Deal or no deal?

[jrider]

I've been selling firewood for 20 years and have sold 100+ cords a year for the last 5 years. It has become a time sucker for me as I try to keep with demand and produce as much as possible. For the last 2 years, I have had a tree company dropping off loads of logs. At first he was charging $100 a load which ranged between 2-3 cords per load. After a while he would only charge for some of the loads he dropped off then he stopped charging completely. Of course, this was never an issue with me! He as approached me a couple times about forming a partnership but I haven't gone for it. It's not that I don't trust him - I do. But this is just side work for me and I keep my equipment to a minimum. Plus, I work as little or as much as I want and when I want - the joy of being your own boss when it's side work and not the income you depend on. Yesterday, he calls and tells me he wants to sell firewood on his own and wants to know if I want to buy in bulk from him - cut, split, and delivered to my moms farm where I process and store all of my logs and firewood. He wants to deliver 120 cords at $130 a cord. I currently sell at $230 a cord. He knows I am picky about lengths and sizes of splits and that it's all oak. I can load a cord by myself in 20 minutes and most deliveries are less than 20 minutes away. Part of me wants to jump at this and part of me is a little apprehensive. It would be a pay as he delivers kind of deal so I could say stop at any point if the cords start coming in light or the wood isn't the quality I expect. Anyone ever get involved in something like this? Even if not, what are your thoughts?

 

[Ryan'smilling]

$130/cord delivered sounds very appealing to me. I would at least take a few cords as a sample and see how the quality compares. If I could buy nice oak already split for that price, I'd be all over it.

I don't think you'd be giving up your freedom as a one man show, you're just buying a product from the guy and reselling it.

 

[Dogsout]

Sounds like a money maker to me with the exception of tying up about $15,000 for a year while all that oak wood seasons.

 

[mijdirtyjeep]

I would also want a couple of cords dropped off to check the quality of the splits (size and such). You know what your customers want and sometimes tree service's will haul in some nasty stuff.

 

[farmer steve]

doesn't sound to bad for oak C/S/ delivered. AS LONG as he can keep you supplied with what you need.

 

[kyle1!]

Just think of all the free time you would have if you did not have to process all that wood. If this wholesaler could keep up with a quality product you could increase your price, sell more since you run out each year and the possibility of making just as much money.

 

[lknchoppers]

I do quite a bit of what you are talking about. There are pros and cons to doing firewood sales like that. To go 100% like that is not a good idea, still have some of your own and you will have to find a few sources to supply you. If he runs into trouble supplying you at the wrong time it creates a big problem. If you want to talk in more specific detail I would be happy to share my experiences good & bad.

 

[jrider]

All good thoughts so far. He texted me today saying if I had time after work today to stop in and see what he has cut and split so far to make sure it meets my standards. The money tied up in the investment will be recovered in the fall. One summer in the sun out in the field is all I've ever done and I can't keep up with demand so the consumers have been happy.
I do plan on cutting and splitting what I can on my own but if I do pull the trigger, I won't feel the pressure to work up as much as I possibly can. Also, he is a decent sized tree guy who has been around a while with plenty of $$$$ tied up in equipment. He has no issues supplying the material.

 

[lknchoppers]

Negotiate, remember he approached you. Think about letting him hold some of your stock and let it season at his place then you won't have to buy over 100 cords all at once.

 

[Joesell]

Negotiate, remember he approached you. Think about letting him hold some of your stock and let it season at his place then you won't have to buy over 100 cords all at once.

Or buy as much as you can from him while you can. Once he starts splitting, it'll only be a matter of time before he goes from your supplier, to your competition. He has a ton of contact with potential customers. He's already at their house taking the trees down. It wouldn't take much to sell it back to them as firewood. I'm fact, I'm suprised he offered you this deal at all.

 

[jrider]

Negotiate, remember he approached you. Think about letting him hold some of your stock and let it season at his place then you won't have to buy over 100 cords all at once.

He doesn't have the space

 

[Joesell]

If you say so. What would stop him from selling green wood back to his customers? It won't happen at first, but money talks. He's basically giving away 1/2 the money he could be making.

 

[T. Mainus]

I find it hard to believe that your market is so much different than what we are around here. We are selling cords of wood, all oak, for $385 a cord. I am hard pressed to be able to buy log length cords of wood dropped of by a logging company for $100 a cord. Much less cut and split already for $130 a cord. We have one wholesaler who will deliver an 11 cord load of cut and split oak for $2475.00. That is $225 a cord delivered. Even though he is already getting paid to remove the trees already, there is still value in the wood. I would think he could sell the logs for $100 a cord and not even mess around with splitting it. Like Josell said, why sell it to you for 130 when he could sell it for the same 230 that you do and make even more money. I would be leery of the deal and having all my eggs in the one basket. I think once he realizes how much work it is the price will start going up. Do you have any other suppliers that you can buy from? Will you have to raise your prices if your getting your logs from someone that actually keeps track of what they are delivering and expects to get paid accordingly?

