely,  Firewood and charcoal go hand in hand when camping and we sure do see the need in the 11 parks that we have now.   I have parks throughout Texas that want the machines but they are too far away for me to service.....I am considering leasing them to the Friends groups at these parks and doing all their back office record keeping for a percentage of the sales if they fill them....I prefer to use very local wood or heat treated (we are playing with kiln building now) but it is very difficult to find a reliable firewood dealer to take on the task in these parks.  And.....pretty soon every state will adopt the Local wood or heat treated wood policies anyway.  The National Parks are already at gather it on site or heat treated only.  I was just contacted by the friends group at Inks Lake near Austin and they have 200 camp sites and have gone through 15 cords since 1 January but it is on an honor system and they have a lot of "shrinkage".... The only thing I can figure to do is take them down a big trailer of bundled wood and Have it secured at the park maintenance site and then the friends can fill when needed and then I will only have to go down once a month or so.  At $1200 a cord in the machines there is still a profit

Offline armechanic

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Re: Retail Firewood Sales what works and what doesn’t
« Reply #4 on: April 22, 2017, 05:51:45 pm »
I am wanting to build a heat treat kiln, It looks like that is the coming thing, already is in the state parks and would like to try the vending machines.  We have a large chain of convenience stores that claim they lose to much so I might change their minds with the idea of machines and the state parks, but that is a huge investment trying to buy that many.  I also have a lot of hickory and cherry wood. I guess I just need to get out and hustle.
1989 Lt 40, D6C CAT, Home made wood processer in progress.

Offline woodshax

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Re: Retail Firewood Sales what works and what doesn’t
« Reply #5 on: April 25, 2017, 12:56:46 pm »
Don't know if you have thought about apartments with wood burning fireplaces in the winter for a machine or sales but to rent some land space from the apartment manager would have higher profit than the gas stations....those owners want to just double the price you sell to them for

Offline WV Sawmiller

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Re: Retail Firewood Sales what works and what doesn’t
« Reply #6 on: April 26, 2017, 08:45:35 pm »
I can’t wrap my mind around doing all the hard work and selling to a convenience store owner only to have them double the price for having it in their store from.
Woodshax.


   I've said this on other threads but I really can't understand the issue with someone else marking up any product to what the market will stand. As long as they pay me, the supplier, a price that I am satisfied with what is wrong with them doing their marketing, handling and taking a chance it will sell? I really see nothing wrong with this.  We buy a log for $.50/bf, process it into lumber, slabs, etc for another $.50 then sell it for $4/bf. What is different about that?

   BTW - I recently forwarded a link to your site to a friend who sits on our county parks and recreation committee. They took over several parks from the state last summer and are still trying to figure the best way to run them as a service and to best benefit the county and residents. He is looking into using your machines.

    Do you sell and support your machines as far away as southern WV?

   
Howard Green
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Offline armechanic

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Re: Retail Firewood Sales what works and what doesn’t
« Reply #7 on: April 27, 2017, 10:23:29 am »
As of right now, the stores markup is two dollars a bundle.  I don't have any thing to do with how they price  If I used machines I would just pay them for the space.  We have lakes and camp areas here where the machines would work good, but would have to be heat treated, several thousand dollars, machines to sell, several thousand dollars each.  I don't know if it would pay out or not.
1989 Lt 40, D6C CAT, Home made wood processer in progress.

Offline nativewolf

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Re: Retail Firewood Sales what works and what doesn’t
« Reply #8 on: April 27, 2017, 10:52:58 am »
I can’t wrap my mind around doing all the hard work and selling to a convenience store owner only to have them double the price for having it in their store from.
Woodshax.


   I've said this on other threads but I really can't understand the issue with someone else marking up any product to what the market will stand. As long as they pay me, the supplier, a price that I am satisfied with what is wrong with them doing their marketing, handling and taking a chance it will sell? I really see nothing wrong with this.  We buy a log for $.50/bf, process it into lumber, slabs, etc for another $.50 then sell it for $4/bf. What is different about that?

