Yes thats a red flag for sure.
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- Thread starter sb47
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Yes thats a red flag for sure.
He "CLAMES" his supplier retired. (that could mean anything)
I'm not whole selling anything.
I do well enough without all the headache.
I have had regulars for many years, there my bread a butter.
Since they keep coming back year after year, I must be doing something rite.
He bought a sample of each to try (at full price) and said he would get back to me.
I have already told him cash/ pick up only, when available.
I'm not whole selling anything.
I do well enough without all the headache.
I have had regulars for many years, there my bread a butter.
Since they keep coming back year after year, I must be doing something rite.
He bought a sample of each to try (at full price) and said he would get back to me.
I have already told him cash/ pick up only, when available.
USMC615
Wood's Tougher Than Woodpecker Lips...
Spot on post!!
USMC615
Wood's Tougher Than Woodpecker Lips...
Yep...Your cash only/pick up only theory is the only way I would do the deal.
Locust Cutter
Sawing for Sanity
Here's the way I see it, if you're running out every year as-is, while selling at normal price, I wouldn't sell it to him one dime cheaper. Cash-only and go from there. That way IF you did it AND he left you hanging, you still have it to sell through your normal channels and you're NOT losing money. I understand people from his perspective (I'm wanting 20 cords and you only sell 10 otherwise - gimme a deal!). BUT, if you're selling out every year (a your prices are too low) and there's no reason to lose a dime when your adding to your workload to meet the demand. Hell if Anything, I'd be knocking up the price a bit.
Heres my thoughts. The guy has been in business for 40 years. He has had several suppliers go belly up. To me that says the guy is cheap and beats his suppliers down on price so much that the suppliers cant make any money. By now, you should already know your cost. You should know how much wood you can process. You should know how much wood you can sell. You should know better than to give the guy a chance to burn you by selling to him on credit. If the guy agrees to your price, and your terms, and you can supply the needed amount of wood. Then I say go for it. If the guy tries to talk you into a lower price because of volume, Or wants a buy now and pay later deal, tell him to take a hike.
Many small regular customers are better than really large buyers in more ways than one.
Being a 'direct to the end user' supplier is the best position in the market.
Being a 'direct to the end user' supplier is the best position in the market.
Another thing about small customers is if they stiff you, its usually for only one load of wood and you wont have to worry about them coming back. A big buyer can stiff you on a very large volume of wood with promises of payment if you will just deliver one more load.
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Are you guys taking into account the time spent selling and selling and selling small amounts of wood? I or 2 big buyers require a lot less time spent on it. I'm selling some wood and the guys only wanting 1/3 cord at a time are a pain in the azz, trailer holds over a full cord and they want 1/3 of it and can't understand why it costs more than 1/3 of the trailer load. Time and fuel are the same to deliver 1/3 as it is to deliver 1 full cord. I told 3 of them to get together and buy a load then they were whining about who divides up the load. Guess what, none of them got any wood, waste of time.
Nothing is perfect and I can agree with the aggravation of dealing with more people. I think a lot just depends on how one is setup to do their business. Making small deliveries can be a hassel, and sure i would like to load up the truck, deliver it and just dump it in a pile, but f I am charging for a load of wood and I deliver one load of wood, I have done my job. On the other hand, if the customer is willing to pay extra for me to drive a few more miles, and then stack the wood under their shed, then I would be alright with that to. Money is money whether the customer is paying for wood or paying for my labor. I used to do tons of small jobs when I had my hydroseeding business. Most jobs where one tank load deals and I could charge well for them. The customer pays and I am on to the next job. I got tied up with some developers and then it was all day and multiple tankloads, which the logistics made even giving a volume discount, worth while. Problem was, the big developers always wanted discounts and where very slow about paying. I then started doing some government jobs. Competitive bidding, cut throat pricing, and on demand whenever they called. Just winning a government bid meant my hands where tied when it came to dealing with other small one tank customers. I did the math and found out that I was giving up some very good, easy money while working my butt off doing state jobs for next to nothing. I gave up the state work, I became very selective about which developers I would work with and raised my prices for the homeowner, one tank load jobs. I lost some jobs because of pricing, but i was still able to keep three hydroseeding trucks and three crews working 6 days a week. I guess what I am saying is selling in volume isnt all its cracked up to be, Sure you can stay busy, but can you make any money at it.