 

[jrider]

I find it hard to believe that your market is so much different than what we are around here. We are selling cords of wood, all oak, for $385 a cord. I am hard pressed to be able to buy log length cords of wood dropped of by a logging company for $100 a cord. Much less cut and split already for $130 a cord. We have one wholesaler who will deliver an 11 cord load of cut and split oak for $2475.00. That is $225 a cord delivered. Even though he is already getting paid to remove the trees already, there is still value in the wood. I would think he could sell the logs for $100 a cord and not even mess around with splitting it. Like Josell said, why sell it to you for 130 when he could sell it for the same 230 that you do and make even more money. I would be leery of the deal and having all my eggs in the one basket. I think once he realizes how much work it is the price will start going up. Do you have any other suppliers that you can buy from? Will you have to raise your prices if your getting your logs from someone that actually keeps track of what they are delivering and expects to get paid accordingly?

Markets are very different. You are in a cold weather climate where people rely on wood for heat. Many of my customers like to look at pretty flames in their fireplace or use 2-3 cords to help offset their heat bill when they are home. There aren't many around here who heat entirely with wood and most of those who do cut and split their own. He is using Mexicans to do the labor. He just runs the equipment. If he realizes down the road he wants to retail it himself, what did I lose? Nothing. This is just side work for me. If I can make some $$ trying this route, why wouldn't I? One day, aside from personal use, I will be done with firewood altogether. What makes you think he won't keep track of what he's delivering? I already plan on stacking an occasional delivery to make sure I'm getting what I'm paying for. Also, nobody is getting $100 a cord for logs around here and you have to keep in mind, these are yard trees which means all sizes and not always the straightest stuff.

I just got back from his place a few minutes ago. He had about 2 cords of wood that was cut and split for me to check out and it looked good. We spoke about maintaining quality and that I will be checking it out as it gets delivered. We also discussed payment and he doesn't want any money until I deliver it to my customers.

 

[jrider]

Or buy as much as you can from him while you can. Once he starts splitting, it'll only be a matter of time before he goes from your supplier, to your competition. He has a ton of contact with potential customers. He's already at their house taking the trees down. It wouldn't take much to sell it back to them as firewood. I'm fact, I'm suprised he offered you this deal at all.

And if he does become my competition, how could I possibly stop that or why should I be concerned? There are a lot of people living within a 20 minute radius and no one person is going to corner the market. He could produce 1000 cords and I would still sell out at my asking price.

 

[NSMaple1]

Markets are very different. You are in a cold weather climate where people rely on wood for heat. Many of my customers like to look at pretty flames in their fireplace or use 2-3 cords to help offset their heat bill when they are home. There aren't many around here who heat entirely with wood and most of those who do cut and split their own. He is using Mexicans to do the labor. He just runs the equipment. If he realizes down the road he wants to retail it himself, what did I lose? Nothing. This is just side work for me. If I can make some $$ trying this route, why wouldn't I? One day, aside from personal use, I will be done with firewood altogether. What makes you think he won't keep track of what he's delivering? I already plan on stacking an occasional delivery to make sure I'm getting what I'm paying for. Also, nobody is getting $100 a cord for logs around here and you have to keep in mind, these are yard trees which means all sizes and not always the straightest stuff.

I just got back from his place a few minutes ago. He had about 2 cords of wood that was cut and split for me to check out and it looked good. We spoke about maintaining quality and that I will be checking it out as it gets delivered. We also discussed payment and he doesn't want any money until I deliver it to my customers.

Sounds like it's worth a shot.

 

[lknchoppers]

Markets are very different. You are in a cold weather climate where people rely on wood for heat. Many of my customers like to look at pretty flames in their fireplace or use 2-3 cords to help offset their heat bill when they are home. There aren't many around here who heat entirely with wood and most of those who do cut and split their own. He is using Mexicans to do the labor. He just runs the equipment. If he realizes down the road he wants to retail it himself, what did I lose? Nothing. This is just side work for me. If I can make some $$ trying this route, why wouldn't I? One day, aside from personal use, I will be done with firewood altogether. What makes you think he won't keep track of what he's delivering? I already plan on stacking an occasional delivery to make sure I'm getting what I'm paying for. Also, nobody is getting $100 a cord for logs around here and you have to keep in mind, these are yard trees which means all sizes and not always the straightest stuff.

I just got back from his place a few minutes ago. He had about 2 cords of wood that was cut and split for me to check out and it looked good. We spoke about maintaining quality and that I will be checking it out as it gets delivered. We also discussed payment and he doesn't want any money until I deliver it to my customers.

If he will let you pay him as you deliver to your customers you are in a win win situation. That is a great deal !!

 

[DrewUth]

Where in NJ are you getting $230/cord for oak?

 

[jrider]

Where in NJ are you getting $230/cord for oak?

Drew Uth from Medford?

 

[DrewUth]

Indian Mills, Galloway now. Close. Do I know you?