   BTW - I recently forwarded a link to your site to a friend who sits on our county parks and recreation committee. They took over several parks from the state last summer and are still trying to figure the best way to run them as a service and to best benefit the county and residents. He is looking into using your machines.

    Do you sell and support your machines as far away as southern WV?

 

Completely agree on the pricing points you make.  If you are happy selling it to someone for a price X than why do you care what they do with it? 

Offline Jeff

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Re: Retail Firewood Sales what works and what doesn’t
« Reply #9 on: April 27, 2017, 11:23:54 am »
The comment isn't in regards or contest to how much the other guy is making, its in regards to how much HE could be making by selling himself given the opportunity. I understand completely. Just because one wonders if you can make more instead of the other guy, doesn't mean you have an issue with someone else making money.
Just call me the midget doctor.
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Offline Mooseherder

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Re: Retail Firewood Sales what works and what doesn’t
« Reply #10 on: April 27, 2017, 11:40:27 am »
Retail Stores have high operating overhead.  A 50 thousand square foot Grocery store with refrigeration has a monthly electric bill around 25 thousand.  Rent or Mortgage and Employees is a whole lot more.  Plus you have to make money for keeping everything running and replacement costs.  There are pages of other expenses.  If you have theft from employees or customers you're out of business quickly.  Smaller convenience stores have the same expenses proportionally lower but it's all relative.  The Market will dictate prices as customers will either buy the products or buy the item at another location that they know has it at a cheaper rate.  Without volume, none of it works out for anybody big or small because of your fixed expenses.
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Offline woodshax

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Re: Retail Firewood Sales what works and what doesn’t
« Reply #11 on: April 28, 2017, 09:00:32 am »
Well first,  I am glad the thread is starting to generate debate and Jeff, thanks for the back up!  I have no problem with the store owner making money....I just think we should make more! and be happier!.   Generally the firewood is kept out front of the store and other than a small allotment of space, it does not cost them much in operating costs.  For the most part, unless the store is near campgrounds the firewood sales are seasonal.  I like sales all year long!  even in Texas in the summer when the low temp at night is 82 degrees....people are still burning a lot of wood for the "experience".  I would rather lease space from a store owner in the winter and give him a percentage of sales or move the machines to a big apartment complex that has apartments with wood fire places and rent space from them (if texas parks were not open all year round).  The reasons I have the machines at local parks is really just to gain the sales metrics and prove the concept to some day sell the machines to others who want to supplement their wholesale sales.  So far the Return on investment from my parks would yield (on average) a 100% return on investment within 14 months (at full retail price).  So far, this year with 11 parks (and climbing) we have $50,000 in sales and half of that is profit.   I am just afraid I will run out of trees in Texas.  But now these sales covers all my overhead and allows me to do other projects and concentrate more on manufacturing and reducing those costs.

Right now I am looking at leasing machines to parks or friends groups of parks ( percentage of sales goes to them and I manage the back office) that are too far away from me to service and then dumping large quantities of bagged wood in their off limits maintenance area and having them stock the machines...or partnering with large wholesale sellers.  So WV, I would be interested in going to West Virginia (once I can make enough machines to support it) are you interested in supplying and/or filling?

I have 6 parks in North east Texas wanting the service and now the Austin Area parks are wanting in.

Just saying.... we work hard to provide the product....how do we keep more in our pockets?

So my short comings are in the sourcing, processing and bagging.....

My 2 cu ft bags cost me about 22 cents and my bundling .75s cost about 14 cents plus labor and my transportation cost is about 50 cents a bag to get them in the parks and stocked

Do I buy the right equipment or source from the right wholesaler?