Over the years I have experimented with pricing and just a few dollars can make or break the deal.
I had cords for $230.00 and sold a lot of wood.
The next year I raised the price 20 dollars and at $250.00 people walked away.
Just 20 bucks in price can make or break a deal.
Firewood seems to be the one commodity that fails to keep up with inflation.
Seems like the prices have stayed the same for 20 years.
Locust Cutter
Sawing for Sanity
I started at $130 or $140/cord (I don't remember). I'm at $200 now for mixed lot hardwood, 240 for Oak and $250 for Osage Orange due to the extra weight/wear&tear on myself and the equipment. I've lost 9 customers in 16 years - 7 due to PCS'ing, 1 due to price and 1 due to a disagreement about services rendered with an attempt at chimney cleaning.
I've only advertised by word of mouth (mine and my customer's) and am not near your production but I am doing between 12-35 cords per season (w/5-7 for my own consumption). It sucks losing customers but I bet you can can find them pricing your product a bit more realistically. Then again, you may be covering your costs. If I sold everything I cut at the current prices, I do alright (NOT factoring labor or being a legit business largely because of my "owner draws"). If I went legit (which I intend to) I would have to either raise my prices about 50% or get some different equipment (which I fully intend to do whether I go legit or not). Largely I need a 16' dump trailer, a bumper pull 18' equipment hauler and a 20' double tandem GN flatdeck, a skid-steer or F.E.L. Tractor with a grapple and pallet forks, and a Super Split Special Edition. A single axle Freightliner or Int'l may also find it's way into the lineup.
I will have all of these things eventually and they are the difference between doing it for "fun" (while losing money due to time spent handling) but still covering my personal expenses giving me a bit to re-invest into equipment and being efficient.
Sorry to derail your thread. I think you have been given sound advice and already have sound logic and experience on your part. Go with your gut and don't make any decisions that leave you financially screwed if your customer tries to renig on his obligation to you. Always have a plan "B" or better yet, like the eternal Boy Scout - Be Prepared.
Good Luck and I wish you the best of luck!
I've only advertised by word of mouth (mine and my customer's) and am not near your production but I am doing between 12-35 cords per season (w/5-7 for my own consumption). It sucks losing customers but I bet you can can find them pricing your product a bit more realistically. Then again, you may be covering your costs. If I sold everything I cut at the current prices, I do alright (NOT factoring labor or being a legit business largely because of my "owner draws"). If I went legit (which I intend to) I would have to either raise my prices about 50% or get some different equipment (which I fully intend to do whether I go legit or not). Largely I need a 16' dump trailer, a bumper pull 18' equipment hauler and a 20' double tandem GN flatdeck, a skid-steer or F.E.L. Tractor with a grapple and pallet forks, and a Super Split Special Edition. A single axle Freightliner or Int'l may also find it's way into the lineup.
I will have all of these things eventually and they are the difference between doing it for "fun" (while losing money due to time spent handling) but still covering my personal expenses giving me a bit to re-invest into equipment and being efficient.
Sorry to derail your thread. I think you have been given sound advice and already have sound logic and experience on your part. Go with your gut and don't make any decisions that leave you financially screwed if your customer tries to renig on his obligation to you. Always have a plan "B" or better yet, like the eternal Boy Scout - Be Prepared.
Good Luck and I wish you the best of luck!
Being legit means giving Uncle Sam his part part and I can tell you his part will be bigger than your part. My hydroseeding company was a full corporation, I had to be in order to take on government contracts. I got tired of doing all the work and giving the government all the money. Workers comp will kill you. I hired a guy with a tractor to do $100 worth of tractor work. The guy didnt have insurance and when I got audited, I ended up adding the guy to my policy and had to carry him on it for a year. Total cost of hireing that guy was over $400 and eat up all the profit off that one job. The less you have to do with the government the better off you are. You think you can hire folks and then deduct their wage as a business expense and call them contract labor, and send them a 1099 at the end of the year, Think again. One of them quits or you fire them and they go to file for unemployment insurance and you will endup paying that out of pocket, as well as their Social Security taxes and having to buy a workers comp policy and paying for that. I learned my lesson, I have no intentions of being a legit company again. To many hoops to jump thru
Locust Cutter
Sawing for Sanity
If I do it, it will be a sole proprietorship with no employees.
