investment against return scale for wood processing

[gdh]

If you had a shop and sold something that cost you £10 for £14 you would be bankrupt

 

I think you'll find a lot of shops work on less than that. Either way if all your costs are paid for and include labour your 'profit margin ' only needs to be tiny.

[Richard 1234]

I think you'll find a lot of shops work on less than that. Either way if all your costs are paid for and include labour your 'profit margin ' only needs to be tiny.

 

 

Depends if your talking Tesco or independent Iocal shop I suppose

It's about volume of sales though isn't it. If you are selling 25 a week of something for example you need more margin than selling 5000. There is no one fits all

Edited December 1, 2016 by Richard 1234

[R5log]

Work on about 1 third is the cost of the wood roughly!

[MonsterMonster]

Well considering most retail industry trade to retail price is 30/40% profit margin. buying in kiln dried at £70 trade to £120 retail is pretty good at 75%.

I also have a timber business and most of the products trade to retail is 35/40%.

Kiln dried around here, Lincs, sells at £75 per cube TO the public. In fact last year I bought in 30 cubes at £48 discounted from £55. I well understand margins but the problem is that year on year per cube price keeps going up to the point I think the trade will price itself out of the market. But I keep hearing that there's no money in it.

 

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[Logsnstuff]

Kiln dried around here, Lincs, sells at £75 per cube TO the public. In fact last year I bought in 30 cubes at £48 discounted from £55. I well understand margins but the problem is that year on year per cube price keeps going up to the point I think the trade will price itself out of the market. But I keep hearing that there's no money in it.

 

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fuelwood express went bust selling at £70 a cube the guy who bought their machinery at auction is now selling at £70 a cube I mostly break even selling at £120 a cube and people selling at £50 are fiddling imo.

I believe the normal is 20% return but if you want to make money get into timber management where the likes of Scottish woodlands allegedly priced a job where they wanted all the timber harvested + £15,000 to cut 200 tons, decent sized spruce with logs roughly 28" across the butt

Edited December 2, 2016 by Logsnstuff

[MonsterMonster]

fuelwood express went bust selling at £70 a cube the guy who bought their machinery at auction is now selling at £70 a cube I mostly break even selling at £120 a cube and people selling at £50 are fiddling imo.

I believe the normal is 20% return but if you want to make money get into timber management where the likes of Scottish woodlands allegedly priced a job where they wanted all the timber harvested + £15,000 to cut 200 tons, decent sized spruce with logs roughly 28" across the butt

There's the answer. I remember six or seven years back firewood producers breaking even at £35+ mark. The only firewood producers is see surviving in the next few years are the Estates selling firewood from their own woodland and the smaller suppliers getting cheap/free wood (arb arisings etc.) of which many are popping up selling from their drives. The much larger companies maybe like Certainly Wood might be around too.

 

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[County 764]

fuelwood express went bust selling at £70 a cube the guy who bought their machinery at auction is now selling at £70 a cube I mostly break even selling at £120 a cube and people selling at £50 are fiddling imo.

I believe the normal is 20% return but if you want to make money get into timber management where the likes of Scottish woodlands allegedly priced a job where they wanted all the timber harvested + £15,000 to cut 200 tons, decent sized spruce with logs roughly 28" across the butt

 

His local deliveries look cheap but bags look under a cube. An Estate close to us is selling 3 cube of hardwood at £190 delivered, cant see them lasting long

 

https://www.kinnairdestate.com/firewood

Edited December 2, 2016 by County 764

[MonsterMonster]

His local deliveries look cheap but bags look under a cube. An Estate close to us is selling 3 cube of hardwood at £190 delivered, cant see them lasting long

 

https://www.kinnairdestate.com/firewood

If the wood is from their own estate then their overheads on raw materials is lower so they can sell at £65/cube. If they are using their own staff on an established payroll then it's even cheaper. Two large Estates here do just that with 1,000's of acres of woodland using existing farm hands who swap between agriculture work and firewood/forestry work. They are charging exactly £65/cube delivered as well.

 

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[ash_smith123]

The problem is half the time they aren't cubic metres either. There was a lad not far from me selling unseasoned cubic metres for £40. I bought 3 off him for £35 a cube and I put the whole pile in 1.5 Ibc crates. I told him they are definitely not cubic metres but to this day he still sells them as cubic metres. Puts pictures up of "3 cubic metres going out" and the transit back is 1/2 full.

[gdh]

The problem is half the time they aren't cubic metres either. There was a lad not far from me selling unseasoned cubic metres for £40. I bought 3 off him for £35 a cube and I put the whole pile in 1.5 Ibc crates. I told him they are definitely not cubic metres but to this day he still sells them as cubic metres. Puts pictures up of "3 cubic metres going out" and the transit back is 1/2 full.

 

I don't think it helps when people have their wood in a 90x90x90 bag and assume it's close enough to a cube whereas it's actually. 73cube (unless it's a stretched, really heaped bag).