Offline Magicman

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Re: Retail Firewood Sales what works and what doesn’t
« Reply #12 on: April 28, 2017, 09:39:16 am »
This whole concept is far outside of my circle, but I believe that the logistics will work themselves out in each situation.  :P  You have a vast network of folks here on the FF that want to see this venture succeed.  I encourage you to keep on keeping on.   8)
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Offline WV Sawmiller

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Re: Retail Firewood Sales what works and what doesn’t
« Reply #13 on: April 28, 2017, 02:08:18 pm »
Woodshax,

   I am not in the firewood business nor am I interested in servicing or filling the machines. Since you are a FF sponsor and worthy of extra consideration I was just passing along your info to a friend who I felt might have a need as part of his normal duties on the committee. If the county decides to buy the machines I figure they can either contract with someone to provide the wood and fill them or they might choose to self-perform and have their maintenance people save the trees they have to cut anyway and cut and split into firewood and put in the machines themselves. If it were me I would do that then I could brag about creating jobs as well as providing a quality service to our park patrons.

   Good luck on your continued success in your venture.
Howard Green
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Offline Pclem

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Re: Retail Firewood Sales what works and what doesn’t
« Reply #14 on: April 29, 2017, 09:19:25 am »
We supply about 20,000 bundles locally here in WI a year. We have a couple large c-store chains, a couple state parks, and a private campground. We dry everything in a kiln. We have bought logs and processed, bought split wood, bought kiln dried wood, bought packaged wood, and now, are back to logging ourselves. Everything is done by Me, my wife, and the kids when we deliver in the summer. I go back and forth on the idea of hiring help, and that scares the crap out of me. I have a hunch we will stay small and family, and continue to invest in more productive equipment instead of employees. The process has a ton of hours per cord, from splitting small pieces, to packaging, to running around filling stores. Like I said, the only thing I can come up with to grow without employees is better equipment. Any ideas, I'm all ears!

Offline woodshax

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Re: Retail Firewood Sales what works and what doesn’t
« Reply #15 on: April 30, 2017, 08:52:03 am »
WV Sawmiller Thank you very much for the referral I greatly appreciate it.
Pclem,  I wish I could find an operation like yours close by me....I may have to go the "better equipment" route as well to reduce costs

Offline woodshax

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Re: Retail Firewood Sales what works and what doesn’t
« Reply #16 on: May 08, 2017, 07:46:24 am »
So,  bagging, bundling or loose...what works for you?

I bag my large offering ...2 cuft by volume mesh bags at 22 cents a piece (right at 40 to 45 lbs) and bundle the traditional .75 cu ft....about 14 cents for plastic manour

Offline woodshax

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Re: Retail Firewood Sales what works and what doesn’t
« Reply #17 on: May 18, 2017, 08:08:11 am »
So how about the the "don't move firewood"  craze that is sweeping the country to combat the spread of tree disease and invasive species.....and add to the USDA coffers?   We do not have any regulations yet in Texas, but they are coming.  We have already started sourcing firewood from 50 miles or less from each of our state parks and have started a kiln project to provide "kiln dried" to supplement and hope to move to "heat treated" with the USDA stamp.....but that is expensive to get certified....I have heard the process is upwards of $15,000 to get certified.....anyone out there already "heat treated" or trying to get there? 

Offline Pclem

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Re: Retail Firewood Sales what works and what doesn’t
« Reply #18 on: May 27, 2017, 08:00:16 am »
We heat treat everything. It costs us $50/ year for certification from the state. I don't think USDA is much more. [ I hear they just check up on ya more ]. Not sure where you heard the $15k to get certified, unless they're adding kiln expense in there [which $15k is pretty darn cheap for a kiln ]

Offline woodshax

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Re: Retail Firewood Sales what works and what doesn’t
« Reply #19 on: May 29, 2017, 09:05:25 am »
Good to know.... had not checked in to certification yet just kiln requirements and standards...We are going to build a kiln and learn from there...We have a while in Texas before it would be a requirement but want to already be there when they get serious about it.   15K must have included set up