Priced to sell or hold out?

[hardtop110]

I was just pondering prices and was wondering what strategy you guys use.

Do you price to shift it quickly - fast turnover, perhaps smaller margins, but larger volumes OR use higher prices on the basis that others selling cheaper run out and leave you with a higher margin, but perhaps a smaller volume?

 

And other than materials, time, insurance etc., what other factors do you include in your pricing structure?

[Dean Lofthouse]

Higher quality, higher prices and smaller turnover.

 

High volume, low prices, small profit margin = knackered equipment, knackered operator and a larger fuel bill for delivery

 

Not good business, you could earn more using the days to do tree work.

 

I just produce good quality logs, guaranteed to be dry and stick a good price on them that covers their production, storage, delivery, depreciation and wages, i sell very few early on but find its the same customers coming back for more then later when everyone has sold theirs for silly money the phone starts ringing

 

Anyone donkey can be busy, making a fair profit is where the skill comes in

[Stereo]

Amen to what Dean said. I'm not in logs but the principle is the same in just about any business. Remember at some point your equipment will need replacing, your buildings will need re-roofing or whatever. You also need to think about putting something aside (difficult these days I know). I'm guessing logs is tough on the body and you ain't gonna be able to do it forever.

[gensetsteve]

I am going with the easy jet idea this year. 15-20% priced to sell through the summer at £130 for 1.5 cu metres. If we get a cold snap in oct £140 if it gets short in dec lots more. You really find out who your regular customers are in mild winter and there is not many that don't shop around for cheap wood. Logs don't go off if stored right so you can always sell next year.

[bigdave]

for the last couple of years i have sorted my logs in to different grades

 

quality hardwood seasoned logs like ash oak beech ect are in one log store & i ask a high price for & have plenty of regular custom for them i wont lower the price as they dont eat anything so if they dont sell this year they are there for next year

 

then all the poplar & other misc types that dont last as long in the fire i stick in another shed & ask a lower price for, or if a customer says my quality hardwood is too expensive i then offer them the lower grade which they normally accept i now have a regular customer base for the lower grade

 

then conifer & other softwoods are in another store & are priced to sell

i sell most softwood in net bags to local retailers which is a growing market!

 

and if i have anything that is rotten or is bad for splitting i stick it in ton bags & fleabay it! to get rid!

 

but i am fortunate enough to have the room & time to sort them out

[openspaceman]

Amen to what Dean said. I'm not in logs but the principle is the same in just about any business.

 

Yes but you are both giving the example of small traders with limited labour, what entrepreneurial economics has shown us is that if you can manage labour "pile it high and sell it cheap" produces greater profit, albeit at greater cost

.

 

 

I'm guessing logs is tough on the body and you ain't gonna be able to do it forever.

 

Amen to that, I just about manage to chop my own few tonne, back when I was young and able I'd chop a cord on Saturday and deliver one load on the way home and the next the following day.

[farmer_ben]

What Dean said really, I am priced at the top end of the scale and am busy enough. Would be busier if I was £70 for a 1.2cm load instead of £100 but then I would rather sell 7 £100 loads instead of 10 £70 loads.

 

95% of my logs are quality seasoned Ash, Beech and Sycamore and I refuse to sell at the same price as the boys shifting poorer quality logs but doing more loads. Approx 9 out of 10 new customers go onto order again, and in 4yrs my customer base grows around 25% a year so I am happy with how I price things even if i do get ribbed a fair bit in the pub about how much dearer I am!

 

I do discounted (10% off) loads from June till Sept, helps cash flow and helps get in the door with a few more new customers.