QuestionsAnswered_1

By Brian Madden on October 05, 2014 0

So a few months ago, I had another gentlemen starting out in the wood business email me a list of questions. I think it makes a good reference. It’s not formatted to look like anything fancy, it’s just my honest response to his questions (my responses in blue). Remember, I’m just sharing how I do these things. There are plenty of ways to skin a cat out there… these have worked well for me for quite a few years.

 

5/7/14

To: Brian

Re: Firewood Production and Marketing

Brian,

Here are few questions I put together for your review and thoughts, I appreciate willingness to help me.

  1. Where do you get your wood supply from and in what form; whole logs or just about anything?

Most of the wood we get in is from tree trimming companies…. big and small. From the Davey Trees and Asplundhs to the small mom n pop one man’ers. We take in about 300 cubic yards of mix wood-waste (logs, branches, brush, woodchips, bushes, etc) per day. From that, we pick out the good stuff that can be
used as firewood. We get this material in for free. The stuff that isn’t used for firewood, we process with our tub grinders into either a double shredded mulch OR compost. We’re fortunate that we have the luxury of those mulch/compost markets too. Without those, we wouldn’t be in a position to take the tree trimmer’s material. Asking them to source-separate it and only give us the good wood isn’t an option.

 

Almost all of the wood pulled from the ‘yardwaste’ is processed with log splitters. In order to get wood for our Timberwolf firewood processor, we purchase ‘Poles’ (16-20’ x 12-20” diameter logs) from land clearing companies. The price we pay for this varies based on the season. In the summer, we pay round $900 for a 10 cord load of poles.

 

  1. What do you process your wood with; log splitter, processor, other? Do you utilize a conveyor?

Almost all of the wood pulled from the ‘yardwaste’ is processed with log splitters. In order to get wood for our Timberwolf firewood processor, we purchase ‘Poles’ (16-20’ x 12-20” diameter logs) from land clearing companies. The price we pay for this varies based on the season. In the summer, we pay round $900 for a 10 cord load of poles.

 

With the log splitters, we use chainsaws to the logs down to size (16”), and just “el-cheapo” splitters from like tractor supply to split the wood up. I’ve never had a customer ask me what type of splitter I use… I certainly don’t think they’d be willing to pay more for something fancier! We treat these splitters like ‘throw-aways’… when they break, that’s what we do!

 

Firewood processor: we use like a 1943 Timberwolf… ok, maybe it’s not that old, but it sure ain’t new! They say it’ll do 3 cord/hour – but that’s some shitty wood you’re making. Since we get over $700/cord for our wood, IT HAS TO BE PERFECT! We have a short conveyor that puts our wood into a dump truck once it’s split. From there, we dump it into the inventory pile and push it up with a large front end loader. We yanked the 5HP motor off the conveyor that used to power it since it always seemed broke. We then plumbed it to the hydraulics of the processor…. much more reliable!

 

  1. Do you kiln dry your wood or air-dry or both?

Right now we only make our air-dried wood. We buy the kiln-dried wood from someone else. We’ve been kicking around investing in a kiln, but I’m not certain we’ve tempted the taste buds of our audience enough yet to drop the $50k for one.

 

  1. How does your production process work – from raw logs to the end result of split firewood ready for delivery? The various steps in between without touching the wood 10 times over?

With the log splitters, we use chainsaws to the logs down to size (16”), and just “el-cheapo” splitters from like tractor supply to split the wood up. I’ve never had a customer ask me what type of splitter I use… I certainly don’t think they’d be willing to pay more for something fancier! We treat these splitters like ‘throw-aways’… when they break, that’s what we do!

Firewood processor: we use like a 1943 Timberwolf… ok, maybe it’s not that old, but it sure ain’t new! They say it’ll do 3 cord/hour – but that’s some shitty wood you’re making. Since we get over $700/cord for our wood, IT HAS TO BE PERFECT! We have a short conveyor that puts our wood into a dump truck once it’s split. From there, we dump it into the inventory pile and push it up with a large front end loader. We yanked the 5HP motor off the conveyor that used to power it since it always seemed broke. We then plumbed it to the hydraulics of the processor…. much more reliable!

The final step in our process is screening/loading. As the wood seasons in the bulk pile, we tend to get a fair amount of ‘dirt’ from the bark and small pieces decomposing. Normally, we’ll run the pile through one of our trommels with small (1”) screen-mesh in it. This will pull all of the small particles out. We normally do this like once a week for the anticipated volume we’ll sell that week… that way it’s not sitting to long again. Once the order is take, a member of our staff uses a front end load to loose load the trucks.

 

  1. How do you charge for delivery; distance from your shop or other?

We charge $2.50/ mile from our zip code to the customers zip code. I use this site to help automate the process: http://www.freemaptools.com/find-zip-codes-inside-radius.htm
Once I get the list, I export it into excel and then add a column with $2.50 and multiply it by the distance around me.

On a side note, we used to charge a standard 3.9% fuel surcharge. This seemed to upset more people than was worth. So, to offset it, we just raised our delivery fee. When you’re closing a sale, it’s tough to say: “OK Mr. Smith, the cost for your wood is $177, the stacking is $75, the delivery is $42, our fuel surcharge is $9.22 and your tax is X.xx…. How would you like to pay for that Sir?” !!!!! See what I mean? It’s like you’re just hammering him with charges. I like to just total it all up myself and offer him just ONE TOTAL price…. that seems much more manageable!

