Considering increasing our Firewood prices

[Woodworks]

19 minutes ago, Steve Bullman said:

You should be more scared of earning less profit

Easy to say but harder to do. Already at £100 a cube + £5 if only buying 1 cube

Edited August 4, 2018 by Woodworks

[Lancer]

2 years ago we increased prices by £10 a cube and we got much busier. We have recently increased by £10 again and have seen no drop off in sales. Can afford to lose a fair few customers and will still be better off. We are now £105 for air dried and £120 m3 kiln dried. 

[arboriculturist]

13 minutes ago, Woodworks said:

Easy to say but harder to do. Already at £100 a cube

If you have been left with dry Firewood at the end of March then keep your prices the same, if you run out put them up. Ours has been at 110 for more than a year.

Forget about those who undervalue the product, most likely it's not the consistent quality that you achieve.

Put your car in the garage and see what you get for £105

Together we stand, divided we fall !

[Woodworks]

2 minutes ago, arboriculturist said:

If you have been left with dry Firewood at the end of March then keep your prices the same, if you run out put them up. Ours has been at 110 for more than a year.

Forget about those who undervalue the product, most likely it's not the consistent quality that you achieve.

Put your car in the garage and see what you get for £105

Together we stand, divided we fall !

Yes we did sell out but it's the coldest winter since we started. Put our prices up and have mild one and get left with piles of wood doesn't sound good. It's not as if the public who are buying the logs have had hansom pay increases so they will feel it for sure. We may just risk but going over the £100 mark feels like a threshold. 

[arboriculturist]

10 minutes ago, Woodworks said:

Yes we did sell out but it's the coldest winter since we started. Put our prices up and have mild one and get left with piles of wood doesn't sound good. It's not as if the public who are buying the logs have had hansom pay increases so they will feel it for sure. We may just risk but going over the £100 mark feels like a threshold. 

I know what you mean - £ 100 is a handy figure. However I remember going from 85 to £ 90, which was a handier figure than £85. Perhaps it should be £ 110.

gdh has been raising his prices by £ 5 for years with little effect - after all £ 5 is only 5%.

 

There is absolutely knowone in your area that sells at the same quality as you.

Nothing ventured - nothing gained !

It's a personal choice of course.

[Woodworks]

26 minutes ago, arboriculturist said:

 

 

There is absolutely knowone in your area that sells at the same quality as you.

 

Not sure that's true. There is one seller delivering out this way. Offering cheaper logs kiln dried on RHI. Was always dreading a subsidised log seller to compete with but thought we had got away with it but sadly not. 

Edited August 4, 2018 by Woodworks

[arboriculturist]

Cost breakdown are a starting point, but they never reflect the true costs of running a business.

 

Your accounting spreadsheets are the accurate method of course.

 

Never had more than 1.75m per tonne and someone on the forum a while back said an average delivery is 1 hour.

 

If you pay staff you may only make £30 /100.

 

As we all know to make a decent living you have to forego all those holidays, fast cars, nights out to build a well oiled, super efficient operation - then and only then can you enjoy the fruits of your spoils (or something like that).

 

Prices go up on everything. For example haulage to haul IBC's has gone up 30% in 12 months.

 

Those that produce 50 or 60 metres from their Arb. arisings can afford to remain static, but they are so small they can't supply the demand.

 

More and more people are dropping out of Firewood for all the reasons we know, so there is the opportunity to capitalise on the existing market if you have the passion.

 

We have nothing here left to process, it's not out there in the South West, saying that I have been promised some loads from a couple of sources which is light at the end of the tunnel.

 

A haulier said to me  a while back - buy it when you can as it wont be there for long and I am in total agreement with that.

 

 

 

 

[richardwale]

Had a call yesterday from a customer I sold to last year for the first time. Her boiler had packed up and her usual log man was out of contact. Anyway she called yesterday to order some more hardwood and I said prices were the same as last year and I'd ring her later with a delivery date. Called approx 4 hours later and she apologised and said her husband had managed to contact their previous log man and he was delivering 2 cube of hardwood for £120. wish I knew the bloke as I'd buy everything he had at that price.

[arboriculturist]

1 minute ago, richardwale said:

Had a call yesterday from a customer I sold to last year for the first time. Her boiler had packed up and her usual log man was out of contact. Anyway she called yesterday to order some more hardwood and I said prices were the same as last year and I'd ring her later with a delivery date. Called approx 4 hours later and she apologised and said her husband had managed to contact their previous log man and he was delivering 2 cube of hardwood for £120. wish I knew the bloke as I'd buy everything he had at that price.

As long as we live there will always be someone selling for less and customers come and go.

All you can do is produce the best product you can, promote it and offer a reliable service.

We have always focused on the top end of the market like Woodworks and others, it's worked well.

Sometimes people request lower cost and they have softwood.

[gdh]

1 hour ago, Big J said:

Out of curiosity, out of the £100 (to use that figure), how does that break down? In terms of raw material cost, processing cost, delivery cost and profit?

 

I only ever played at firewood production, but found that the most irritating part of it was delivery. I offered quite large discounts if people collected. 

 

At the end of the day, to produce a full trailer load (7 cube) only took about an hour and a half on the processor, but usually at least 2 hours to deliver. 

 

The last load we had into the yard was quite dry spruce from a windblow site. It was £40 a tonne delivered in (cheap now, I know) and the breakdown was this:

 

Per cubic metre:

 

£12 - cost of spruce

£4 - wages for processing

£2 - electricity/diesel costs for processor and forklift (estimated)

£6 - wages for delivery (based on 7 cube load)

£2 - cost of fuel for van for delivery

£3 - yard costs (based on the above work taking half a day)

 

So £29 costs on a £55 sale price. On a 7 cube load you're making £182 profit per half day after all costs.

 

I appreciate that the raw material costs are quite a bit higher now.

 

I would agree that delivery is where you can loose money very easily which is why we try and do big loads and just tip it out but when you go further it still wipes out any profit.

 

I've got a list on my computer of costs per 1.8cube (our smallest load) like that and it's surprising how many hidden costs there are;

Hardwood £62

Labour including stacking etc £11

Processor £5

Loaders

Box rotator

Transport from timber stacks 

Sheds (at some point they need rebuilding) 

Chains 50p

Tractor for processor £2

Bars 20p

Insurance 

Diesel £1

Storage boxes

Advertising /website 

Pickup

Trailer

Repairs (the biggest variable and easy to loose a few thousand) 

Servicing machines 

And interest on a few massive loans...

 

I'm not going to do all my figures but it gives you an example and I probably missed a few without looking at my list.