 

  1. Type of customer that will most likely want you to stack wood at time of delivery?

THE CUSTOMER THAT YOU OFFER STACKING AS AN OPTION FOR…. IF THEY DON’T KNOW YOU OFFER, THEY WON’T CONSIDER BUYING IT!!!!

 

  1. Do customers pick up wood at your facility – in a way doesn’t this hurt your profit margin?

We do have pick-ups… but this equates to like 3% of our total sales. We’ve priced it so that we’re averaging $780/cord for all wood picked-up. I wouldn’t call that hurting our profit margins.

 

  1. How many structures to you operate from? Typical overall size and configuration for usage?

Not sure what this means. We have 6 facilities. We only sell wood from 2. I like to keep a short leash on all our production… it seems to be the only way I can keep costs down.

 

  1. Do you delivery and dump bulk loads?

That’s pretty mulch all we do. Only about 10% of our customers have us stack their wood. We don’t offer ANY packaged loads.

 

10. Do you store your split wood outdoors or in a warehouse while waiting to deliver?

All our air-dried wood is currently stored outside. We’re considering a large Coverall-type building that could house about 150 cords just to keep it out of the rain/snow.

We try to match our kiln-dried pick-ups as closely to our demand as possible. When we bring the wood in (in 15 cord walking-floor trailer loads), we do a really good job of tarping it.

 

11. Would you mind sharing photos of your facilities and equipment?

I wouldn’t mind at all! We need to help one another. Although I’ve been in the wood biz for over 20 years, I’m ALWAYS looking for feedback. I’m here to be helped as much as I want to help you! Pictures to follow.

 

12. What equipment would benefit me most for efficiency and production levels?

I guess it all depends. Are you going to sell 25 cord a season or 525 cord per season? By myself, I could earn one heck of a living from a Stihl O38 saw, a 22 ton – 2-way splitter and a nice used dump truck at $700 + / cord!!!

We’ve invested in our equipment when the demand was there. I think too many owners get the ‘chest-pounding’ syndrome of buying the latest and greatest equipment before they’ve built a PROFITABLE customer base. Just owning the coolest Dyna processor and baddest Ford F550 dump DOES NOT SELL YOUR WOOD for $700 + / cord…. That is where GREAT marketing comes in!

To prove this, last year I started marketing wood in a city over 250 miles away from me. I used several different marketing strategies like Google PPC, a niche specific website, Direct Mail and voice broadcasts. Please bear in mind that I didn’t know a single thing about their market, the competition or even what the average price was in that area. I just wanted to prove that GREAT marketing really works. After 22 days, I started taking order online! Here’s the cool thing – my average price per cord in this area was double what the average price. So what’d I do… I contacted one of the local wood guys and merely shot him the orders via email. I took them online (including credit card payments), emailed them over and DOUBLED my money without even having to take a single phone call! Ta boot, I didn’t invest in a single chainsaw, log splitter or dump truck! What DID I invest in? …..FIREWOOD MARKETING!!!!!

 

Here’s my 2-cents: INVEST IN YOUR MARKETING! In this industry, you don’t have to do too much to stand-out… that’s because no one else is really doing anything. Invest in your marketing first… even if you don’t have a stick of wood to sell! Once you get the order, don’t worry, you’ll find the wood… if you can’t email me, I’ll help! Don’t spend tens of thousands of dollars on new equipment without know who you’re going to sell your wood to for what price. This isn’t like the field of dreams… “build it and they will come”. Just owning the machine and building the pile doesn’t make deposits into your checking account! Know what puts $$ in your account…yep, you’re getting it… GREAT MARKETING!!

My present equipment for firewood production consist of: Timberwolf TW-6 splitter with hydraulic log lift, wedge lift and table grate, 40’ conveyor, F350 4×4 DW 8’ x 12’ dumping stake bed truck, Case 90XT 85HP skid-steer, pallet forks, log forks with grapple clamp, (3) chain saws and 25’ gooseneck trailer.

Any and all suggestions or information will be appreciated – lastly can grow this to make a full-time living from? To be honest, I could get by on an annual salary of approximately $26K gross if need be.

Listen, I could start over today and make $26k in the next 6 months selling firewood… even if those 6 months were April-September! The possibilities in this industry are endless. Heck I made more than $26k farting around selling wood in markets I’ve never even been to online… how could you NOT do it in your own backyard?!! YOU CAN DO THIS! But here’s the thing, it’s not just about splitting big pieces of wood into smaller pieces of you. Like the quote goes, you need to “Plan your work, then work your plan”. The $26k question to you is… what’s your plan?

I know I keep preaching this, but DON’T GET CAUGHT-UP ON WHAT EQUIPMENT YOU THINK YOU NEED TO MAKE MOUNTAINS OF WOOD! Listen, I know I can do this because I’ve been there. In 20 years, I’ve probably invested over $250k to learn how to get the kind of money I do for my wood. In my eyes, that’s like a $250k education that, fortunately, has paid off.

Brian, please be brutally honest and tell me like it is! Like I said, I’ve been in the electrical business for 30+ years so this is a BIG change that I really want to make happen.